Skip to comments.Inherited wealth shouldn't get a free pass on taxes (According to the LA Times )
Posted on 07/06/2010 8:12:27 AM PDT by SeekAndFind
Repeal of the estate tax imposes significant costs on the taxpaying public and promotes concentrations of wealth that harm our democracy.
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(Excerpt) Read more at latimes.com ...
REASONS GIVEN BY RAY MADOFF ( THE AUTHOR OF THIS PIECE, wonder if he’s related to Bernie ), AS TO WHY THE DEATH TAX SHOULD NOT BE REPEALED :
* The most common reason given is that this money has already been subject to tax when it was earned by the decedent and to do so again would constitute “double taxation.”
But there is no general principle that says income or property gets taxed only once. To the contrary, property is often subject to multiple taxation when it is used for different purposes.
In any given day, we are all subject to a variety of state and federal taxes. For instance, your earnings are subject to both income and payroll taxes, and that money is taxed again when you pay sales tax on your purchases and property taxes on your home.
* It is not dollars that are subject to tax it is taxpayers. When a person earns $50,000 and then pays his mechanic $2,000 to fix his car, the mechanic cannot avoid taxes by claiming that the money was already subject to tax when earned by his customer.
* Congress is giving up a valuable source of revenue. During the last 10 years, the estate tax has raised about $25 billion each year. Moreover, it has been estimated that if inherited income were subject to income taxes, this would have raised roughly $90 billion in 2009 alone.
Money raised from taxing inheritances could be put to good use: alleviating the tax burden for the less well off, funding programs that benefit the country as a whole or reducing the debt that we are passing on to our children.
* Failing to tax large inheritances promotes concentrations of wealth that harm our democracy.
The United States is a very affluent country, but the wealth is distributed in a highly unequal manner. A few Americans own an enormous amount, and a large number of Americans own hardly anything at all.
* Disparity in wealth is far greater than disparities in income. Whereas the top 1% of earners earn 20% of all income, the wealthiest 1% of Americans own more than 33% of the country’s wealth. In contrast, 80% of households combined own less than 16% of the nation’s wealth. Inheritance plays an important role in creating this wealth gap, and failing to tax inherited wealth exacerbates the problem.
* Studies consistently show that high concentrations of wealth correlate with poor economic performance of the country as a whole. Although no single cause has been determined, economists suggest that the reason is insufficient investment in education and other resources that benefit the country as a whole.
* Governmental policies in a democracy are supposed to be policies of the people being governed. But the wealthiest Americans the group that tends to be able to either run for office successfully or fund the campaigns of others have very different concerns than the general population.
Wealthy Americans have privatized education for their children, privatized security for their homes and privatized medical care through no-insurance concierge doctors. They are less likely to have the same level of interest in devoting taxpayer resources to good-quality public education, effective police and fire protection, and affordable medical care let alone rights for workers and the unemployed
* The estate tax, combined with such programs as the GI Bill, federal mortgage assistance programs and loans to small businesses, promoted a strong middle class and reduced the wealth owned by the top 1% from its high of 56% in 1912 to less than 20% by 1976.
HAVE A GO AT IT MY FRIENDS. THE ABOVE ARE YOUR STANDARD LIBERAL ARGUMENTS...
How many times must one be TAXED when they are ALIVE!
When they die, the money should be distributed to those indicated in the will and those receiving is as “income” should NOT be taxed on it.
His heirs have hit the tax-free jackpot.
Yeah, your house wasn't looted while you were at the funeral! It's a jackpot.
One thing I would like to know: How much of the Kennedy family fortune has been turned over to the tax man for death taxes since Joe Kennedy died? His generation, just about all (and maybe all with Ted's death, I didn't check for sure) of the next generation and some from the following generation should have paid. How much was actually paid and how much was hidden in impenetrable trusts which the elected members of the family make sure the IRS doesn't look at too closely? Libs, don't come crying to me that there should be an estate tax unless you can look me in the eye and say that 3/4 (50% with Joe's generation and 50% of the remainder with John, Robert and Ted's generation) of the Kennedy family fortune has been paid in estate taxes.
(Side note: a few years ago a very, very liberal family member was trying to get everyone in the family to put our money in some family trust because she said that the rich like the Kennedies use them to keep from paying estate taxes. I asked her if anyone in the family had a direct line to the IRS and then did a pretty good imitation of Ted Kennedy saying "If any IRS agent audits me, he'll be doing his next audit in Fahgo!")
A bit of the same old same old BS Marxist line. The money earned has already been subjected to federal and state income tax, capital gains tax, and a whole raft of other taxes. If Mr. Smith or Mrs. Jones wants to leave it to his/her kids, that’s up to them - but additional taxes?
How much is enough?
To the socialists who run most things these days, we should all pay taxes on the air we breathe, and would certainly be doing so if only the Marxists could figure out how to bill everyone.
Maybe the thing to do is get politicans to limit their extravagance in greasing their constituents’ palms.
No, that would set a limit on corruption, and we can’t have that!
Do you really believe that RAY MADOFF is not going to make sure he slips his life long earnings TAXFREE to those he leaves behind and cares about?
Yes, those are they typical greed oriented liberal excuses for greed. When it comes to the money of a LIBERAL though, the rules are the OPPOSITE. For some odd reason, as seen on Obama’s cabinet, they don't see the need to PAY THEIR TAXES and yet there is little outcry form their liberal base - WHY IS THAT?
Spending needs to be reduced and the “progressive” income tax needs to be replaced with a tax on wealth. That will allow upward movement by increasing income (which is currently punished), as well as remove the need for the estate tax.
I’ve made a serious decision regarding my “estate”.I’m gonna spend it...give it away (”legally” or “illegally”)...burn it...rather than see any government hack get his/her/its grubby fingers on a nickel of it.If I get any advance warning of my passing I’ll do one or more of those things.
You know..I don't usually do this to a Freeper but here goes...your post sounds so much like those in this country who haven't acheived anything or saved anything that I wonder what you're doing here on a forum where most of the members have.
“Inherited wealth” has already been taxed multiple times already! idiots stuck on stupid LA Times....=.=
“Good grief! This guy’s article reads like a Communist Manifesto...everyone should have the same wealth and income. Really? If that’s the case, then why has every communal experiment in the world, from New Harmony, IN and Owenism to Communist Russia, failed? “
They all failed because Eeeeevvvvvvvvvvviiiillllll Capitalism still existed...
It is not the taxpayer, as in a pure headcount numbers game, that is being taxed. It is the fruit of one's labor that is being taxed.
What makes the "poor" in our country not taxed? What is it about the poor that we do not call them "taxpayers," or are they "taxpayers" who are exempt from paying taxes? It is because they are not producing anything with their labors, and it is their labors that are being taxed.
By purchasing an item and paying a tax, it is not the consumer who is really being taxed, it is the laborer who produced the goods. The tax is just being added to the purchase of the good so that it looks like it is the consumer's wealth that is being taxed.
Naw, really, tax us some more...pretty please, tax us some more.
Damn, almost half our income goes to pay some sort of governmental beast.
Uncle Sugah, get out of our lives, will ya.
RE: Inherited wealth has already been taxed multiple times already! idiots stuck on stupid LA Times....=.=
Well, this author has little sympathy for arguments like the above. His response is the standard — “it’s better for the government to have your money”.
Here’s his argument :
“There is no general principle that says income or property gets taxed only once. To the contrary, property is often subject to multiple taxation when it is used for different purposes.
In any given day, we are all subject to a variety of state and federal taxes. For instance, your earnings are subject to both income and payroll taxes, and that money is taxed again when you pay sales tax on your purchases and property taxes on your home.”
In other words, to the author, tax payers haven’t been taken from enough in this life. Their heirs need to be taken from even more just as they have been taken from when they were alive.
Already Taxed as Income.
Taxed again as Capital Gains.
Tax it again upon Death!
As I said, the author is an idiot stuck on stupid.
end taxation without respiration, the person that bequeathed the money already paid taxes on it, when they earned when they saved it when they invested and when they spent it, for the love of god do they have to tax it again when you die?
1) very few people pay estate/inheritance taxes. There are too many work arounds.
2) This is a hot button issue that evokes a lot of emotion but few know what they are talking about.
3) Getting rid of the estate tax in reality is revenue enhancement for the govt but no one will ever admit it. With an estate tax, assets get a stepped up. Valued at 1 million in estate and you sell it for 1 million, assuming you are an heir, there is no tax. No estate tax and you will be taxed on the gain in value from when your parents bought it.
4) I think one of the original arguments for an estate tax was to avoid the concentration of wealth and power. Our founders say the danger of concentrated wealth in history. I am in favor of this as a conservative, but in reality the estate tax does not solve this concern.