True Grit Farms":1mhgt7sv said:
Why should anyone's estate pay the government anything? Everything they have acquired has been taxed a few times already. Acquiring wealth shouldn't mean you have to pay more in taxes to the government. I'm the government and I do not feel like anyone owes me anything. And if I ever could accumulate $22 million in assets I sure wouldn't want my heirs to have to pay estate taxes on it. It seems un American to me to treat people different because they have more or less than I do.
You're ignoring the problem of the stepped-up basis:
"[A] policy reason for the estate tax: Without it, inheritance becomes a mass tax-avoidance scheme. While the owners were living, their assets piled up capital gains. If they'd sold them while they were alive, they'd have to pay taxes on those gains. But when people die, the estate system does something called "stepping up the basis" of those assets, which in plain English, means that the assets are revalued to today's price, so that when the heirs sell them, they only have to pay the difference between the asset's value when they inherited, and the asset's value when they sell."
https://www.bloomberg.com/view/articles ... estate-tax
Anyone want to do away with the stepped-up basis? The gains have NOT yet been taxed when they are transferred to the decedent's beneficiaries.
To recap: I inherit Acme stock worth 22 million (dear God, please). My dear departed pappy paid 10 million for it, and it appreciated in value over the years. He didn't turn a single shovel-full of dirt for that $12 mil increase in value, just let it sit from 2007-2016. He wasn't out milking cows for it, or building fence, or cutting timber, or mining coal. Not only did he not put in labor to achieve the increased value, he'd discovered the original $10 mil in the walls of his hunting shack back in the woods--put there by an amigo of Capone who was a rum-runner, but forgot where he put it. (Too much rum).
So, when pap recently departed this mortal coil for his eternal reward, I, as his sole beneficiary (if you don't count all those illegit kids--and I don't), receive stock worth $22mil. No tax was ever paid on the appreciation in value from $10mil to $22mil. (Had he sold it while living, it would have been taxable). Now, not only did he never have to pay tax on the $12 mil gain, but when I inherit the stock, I get it at a "stepped up basis"--meaning it's as-if I paid $22mil for it--the value at his death. I can sell it the next day and owe no capital gains tax. (Nor, as previously noted, is any estate tax due, $22mil being the new cap for marrieds).
In effectively doing away with the estate tax, we're not preventing that 12mil from being double-taxed; we're preventing it from ever being taxed at all. If one is a tax nihilist or anarchist and believes none of us should ever have to pay a dime in taxes, this would seem a fair outcome. But given that we rather like to have roads and bridges and occasional (ok, frequent) wars, and bridges to nowhere, and meals on wheels, we have to pay for those things. And cutting out the estate tax puts a higher burden on people who did not just earn $22mil without doing a thing to earn it, other than genetically being at the right place at the right time.