My absurd claims in The Pit have prompted this question:
have any studies been conducted that hypothesize what the government’s revenue stream would look like if income tax was cut by x% across the board, and estate/gift taxes were increased to 100% after exempting the first x dollars?
are there any other “economic theory” reasons why estate taxes are disfavored?
We tend not to tax the rich in this country. We tax high income earners. The rich are well-represented on both sides of the aisle. That’s one reason very high estate taxes will not happen.
A practical reason is ownership of businesses. It’s tough to keep them in the family if the business which once belonged to the deceased now belongs to the government.
A third reason is an argument that the money has already been taxed once. It hasn’t of course, if the estate has risen in value since acquisition, but it is still a common argument.
None of these are insurmountable.