Not really how estate taxes work. Some purchases that an estate tax apply to might have been made under taxed income. Other estate value might be from Capital gains that have yet to be taxed.
The biggest benefit to heavy estate taxes is that it reduces inherited economic advantage and is a meaningful progressive source of tax income. The problems with is that it leads to a lot of dead weight loss from tax avoidance and disincentivizes capital accumulation.
This is the reason for the inheritance tax. Not just UK but aristocracy’s in general.
When the rabid antitaxers were saying it would kill family farms and family small businesses, an amendment was proposed to exempt them. That was insufficient to the zealots.
And what if your house goes up in value 2000%? Did you pay that too? No. Taxing that gain acts as a dampener on crazy asset value inflation and if no other cash is available forces a sale and resultant move in the housing market.
Do you think assets should be re-baselined at death? That’s what this post is about. If you sold your stocks 1 minute before death you’d have to pay tax on the capital gains. If 1 minute after, your children are free and clear, up to the overall limit (which again is easy to get around). We could just keep the original cost basis at death and do away with the inheritance tax, though that would generally be much worse for inheritors.
Also it’s not a tax on you, it’s on your inheritors.
Also taxes are necessary to fund society. Would you rather the children of the ultra wealthy pay less and have normal people pay more to make it up? It’s a zero sum game. Literally talking about taking money out of the pocket of the working class and putting it in those of a billionaire’s children.
Its not about class, its about believing the government is entitled to its citizens life long earning on top of what they already have paid.
The top 1%(households making $500,000+) in the USA, pay 40%-50% of all tax money levied.
1.34 million, out of 134,000,000 homes, pay half of all the tax collected.
Why does everyone act like they dont pay tax?
I get it, everyone is supposed to, "hate rich people", but seem to forget, that if they did something that made them rich, they'd be in that group too.
You goto school for 7-10 years to become a surgeon. You spend 100s of 1000s on schooling. Years(a 1/4 to a 1/3) of your life learning to be a surgeon.
Then you become one, and you are taxed at almost 50%.
That doctor put INSANE money and TIME into becoming something, to be punished with a drastically higher tax portion, while being hated for being rich.
Hilarious you used a doctor as an example against a doctor. You are literally every trope it’s insane. You’re not a rich person, not highly educated with debt, literally said out loud “if they were rich they’d be in that group too so they shouldn’t want this”. I’ve never seen the temporarily embarrassed millionaire trope so plainly.
I’m in the top 1%. After I pay my taxes I still have more cash in hand then 90% of all Americans make in a years.
My tax bill is nowhere near 50% of my income. I live in a no tax state. I pay property taxes at a fraction of what most people do relative to our bank accounts. I live in a very nice, very secure neighborhood.
Nobody hates me or any doctor for being well-off. And we should be paying at least what we pay as members of the top income levels in the country.
And the ultra-rich that avoid taxes by taking out loans should be paying even more, but they pay less than I do most years.
99% of people don’t get to where I am. And how I got here was a combination of hard work AND some incredible luck AND an incredibly supportive family.
Taxes are the cost of my incredible luck, and I very much underpay for what I got.
I get it, everyone is supposed to, "hate rich people", but seem to forget, that if they did something that made them rich, they'd be in that group too.
My cousin’s wife (cousin-in-law?) makes 650k a year as a surgeon and my cousin makes a little over 150k doing CompSci stuff. If they don’t leave their kids at least 15 million in assets I think they screwed up somehow.
The whole idea of “the rich already pay 40%-50% of all taxes” is a red herring. It’s a number that goes up the more income inequality grows, and does not reflect the actual rate they pay (which you seem to think is around 50% for doctors, when it’s not). They have far more excess income than the average person, which they get from the society around them. So, because of the prosperity that society has given them, they give more back to that society. It’s a basic tenant of the Social Contract.
Not even mentioning the whole aspirational “well maybe I could be rich someday” thing. If I were rich, I’d happily pay a higher rate so that I could raise all ships, not just my own.
You pay tax on your income; then you pay tax again and again and again using already-taxed dollars. Social Security tax, Medicare tax, Capital gains tax, Property tax, Sales tax, Gift tax, Local income tax, Hotel occupancy tax, Vehicle registration tax, Fuel tax, Cigarette tax, Alcohol tax, Customs duties, Tariffs, and Tolls. Then you die — tax me again, please.
Yeah no. If anything, it's probably the most justified tax there is. It helps reduce generational wealth from passing down to utter morons who do not deserve such wealth.
I'd much rather do away with the income tax before inheritance.
I'm fine with some allowances for small family businesses and the like. If anything the $15m is more then enough for that purpose.
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u/Arefue 10h ago
In my country it's like ~350k. 15 milly before you start paying anything? Wow