Thursday, December 16, 2010

Estate Tax aka(Death Tax or Inheritance Tax)

There is a lot of debate on this issue lately and I think it falls into two distinct views of how you view what America should be.

1.) What a person makes in their life time should be theirs to do with what they will after they die.

2.) Or America is a Meritocracy where everybody should have equal footing starting out life based on merit rather than birthright.

I don’t think these two ideals have to conflict in the way that they do and I don’t think the details of the estate tax make as big of an impact as people make them out to be.

Some of the main points in view number one to consider is that most property can pass to a surviving spouse without taxation (this happens to be one of the reason I am a huge supporter of civil unions) it only comes into play by and large when passing money on to descendants.

In the real world when a person gets a bonus it is taxed at a higher rate depending on your tax bracket up to 45% of the amount is taxed. When a person dies and passes on a large sum of money to their children who, and this can be debatable, did not earn the money. What is so wrong with taxing it as a bonus to the children? It might seem a little macabre to look at a deceased persons assets being split up to descendants as a bonus for them but I think altering the way we look at this tax will cause it to be seen as fair as long as it does not exceed the tax rate found in other similar transfers of wealth around the world.

It is not like the descendant gets nothing at all it is use treating the unearned transfer of wealth the same way any corporation must treat it.

It enforces the value that is central to the founding of this country of equal opportunity for all instead of creating system that rewards people simply for birthright rather than for effort and contribution.

1 comment:

Rocketstar said...

People also forget that without the masses, the wealthy would have never been able to amass such wealth. Without their consumers, they are nothing.

It's giving back to those that gave to you. Also, the estate tax impacts less than 1% of the US population, the ULTRA wealthy. They will nto miss it.