Inheritances and capital gains are income and should be equally taxed as such. If you ignore them as income you reveal yourself to be someone who doesn’t really believe everyone’s tax burden should be equal.
In a progressive system, nobody’s “tax burden” is going to be equal.
Congress in its wisdom (yes, well) created different categories of tax to address/incentivize different types of economic activitiy. Working at your job is one, investing is another, dying (with a lot of money) is (apparently) another. They made different (probably wrong) assessments of which level of taxation would cause the positive activity they wanted (working and paying tax on wages, investing in American business, spending your money while you were alive rather than hoarding it) without creating excessive disincentives (taxing investment gains at a rate that significantly discourages investment). The incentives that get me up in the morning to go to work are not the same as the ones that encourage or discourage me from speculating in the stock market, and certainly are different from the ones where I decide whether to leave my kids a lot of money or spend it now. It’s no surprise that three separate congressional assessments of three separate sets of incentives could lead to three different rates.
My basic proposition was, when Congress (for whatever reason) parcels out a class of income into different buckets (as it has), everyone should pay something into each bucket if the bucket applies to them (you can dodge the cap gains by not investing; you can dodge estate tax by spending all your money now).
Put differently, pretend for a moment that I run Congress (I don’t). Would I support a system in which we don’t bucket people’s net income into differently-taxed categories but have a single tax rate for all sources of income? Yes, I would. I’d even grudgingly accept a progressive rate structure.
But it’d have to include significantly lower respective percentage rates than current top marginal rates on wages, or you’d just be massively inflating federal tax revenue and spending.
You say that as if taxing all sources of income equally is a concession you’d make in exchange for your real goal of lowering all taxes–is that correct? If so, why? Wouldn’t it be much fairer to say that, whatever income you get from whatever source, be it inheritance, gifts, stocks, or sweat of your brow, it’s taxed the same way? And if this increases revenue, well, pay that national debt down!
It may be a shock to people with Huerta’s POV, but our government is not a corporation. It is a social institution. It may engage in redistributive activity without issuing any apologies. Its primary goal is not maximizing profits for shareholders.
We can’t restrict the vote to the landed because the ultimate result will be the repeal of the 14th Amendment. Is that what you want?
There is no tax on dying or on dead people.
The only economy where inheritance doesn’t count as income is a feudal one.
Sure. But what is the rationale for taxing this single rate at 35% vs. 20%.?
The former means that everything I ever make, from sweat of the brow, to investing in start ups, to my dad’s success, is subject to a 1/3 levy from a largely parasitic entity.
By the way, capital gains and estate tax – all those windfalls were already taxed the first time around.
Question time: I have a business propostition for you. I’d like to start a new business or investment with you. You’ll take on all the downside loss. I won’t invest dollar one in your business or investment. But if you succeed, I’ll take $35% of your profits.
You in?
The government is not a “largely parasitic entity”, Huerta88. It provides vital infrastructure and services that would not exist otherwise. Much of what makes our civilized world possible is not profitable and would not be touched by a corporation. The government, at Federal, state, and local levels provides law enforcement, public health measures, disaster relief, and ensures those who are too old, too young, or too disabled to work are not left to starve.
To say otherwise is a gross untruth and well illustrates a point the columnist made when he said that idolizing the Constitution while hating the government is nothing more than a form of schizophrenia.
If ever the point comes when favoring the United States Constitution over some dumbass alternative form of government equals schizophrenia – I’ll take schizophrneia for $2000. You think you’ve come up with something superior to that sublime statement of how government should be? Good luck, rookie.
And thus does Huerta88 demonstrate clearly how the GOP has reached its agenda, which truly is nothing more than helping very rich people to get richer, regardless of the consequences for anyone else.
Curious to know how you reconcile this with my readily-available opposition to the whole Iraq war, which is all out there and which was in line with my non alliance with the GOP mainline, petro-fueled, agenda.
Huerta, are you aware that the estate tax currently ignores the first five million (per parent) and the recipient is only taxed on what comes after that?
Perhaps a better point, since no one here seems mature enough to disengage from the personal: I will benefit not at all (darn you, Ma and Pa Huerta) from the estate tax rules,and very minimally if at all (darn you, Huerta) from any capital gains tax rules. No plutocrat I, just a relatively high income earner who resents class-based tax ideea.
Well, first answer is see my post of a moment ago. That won’t affect me or mine.
But to be fair and answer your question – yes, I am aware of the limits. I do not think that accumulating five million dollars (there is no chance that anyone in my family would ever do this) is a mark of moral obloquy, so I am not sure why dying with that much in the bank should trigger a tax event.
Because we fought a war so that we could live under our current constitution instead of a hereditary monarchy?
We get it, we get it, you’re a paleocon, like Pat Buchanan.
It isn’t the dying that triggers it, it’s that the heirs have received massive income. And don’t give me that “double taxation” crap. Much of what the heirs get has never been taxed a nickel in the first place. Gotrocks Sr. buys 1000 shares of Acme at $1 each, when he dies 40 years later they’re worth $1000 each. His $1000 investment is now worth $1,000,000. Never having sold the stock, he never paid tax on the $999,000 gain. So Gotrocks Jr. gets $1,000,000 worth of stock when dear daddy dies. This is income to him, so junior should pay tax on it.
My favorite explanation of"double taxation".
