The point of the estate tax is to tax deep pockets, just like any other tax, and that is what Warren wants to do (see subject).
Yes money is taxed repeatedly as it is used in various transactions, but that’s not what I’ve been talking about. I’m talking about money that is taxed multiple times without any underlying transaction. That doesn’t really happen right now.
If several taxes are applied on one transaction, does that violate this principle? Why or why not?
I’d need an example, but I’m thinking like you buy something at the store, and there is a city levied sales tax, and a state levied sales tax. That would fit, but because of different jurisdictions it wouldn’t be double taxation in the sense I’m thinking. To fit, it would be more like you earn $100 and the feds tax you 10% when you get it so you are left with $90 and you put it under your bed. Then the next month, they tax you another 10% and you owe an additional $9 without engaging in any other activity. It’d be like putting a decay rate on money, or an interest cost for the privilege of holding money.
Ultimately it’s a value judgment whether you are okay with double taxation. You seem to be fine with it. I’d be opposed. But right now, it doesn’t happen so if we move to a scenario where it does happen, that’d be a change.
The example I’m thinking of is that when I get a paycheck, it is subject to Federal income tax, two Federal payroll taxes, and a local income tax. One transaction, four taxes, three of which are Federal.
But if you’re talking about money at rest, is it that you object to taxation when there hasn’t been a transaction? Like, annual property taxes on things you own (and are not being purchased)?
It does in one obvious place: real property.
There’s already a wealth tax for everyone in the lower 95% because the majority of their wealth (for those of them who have any wealth) is in their house. It’s only the really rich who don’t pay a percentage of their wealth in taxes.
Currently when you inherit property you get to change the cost basis to the value at teh time you inherit. So the “income” of the capital gain is not taxed. If you eliminated the estate tax completely, you should certainly change this so the the capital gains would not escape taxation.
You can get OASDI, and a bunch of other federal taxes all levied but they are essentially different taxes applying to the same transaction. So OASDI may be 7.65%, but 6.2 is one component and the 1.45 is another, but those aren’t going to the same place so I don’t consider them the same tax. That multiple things may aggregate together doesn’t necessarily mean double taxation.
Yes, I object to taxation when there isn’t a transaction. Real property taxes are slightly different. First it’s state, not fed so the taxing power is different. But second, my thinking on this is that you own the land but receive certain services in connection with that ownership and as a result the annual tax levy is a more efficient way of collecting than it would be to do it piecemeal.
But on a federal level, there just isn’t a thing where money at rest is taxed.
I don’t love the idea of a wealth tax but I think a tax focused on people with over $50M really is a different kettle of fish. It’s not about hating the rich, it’s just that is a huge chunk of change to be sitting idle. Economists often worry about people saving too much, the 1%ers are more an issue on that front than the rest of the country combined.
It’s not like 1%ers are just sitting on piles of cash. Their money (most of it at least) is invested in various ways, working in the economy.
Some of it is, some of it isn’t. If you have a $5M cottage in Martha’s Vineyard, that you intend to leave to your grandchildren, that’s not invested in the economy
How is this more proportional based on income? Do you think that billionaires spend more, proportionally, on yachts, ferraris, and beach homes than average Joes spend on bread and milk?
This presupposes their money in invested *in *the national economy. Mostly it’s not. I guess you could make a sort of Adamsmithian argument that investing in Ukrainian or Chinese businesses helps *America *akshully because it helps Chinese businesses churn out the best goods and services that China can make in some sectors which they can in turn exchange for the best goods and services America can make in other sectors and everybody wins, hurray. But to the extent it is true it’s a very long term, diffuse, almost abstract social benefit while taxing their golden cocks off provides a more immediate and tangible redistributive one.
Plus I fail to see how a Rembrandt stashed in a bank vault works in the economy 
We do it with the estate tax all the time.
They’ve been trying to address the tax gap for decades. Noone wants to fund the IRS.
You ever pay real estate taxes?
I wonder if a national property tax could serve similar purposes – exempt the first $1 million (or so) of one’s primary residence, and all other real estate property gets dinged at .5% per year, or something like that.
EDIT: Might not be constitutional; I’m not sure. Maybe could be tweaked to get by the direct-tax limitations (i.e. each state gets a portion under the above principle, or something like that).
Maximum once per life, at not insubstantial cost. And Warren says we need to change the procedure but details are scant. Hence the thread.
This isn’t true.
Even before I heard of Warren’s plan I have converted to a wealth tax supporter, leaving aside the scant chance that it could be implemented. We’re no longer in a long-term debt crisis but a medium one, so we need to take semi-drastic measures to confront it.
I think that if we implement a wealth tax we can let the payers use it to offset estate taxes - the treasury would still come out ahead due to inflation and any payments beyond the estate tax, and we need the money now and not 20-30 years down the road. In the long term we can eliminate the estate tax because the only people who should be paying it are ones who should be paying the wealth tax as well.
We also need to reduce the ability to hide the money in trusts. Possibly a greatly extended gift tax exemption but have it apply to all recipients, so you would only be able to set aside a low six figure amount every year to a trust or your heirs, but not both. This would further enable the merely rich to plan for a managed transfer of wealth. Hit everything beyond this exemption hard. (Charitable gifts would be okay as long as there was no quid pro quo and no control between the giver and the charity.)
The “fleeing megawealthy” problem is the easiest to solve, much easier than the problem of valuation or constitutionality. Just don’t let anyone back into the country if they haven’t paid their tax, even if they renounce their citizenship. Not a lot of people are willing to forego America for the sake of a few more millions in their billionaire’s bank account. I’m not sure that I’d go so far as to prevent them from leaving like some have proposed.
Reading the thread before you multipost tends to resolve a lot of questions. Whatever floats your boat.