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[color=black][font=Verdana]Because it destroys his contention that evil inheritance taxes destroy family business and take from the most deserving heirs.
He's right, though. That tax is a ridiculous penalty against success in America. How can you justify the government taking back nearly half of a person's wealth (beyond a certain threshold) upon death? Try to pull your condescending emotions out of the mix and debate the merits of the tax on their own, please.
Money's gotta come from somewhere. If you don't tax from the dead, you have to tax from the living.
While this is technicallly true, it also points to a fundamnetal problem; it seems that we are all willing to acccept that the government simply MUST collect more money. I disagree. I think the very first priority of the government ought to be to reduce it's size & reach. The federal government spends too much money on too many things that it ought to have nothing to do with. If we get rid of the bloat, the beaurocracy, the wasteful spending, the pork barrel projects, the pandering socialist programs meant to cater to specific groups so those groups will continue to vote for the guy who gets them the funding, we will see that we don't really need to collect quite as much money from anyone, dead or alive.
I think the very first priority of the government ought to be to reduce it's size & reach.
Then you'd have to elect representatives who would actually implement such policies.
So long as we don't have that - well, the money has to be sourced somehow. I'd rather we at least try to source as much as possible from existing money, rather than accumulating yet more debt.
But even if the government were miniscule in size, there are several good economic and social arguments for collecting that small pot of money from estate taxes. Starting with the principle that, since money has to come from somewhere, we should have a general preference that it come from the dead, rather than the living.
But even if the government were miniscule in size, there are several good economic and social arguments for collecting that small pot of money from estate taxes. Starting with the principle that, since money has to come from somewhere, we should have a general preference that it come from the dead, rather than the living.
That's a rather silly, and seemingly uninformed, interpretation of the estate tax. When you tax a persons estate, you aren't taxing the dead guy, you are taxing his heirs. And you are taxing money that's already been taxed, most of the time. The guy paid taxes on it when he earned the money in the first place. He probably paid taxes on it again when he bought the asset that he was trying to pass on to his family, as most intergenerational wealth is not in the form of uninvested cash.
"Let's tax the dead," sounds like a simple way to do things without any argument from the guy who doesn't need the money, but it sidesteps reality.
Keeping inheritances low enough that the heirs still have to work for a living is a good idea. If an heir cannot survive on 5% of 10 million (500K/yr) my heart purely bleeds.
Keeping inheritances low enough that the heirs still have to work for a living is a good idea. If an heir cannot survive on 5% of 10 million (500K/yr) my heart purely bleeds.
I appreciate the honesty in your statemnet. You want to take the money out of the estate because you don't want the kids to benefit from his or her parents success. I disagree with the concept, but I appreciate that you are honest about it. Taking away the money a family made just so you can feel like the kid is earning his keep is not what a government should be doing. You & the government have no right to decide what a person can & should be able to live on. My hope is that I can teach my kids to be completely self sufficient and more successful that I have been, but that I can leave them enough so that they will never HAVE to.
When you tax a persons estate, you aren't taxing the dead guy, you are taxing his heirs.
You are taxing the estate. The heirs of the estate might be piqued that their cut is smaller than it otherwise might have been, but the estate itself was the "issue" of the dead person. And double taxation is hardly new. It's not like you get a sales tax abatement if you pay for something using money that had already been subject to previous taxation. Not to mention the economic argument that many assets subject to the estate tax are unrealized capital gains which actually haven't been taxed previously.
Estate taxes of one form or another go back to ancient times, and they served an important social function in preventing the radical accumulation of inherited wealth among a tiny oligarchic class. Societies developed early practices such as requiring the wealthy dead to be buried along with many of their possessions, along with a cultural taboo against graverobbing. Societies with no controls on inheritance often found themselves staring down revolutions or revolts among the sub-oligarchic class.
Note that, in the US, we're not really talking about many estates at all that actually exceed the exception limits. Out of every 10,000 estates, about 25 are subject to the estate tax. So we are really arguing over the estates of the top 0.2% of the US population. Not even the "top 1%" or "top 10%."
We already have a long history of "rules against perpetuities" in the common law, and in the law of trusts and wills. The estate tax in that sense is basically a form of the gift tax. It has a long history, and many economists support it.
So long as we need to get the money from somewhere...
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