by Outcast_Searcher » Sat 04 Dec 2010, 23:19:11
$this->bbcode_second_pass_quote('Ludi', '
')People who would prefer not to live in feudal states should be in favor of estate taxes as the purpose of them is to try to avoid a wealthy gentry class.
Ludi, this seems like the only legitimate use of the estate tax to me, considering (stupid and exemption-filled as they are), income taxes have been levied on rich persons' incomes already, all their lives.
I didn't see anything on this thread about the likely compromise many think is likely to be reached (source - recent hardcopy WSJ artices) -- roughly a $3.5 million exemption per estate, and a 45% rate (this is the most common set of numbers I see -- I saw an alternative of a $5.5 million exemption and a 35% rate on CSPAN as a possible alternative yesterday). This is what I saw Warren Buffett propose on CSPAN a couple years ago, and seems like a "reasonable" compromise to me (BUT, it lets the wealthy gentry class live on).
SO:
What I'm surprised at is that I don't see a proposed multi-rate proposal which would let people keep family farms and small businesses built over a lifetime of work, but heavily tax the deci-millionaires' and expecially billionaires' estates to keep super-rich families from passing on their (unearned) wealth for many generations. (Thus ENDING the long-term gentry class / family dynasties).
So you could have something like the $3.5 million exemption, and index that to inflation. Then you could have an initial estate tax rate of something like 30% up to say $10 million. Then you could have a moderate rate of something like 50% up to say $25 million -- or to $X million per family member, or something.
ALL of this needs to be indexed to inflation, by the way. Then you could have a really high rate to prevent the passing along of MAJOR unearned wealth -- something like say 90%.
I'm sure the entire GOP will be screaming at me for this, but IF you coupled this with a fairly low/reasonable federal income tax rate on ALL income (say no more than 25% with only a standard $40,000 or $50,000 standard deduction, indexed to inflation) -- it would make the whole system simpler, fairer, and FAR more comprehensible. It would also prevent dynasties like the Kennedy's for persisting for more than 2 (or at most 3) generations on unearned wealth.
It would make the IRS's life so simple that they could actually spend time going after the major tax cheats and complex business tax audits.
And, it would eliminate the need for giant herds of lawyers and tax preparers -- always a good thing, IMO.
I would hope this could be a compromise that most fair minded people, right or left, could live with.
But, given the political reality we live in -- let the flames begin.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.