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Post #41
The "double dipping" thing doesn't really make much sense. I can see the logic in it; it's not like you don't have to pay taxes on your paycheck because your boss already paid taxes for it.
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im going to spend my entire fortune on the most expensive single cigar i can buy, then im going to smoke it on my deathbed so my money doesnt go to burnt out morons who are on foodstamps because they never went to college and arent in college because they'll lose their foodstamps
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I think most people who are against the death tax are also against other forms of double taxation, e.g. separate payroll and income taxes.
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Milton Friedman explains it pretty well. Try the 1:50 mark.
In essence, taxing your wealth while you're dead incentives you to dissipate it while you're alive, instead of forming long term capital that can be worked and improved upon in further generations.
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It's an estate tax, and anyone who says death tax is fucked in the head.
Of course there should be an estate tax. An estate is a transaction, and like any other form of income it's taxable. If you're a greedy fuck like most people in this thread that gets bent out of shape over a number next to a dollar sign, then get a fucking grip. If your family has enough money to be affected by the tax (i.e. $1 million or more), then what the fuck is the difference between $10 million and $5 million? That's still a shit load more than my parents would ever be able to leave me.
You're not moving down the economic hierarchy because the tax applies the same way to everyone. You aren't going to go from a millionaire family to living on food stamps because the government taxed some of your estate.
And it should be mentioned that like tax brackets, the tax would only apply on money over $1 million. If you have $5 million, $4 million is taxable and the remaining $1 million is tax free. Boo fucking hoo, sad day for you.
Edited:
See, this is where all of you are wrong. It's not being taxed twice. When you die and give your money to somebody else it's being taxed as income for the recipient. The dead person isn't being taxed.
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but why should you be taxed for receiving a gift of money from a dead family member or friend? gifts of money are considered non-taxable income when the giver is alive, why does it change when the giver dies?
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those are taxes for GIVING gifts, not receiving gifts. According to the IRS (http://www.irs.gov/businesses/small/...8139,00.html#1) the donor pays, not the recipient. And since the estate tax is a tax on the recipient not the donor (just like you said), it contradicts the IRS's current stance on gifts.
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It doesn't matter who physically pays the tax, the question is who bears it's burden. In case of inheritance tax, it's the dying person the one who pays the government to leave money to their children, regardless if it's them that actually send it the check.
The incentive is clear, the more your inheritance is taxed, the more you'll want to dissipate it while you're alive instead of forming long term capital.
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Inheritance tax is, to me, bullshit. The guy who died worked for it and wants his heir to have it, so the state should not get a single dime, unless they haven't made a will, then it's all for the state.
YOU LIVE, YOU GET TAXED
YOU DIE, YOU GET TAXED
THE TAX IS UNESCAPABLE.
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I think it should be kept.
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Because the gifter can't fight the tax when they die.
That's just nonsensical. What if you die suddenly before you "dissipate" your funds? "Sorry, we're going to take the money you wanted to give to your kids. We need the money to build a bridge in Alaska that no one needs."
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what? when the gifter is alive they pay the tax, how is that "fighting"?
Edited:
huh? he's arguing for why we should REMOVE the "death tax", not arguing for it.
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Eh, I think I misunderstood your question. Sorry.
I do agree with him, I was just making a cynical statement in support of it. Sorry for the poorly worded response.
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In the Milton Friedman video, he was only responding to a 100% tax, which nobody (afaik) in this thread is arguing for.
If it's say like 25-50% then that same incentive to blow your money isn't there.
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Except it is. Think about it, giving inheritance buys you a "good": your son's well being if you want.
Spending your money giving inheritance gets more expensive as you tax it, so you substitute "giving inheritance" with goods you can buy while you're still alive. For instance, if taxes are 30%, for every dollar you give in inheritance the government takes 0.3 cents, so your sons only receive 0.7 dollars. If on the other hand you spend that dollar while you're alive, you get to use all of it. Death tax can be seen then as the cost of not spending your money while your alive.
And since inheritance tax is progressive (the more you inherit, the more tax you pay), buying more of that "good" gets progressively more expensive as opportunity cost, which is spending your money while you're alive, rises with it.
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Is this still taken from money donated to charities? That just seems wrong.
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I don't understand the question. Non-profit organizations are exempt from taxes iirc.
