Opinions on estate taxes and other issues

[Prometheus]

The estate tax in america is set at 55 percent at its highest. It also allows something like two million dollars to change hands mostly untaxed if i have my facts right. Seems reasonable to me. There's a bill trying to pass right now which among other things will lower this estate tax to 35 percent at its highest while sumultaneously extenting the bush tax cuts to the wealthy and extending unemployment benefits for 11 more months. How does this make any sense? i know the estate tax is a very ineffective source of revenue(Read it online at a few places) but putting that aside, why are we stopping up another source of revenue(Taxing the rich more) at the same time that we are handing out money which we all know we don't have?  Are our leaders really this stupid? We already saw during the bush years that the the whole "wealth trickles down" arguement is nonsense. it just didn't work. I personaly know dozens of families who are suffering from unemployment right now. Those tax cuts were supposed to create jobs for them according to bush. While this is going on, the rich get to keep their tax cuts and now will apparently get to pass more of their wealth on to their children. i've studied the history of rome(Among other things) and its alarming how similar the flaws in our current system are to those of the roman repuplic. it seems that the upper class tends to form an oligarchy using its wealth to influence those in power who in turn help this upper class gain more wealth which in turn gives them more control over those in power who in turn... You see where i'm going? This sucks.

Its clear to me that strings are being pulled in washington to benefit them wealthy at the expense of our nation as a whole. the unemployment extension reads as bait in a trap to me. Those extra 11 months might seem like a victory to the desperate families who need them but just imagine how much money we are losing to the tax cuts. Seems like a very one sided deal here not to mention the fact that we are all losing because we seem to be finding better ways to bankrupt our government every year. I swear im gonna wind up starting some kind of revolution before i die(Most likely will be the cause of said death ).

[Whitney]

Is estate tax on top of the income tax charged when someone received a monetary gift or is it a special case replacement for such a tax?  If it is on top of income tax that seems like double taxation to me.  I think we should just switch to flat tax...you make X per year you pay in X per year; tax forms would simply ask how much you made (no room for loopholes, would have to lie in order to not pay fair share).

[Prometheus]

Im not sure. If i understand it correctly, its an either or situation. Either u give away your estate or portions of it as a gift prior to death and it is taxed according to those gift laws(No addition that im aware of from this "death tax") or you wait until you die and the estate is taxed according to the "death tax" law. So to sum up, it doesn't seem to be a double tax on the person recieving the estate however it is obviously an "double tax" tax overall since the estate owner must have already paid income tax on the money during their life time. It really only effects people who have millions of dollars to pass on. I'm in favor of it as it seems to be the only way we have of keeping most of our countries wealth from being hoarded up by generation after generation of non working aristocrats(The idea is that the money is invested into means of production and these elite profit from the dividends while not actually contributing anything to the economy(Obviously they do contribute the capital they invest but it is debateable whether it is "fair" for them to be born owning such incrediable wealth instead of having to work for it.).). Also, history has shown us that when so much wealth is held in only a few hands, it is generally bad for the society as a whole(The lower class suffers the most. From poverty and injustice while these elite live richly. Read "a tale of two cities"(Fictional but it reflects an obvious truth) for a bit of perspective here.).

This is definately a "gray" issue as far as what is wrong or right. To be perfectly honest it doesn't seem "fair" for the governemnt to basicly steal money from people who have earned it honestly .  Niether does it seem "fair" for an entire class of people(Typically most of the population) to work hard their entire adult life barely earning enough to survive only to leave their children in exactly the same situation they themselves were born into(Look around you this holday season at unemployed families and their children with few christmas gifts to unwrap. Consider those who lost their homes as well.). It seems to me that this tax is the lesser of two evils since history has given us a clear picture of world in which such measures aren't in effect. Even now there are problems but at least we can generally expect to keep ourselves fed and sheltered.

[McQ]

Is estate tax on top of the income tax charged when someone received a monetary gift or is it a special case replacement for such a tax?  If it is on top of income tax that seems like double taxation to me.  I think we should just switch to flat tax...you make X per year you pay in X per year; tax forms would simply ask how much you made (no room for loopholes, would have to lie in order to not pay fair share).

Yay, Flat Tax!

[Recusant]

The estate tax in america is set at 55 percent at its highest. It also allows something like two million dollars to change hands mostly untaxed if i have my facts right. Seems reasonable to me. There's a bill trying to pass right now which among other things will lower this estate tax to 35 percent at its highest while sumultaneously extenting the bush tax cuts to the wealthy and extending unemployment benefits for 11 more months. How does this make any sense?

It makes sense because the plutocrats are the ones in charge.  Both the majority of Democrats, and practically all of the Republicans are their pawns, so we get the legislation which pleases those in charge.  It may not make sense from an economic point of view, but economists are for sale too, and you can find plenty of them who will say that this sort of tax scheme is actually ideal.  There was an excellent proposal put forward by Senator Mark Warner* in which he suggested that instead of extending the tax cuts for the wealthiest 2%, we end those cuts and "enact $65bn in new, targeted business tax cuts and incentives to spur private-sector investment."  Entirely sensible, but ignored.  

Is estate tax on top of the income tax charged when someone received a monetary gift or is it a special case replacement for such a tax?  If it is on top of income tax that seems like double taxation to me.  I think we should just switch to flat tax...you make X per year you pay in X per year; tax forms would simply ask how much you made (no room for loopholes, would have to lie in order to not pay fair share).

Yay, Flat Tax!

I disagree.  Flat tax is basically regressive.  In other words, the burden falls inequitably on lower income and middle class taxpayers.  During some of the most prosperous years in the US, the federal tax was much more progressive than it is now. (Progressive = burden falls inequitably on wealthy taxpayers.)

From "Flat Tax Is Class Warfare" by Holly Ulbrich:

A flat tax would shift tax obligations from the rich to the poor, and especially the middle class, and eliminate desirable tax incentives for retirement savings, home ownership, and charitable contributions. Simple? Yes. Efficient and equitable? Not so much.

*You may need to sign up for a free account at Financial Times.com to read the article written by Senator Warner.  If anybody is interested, and doesn't want to sign up, I could provide some relevant quotes.

[The Magic Pudding]

Is estate tax on top of the income tax charged when someone received a monetary gift or is it a special case replacement for such a tax?  If it is on top of income tax that seems like double taxation to me.  I think we should just switch to flat tax...you make X per year you pay in X per year; tax forms would simply ask how much you made (no room for loopholes, would have to lie in order to not pay fair share).

If you try to create fairness in a tax system it is likely you'll create the opportunities for loopholes.
The difficulty of creating a fair tax system isn't a reason not to try.
I'm not shore if Whitney's post is calling for a flat rate or no deductions.
Deductions are a necessity, unfortunately as long as they exist opportunities for creative accounting exist.
I have heard suggestions of system where say $1000 dollars of deductions are assumed for personal taxpayers.
This is simpler but not fairer, people with no valid deductions gain the same benefit as those that do.
General anti-avoidance measures, "striking out any scheme which has as its dominant purpose the reduction of tax" are useful.

I agree with Recusant regarding the regressive nature of flat tax rates.

The estate tax rate of 55% seems incredibly high, I think I'd retire to a friendlier place if I faced by something like that.

[Sophus]

The estate tax rate of 55% seems incredibly high, I think I'd retire to a friendlier place if I faced by something like that.

Retire? You'll be dead.

[The Magic Pudding]

The estate tax rate of 55% seems incredibly high, I think I'd retire to a friendlier place if I faced by something like that.

Retire? You'll be dead.

I'll only be dead a while for tax purposes.

[Davin]

Is estate tax on top of the income tax charged when someone received a monetary gift or is it a special case replacement for such a tax?  If it is on top of income tax that seems like double taxation to me.  I think we should just switch to flat tax...you make X per year you pay in X per year; tax forms would simply ask how much you made (no room for loopholes, would have to lie in order to not pay fair share).

Wait, do you mean like a flat percentage tax (everyone pays 10% of their income)? I'm for that.

There is another thing some people call "flat tax" where everyone pays the same set amount no matter how much they make (whether you make $10,000 or $1,000,000,000 in income you pay $10,000 in taxes), which I'm opposed to.

[joeactor]

Is estate tax on top of the income tax charged when someone received a monetary gift or is it a special case replacement for such a tax?  If it is on top of income tax that seems like double taxation to me.  I think we should just switch to flat tax...you make X per year you pay in X per year; tax forms would simply ask how much you made (no room for loopholes, would have to lie in order to not pay fair share).

Wait, do you mean like a flat percentage tax (everyone pays 10% of their income)? I'm for that.

There is another thing some people call "flat tax" where everyone pays the same set amount no matter how much they make (whether you make $10,000 or $1,000,000,000 in income you pay $10,000 in taxes), which I'm opposed to.

Agreed (the second version would be terrible for the poor/middle-class)

Flat tax. No deductions. No exceptions. No loopholes. You make $1, you pay 10 cents. Period.

... oh, and in JoeLandia, all assets you own in excess of 10 million dollars must be donated to charities, or the gub'ment takes 'em!
(ok, so maybe that's not gonna fly...)