Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I have been thinking about this and I wanted to bounce it off people. What do you think of a massive inheritance tax? I mean tax inheritance at 90%+. However, you will get rid of sales and income taxes. I see multiple benefits from that.
- It doesn’t disincentivize people from working like an income tax does
- It doesn’t disincentivize people from consuming the way a sales tax does
- In fact, it stimulates people to consume more or to give to charities, which are supposed to replace government functions
- It will also stimulate more people to work, because nobody will be able to rest on the laurels of the previous generation
- This way you also capture all of the income creation in a country, because all the money spent becomes somebody’s wealth. While stuff is manufactured in China, the profits go to US corporations, which pay it in incentives to their CEOs, managers and employees. You will let the wealth accumulate tax free.
- But these people will not experience the benefit from just hoarding the capital, because it will just be taken away
- This will also simplify the government collecting apparatus, because the tax code will be much simpler if you eliminate the income tax and all the loopholes associated with it and the sales tax, which puts the burden on businesses to collect.
So they will have to donate it, invest it or spend it. The spending part will obviously create jobs. You can also donate it, so charities will have more money to cover government functions that the government will not be able to provide. Or you can invest it. Ownership stakes in private businesses or founder stakes in public companies will be taxed less. So you have an incentive to start a business, not to invest in AAPL shares. It will incentivize people to try to create the next AAPL!!!
The tax will be universal and flat. You have $10 million to leave your family? Taxed at 95%. You have $10k to leave to your family? Taxed at 95%.
You will have to create a system that doesn’t allow you to move wealth offshore, but with 0% income tax and 0% sales tax, I think the incentives to move offshore will disappear.
What is to stop someone from setting up a trust or simply writing a check and deeding all property to children before death?
Will there be a 95% tax on all gifts and trusts too?
It would have to work like Medicaid, there would be a look back period, a long one. Any gifts or transfers would be seized from the recipient. Right, OP?
What they should do is elominate the capital gains tax so that people will give their money to their children during their lifetimes when their children need it instead of waiting till they die (in order to avoid taxes).
Why? So I have seen so far are personal attacks. Intelligent.
One of the most importantly reasons we work so hard is so that we can raise our families, build a better future for our families and leave our legacy with our families.
When you tax 95% at the inheritance, what's the point of us working and raising a family then?
This idea is nothing but communist - it would take away all the personal properties, all the incentive to accumulate any personal properties and any hope for our children.
So it's beyond retardation. Why should people be allowed to propose ideas that are beyond retardation?
National Sales Tax is too regressive. All the poor people will bear the burden, since they spend most of their income.
Not really. A national retail sales tax (NRST) would replace the taxes that are already embedded in the price of items you buy now. Most prices would remain essentially unchanged. So the poor would pay no penalty for moving to a NRST.
Further, under the Fair Tax only new items are taxed. The poor often tend to purchase used items and therefore would NOT pay into the fed tax system if they continue to do that.
the problem is that you are taxing wealth not income, and when you tax wealth you destroy what previous generations have worked for, and it then becomes an issue of why would someone want to innovate if in the end they are just giving everything to the government.
and in reality, it would kill business that are passed down to the next generation because the government would be taking large sums of the businesses worth. even if you tax them at half the rate you suggest for the rest of inheritances, you are still going to have to end up selling the business to pay the damned taxes, and that is a problem. taxing wealth is not the answer as the truly wealthy will still find a way to protect their wealth from the government, so in the end you only kill off the upper middle class down.
You are correct under the idea posted by the OP. However, you can tax wealth (rather than income) under the Fair Tax and it will not destroy generational wealth. The rest of your post is dead on correct.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
