[quote=GoUSC][quote=UCGal][quote=enron_by_the_sea]I was first be happy to not have to pay more in taxes next year. Two seconds later I realized that I would be paying that with interest one way or another in the future anyway! So I don’t what the big deal is about.
If they had done it without adding to the deficit (in the long term) then I might have been impressed….[/quote]
+10.
This just added a trillion bucks to the deficit. Much bigger than TARP 1.
One of the little things in the law – the rich (and anyone else with a spare $10Million) can now gift their kids $10M, tax free. If they do it in the next 2 years. This is in addition to the estate tax changes… ($5M tax free.)
So if your older and may die in the next 2 years – you could give $15M to your kids tax free.
Now where did I put that spare $10 million….[/quote]
I have never agreed with the gift or estate tax. It is pure double taxation. Why should my kids have to pay taxes on money that I earned and paid taxes on already? The answer is not more taxes. The answer is less government spending.[/quote]
Though I would be considered very liberal by some, I agree that the estate tax is a form of double taxation and is totally unethical. People try to argue that inheritance concentrates wealth, when the opposite is true. Most wealthy people have multiple beneficiaries of their estates — multiple children, spouses, friends, charities, etc. The wealth goes from one person/entity to many; wealth is usually distributed from a single entity to multiple people/entities when a wealthy person dies, so wealth tends to be diluted — NOT concentrated — upon death/inheritance.
What DOES concentrate wealth is investment/passive income, especially when it is taxed at a lower rate than labor! It means that the wealthy will grow even more wealthy, and do so at a much faster rate than those who actually have to work for a living. It means that the wealth disparity will grow wider and wider at an ever-growing rate. There is absolutely no reasonable argument that could justify this lower taxation on investment income, IMHO.
Personally, I favor a steeply progressive income tax, and believe that ALL income (dividends, LT capital gains, etc.) should be taxed at the same rate or higher than income earned from wages.
That being said, I do have a problem with stepping-up the cost basis for certain inherited assets. You should either have to use the original cost basis, or pay estate taxes. One or the other, you shouldn’t have both.
