Taxes & Wealth Distribution

[Karma Police]

In the US, many studies indicate a growing disparity in wealth between the very rich and the poor. At the same time, many Americans believe the federal estate tax, which is imposed only on estates of more than $2 million or $4 million for a married couple, is unfair.

A very small group of the nation's wealthiest families has financed an aggressive campaign to repeal the estate tax, while some extremely wealthy Americans, such as the Gates family and Warren Buffett, strongly support the estate tax.

What do you think about imposing taxes on the ultra-wealthy in order to redistribute accumulated wealth? Should there be a limit to the amount of wealth that can be inherited?

[Adam]

Personally, I think that tax should be flat, no matter what. The only way to be fair is to charge everybody the same percentage from their income and drop the extra taxes. As far as corporate entities, their sales are their income, so if they pay taxes on their gross profits, they'll be equal with everybody else.

[Baltar]

Originally Posted by Karma Police

What do you think about imposing taxes on the ultra-wealthy in order to redistribute accumulated wealth? Should there be a limit to the amount of wealth that can be inherited?

A touchy subject, taxes are. I'm personally very pro-capitalism (not republican though, believe it or not) and of the opinion that an attitude like "tax the rich, give to the poor" or "tax the rich more because they have more" or "let's redistribute the wealth from the rich to the poor" is very bad. This is the kind of attitude that spawned Communist Russia. The reason the US is such a prosperous country is because we have a free market economy, and in theory everyone has a chance to get rich if they want to. Most of the time, people get rich because they create value and are then rewarded for it. I know that in practice things are more complicated, but I still believe that this is the best system. That said, it still is a mixed economy meaning that we have some social services (social security, medicare, welfare) which I think are fine as long as they're not abused.

But going back to your question -- the reality in the US is that most of the tax revenue is being paid by the middle class. This is despite the fact that the tax is progressive and the rich are in fact taxed more than the poor or middle class. The reason that middle class pays the most though is because there are way more of them than there are rich people. A large percentage of income taken from a small amount of rich people isn't going to help much, no matter how you cut it.

Most of what I said above actually refers to income taxes. Got a little carried a way there. As far as estate tax goes, that's a tricky issue. My opinion is that children shouldn't get too much money because it's just not healthy. People need to learn to make their own living. At the same time nobody wants to give money to the government so a compromise would be to make part of the estate get donated to charity. That's my take on it.

Originally Posted by Adam

Personally, I think that tax should be flat, no matter what. The only way to be fair is to charge everybody the same percentage from their income and drop the extra taxes.

As much as I'd love to see that myself, it ultimately wouldn't be practical. Poor people need to be taxed less because they have less money to spend on essentials like food, shelter, and medicine. But I do think that there should be a lower ceiling to the progressive tax than it is right now. The tax brackets as they are now go up to 35% in the US. A lower ceiling would be nice, but from looking at the alternatives I'm just happy that I don't live in the UK, New Zealand, or Australia. Switzerland seems to have the most favorable income tax system. I imagine if the US didn't spend (that is, waste) so much money on the military we'd have much lower taxes.

[Karma Police]

Thanks for your thoughtful replies!

Regarding income tax, we have something close to a "flat tax" for most people now. Although the top income tax bracket is nominally 35% or so, investment income and earned income above the wage base isn't subject to employment/self-employment taxes of about 12 to 15% (it's a little complicated because of the 2.9% medicare tax).

For example, a wage earner may only pay income tax of 18%, but must also bear employment tax (employer and employee parts) of about 15% on earned income, making the total tax rate approximately 33%, compared with 35% for ordinary investment income at the highest bracket or 15% for capital gains and dividends.

With that said, my main focus was on the estate tax. While I agree steep income tax rates create disincentives, the estate tax is a different story. A high estate tax rate isn't likely to cause anyone to change their date of death.

[Adam]

Actually, the strength of an economy depends on the movement of its currency. Many, many rich people move their money very effectively, but nobody can move a buck like the spend-happy lower-mid class. (I know, I'm there. )

As far as people in the lowest class who can't afford to pay rent and eat at the same time, I think that it is far past time to raise the minimum wage, split the nation into distinct regions (such as by county/parish) and set the minimum wage according to the actual cost of living... This should be done *every* year, and should be increase *at least* at the rate of inflation. With more poor people spending money, there is more money around to spend, which creates more opportunities for businesses to make a buck, which they then have to turn around and give to their employees, who spend all of their money yet again, bringing more and more liquid money into the economy, bringing stability, growth, and prosperity.

But, I suppose that's just a pipe dream... It's not like it wouldn't take more than a few months in legislative debate, then the stroke of a mature, honest president's pen to make something like this happen.

[Karma Police]

One other thing: There is a charitable deduction against the estate tax. So, you can always leave your fortune to charity instead of the government. In fact, the estate/gift taxes are significant incentives to give to charity.

[KevinG]

Originally Posted by Adam

Actually, the strength of an economy depends on the movement of its currency. Many, many rich people move their money very effectively, but nobody can move a buck like the spend-happy lower-mid class. (I know, I'm there. )

As far as people in the lowest class who can't afford to pay rent and eat at the same time, I think that it is far past time to raise the minimum wage, split the nation into distinct regions (such as by county/parish) and set the minimum wage according to the actual cost of living... This should be done *every* year, and should be increase *at least* at the rate of inflation. With more poor people spending money, there is more money around to spend, which creates more opportunities for businesses to make a buck, which they then have to turn around and give to their employees, who spend all of their money yet again, bringing more and more liquid money into the economy, bringing stability, growth, and prosperity.

But, I suppose that's just a pipe dream... It's not like it wouldn't take more than a few months in legislative debate, then the stroke of a mature, honest president's pen to make something like this happen.

If you took an economics class you would see that the minimum wage is one of the worst things that ever happened to Capitalism. It does nothing for this country, or any country except have a negative impact.

[KevinG]

Originally Posted by Karma Police

Thanks for your thoughtful replies!

Regarding income tax, we have something close to a "flat tax" for most people now. Although the top income tax bracket is nominally 35% or so, investment income and earned income above the wage base isn't subject to employment/self-employment taxes of about 12 to 15% (it's a little complicated because of the 2.9% medicare tax).

For example, a wage earner may only pay income tax of 18%, but must also bear employment tax (employer and employee parts) of about 15% on earned income, making the total tax rate approximately 33%, compared with 35% for ordinary investment income at the highest bracket or 15% for capital gains and dividends.

With that said, my main focus was on the estate tax. While I agree steep income tax rates create disincentives, the estate tax is a different story. A high estate tax rate isn't likely to cause anyone to change their date of death.

We are nowhere near a flat tax. Our tax code is so utterly complicated the IRS can't even follow it.

The top 5% of wage earners pay more than 80% of the tax burden. Fairness? I think not.

Our current tax code punishes achievement and promotes stagnation.

[Baltar]

Originally Posted by KevinG

The top 5% of wage earners pay more than 80% of the tax burden. Fairness? I think not. Our current tax code punishes achievement and promotes stagnation.

Actually, according to this data the top 5% pay between 53% and 57%. That's a large amount but certainly not 80% or more. What's even more disturbing though is that 50% of the population pays 96% of the federal tax revenue. I didn't realize there was such a huge gap developing between the wealthy and the poor in this country.

Originally Posted by Adam

As far as people in the lowest class who can't afford to pay rent and eat at the same time, I think that it is far past time to raise the minimum wage, split the nation into distinct regions (such as by county/parish) and set the minimum wage according to the actual cost of living...

States are allowed to set minimum wages that are higher than the federal amount (this was instated by Clinton). According to Wikipedia, 18 states and some counties and cities set their own minimum wages. But frankly I'm not sure if a minimum wage is really that necessary. In the area where I live, a cashier in a supermarket is paid $8-10 (or even more now) per hour. That's about twice the current minimum wage. Probably reflects high turnover, but also the fact that cost of living here in the NYC metro area is very high.

In a free market economy wages go up on their own if labor demand is not met, and in that sense a high minimum wage hurts the economy because it allows people to do low value work for disproportionately high wages. This means means higher overhead and thinner profit margins for the employer, or higher prices and inflation if the cost is transferred to the consumer. In that sense I agree with KevinG that minimum wage is not a good thing. But in the US the minimum wage is very low, so I don't think it hurts the economy.

[copla]

30% seems a rather high tax rate already at the top, I think the problem is more the tax loopholes corporations and individuals can jump through. Close the loopholes, keep the tax at 30%, and institute a flat tax below the top income to simplify the tax system. If you're at the top income you're probably business savvy enough to at least take a stab at doing your own taxes, for many lower income families it doesn't seem to make much sense to expect them to jump through the hoops to pay their taxes, when by the nature of their low income chances are they aren't very financially savvy to begin with. So flat tax below the top income level, 30% at the top level, then raise the estate tax... after all, the only time you won't mind paying taxes is after you're dead

As for the minimum wage, I like Jim Rohn's stance on it, and have adopted it as my own- there's a vast ladder in America, from an immigrant being paid dollars an hour under the table to CEO's being paid hundreds of millions a year. Anyone can climb that ladder if they are ambitious, disciplined, and pursuant of a personal education, so what's the use of a minimum wage? It's only useful if someone intends to stay at the minimum wage, in which case they aren't bringing much value to the market place to begin with.

[Trina]

Originally Posted by KevinG

If you took an economics class you would see that the minimum wage is one of the worst things that ever happened to Capitalism. It does nothing for this country, or any country except have a negative impact.

Can you explain what you mean?

[Doku]

Estate tax: Personally, I think that there should be zero estate tax. Reason? I earned the money. I paid the taxes on it. Why should my child have to pay taxes on it as well?

Minimum Wage: Evil. It creates an artificially stupid society. Society improves itsself by everyone trying to make their own situation better. That's what creates innovation/invention/... Let's take an example. If you HATED learning anything new, and the only job you could find with your skills paid $1 per hour, you'd learn a new damn skill and get another job. If, however, minimum wage was high enough that you could survive well enough doing that job, you'd never learn a new skill, never innovate, etc. thus creating a more stupid/complaicent society.

Tax rates: I'm all for a flat tax in the form of sales tax. That way, all share the pain. Example: you can afford, and want a $1k used car, and the tax is 10%, you pay $100 in taxes. On the other hand, if I want a $1M car, I would pay $100k in taxes. And the cool part is that the system for the collection of that tax is already in place. Another benefit of this is that most all Americans have a big problem with saving money... If they only pay taxes when they spend the money, then they will realize that the way to make money and avoid taxes is to save money.

[stephencp]

KarmaPolice,
But who gets to decide HOW we "redistribute" the wealth (i.e. who get what) and then how do we hand it out? Do you trust a faceless gov't of bureaucrats to do this well? I'd rather rely on churches and other charities and families.

Stephen
Power-Book Library: Free personal development, success, inspiration and motivational classics

[topher1181]

I would favor moving to a flat sales tax. I also favor raising the minimum wage, at least for full-time workers.

Someone pointed out that minimum wage workers should be working on new skills and that they aren't currently bringing much to the marketplace. But remember, not everyone wants the same things; maybe they just aren't interested in benefitting the marketplace anymore than the minimum requires them to in order to support themselves. There's nothing wrong with that, but they still need to make enough to live on - they are, afterall, providing value to the business and spending a significant amount of time working for them. The more well off our entire society is, the better off we all are.

[ahimel]

Originally Posted by Adam

As far as people in the lowest class who can't afford to pay rent and eat at the same time, I think that it is far past time to raise the minimum wage, split the nation into distinct regions (such as by county/parish) and set the minimum wage according to the actual cost of living... This should be done *every* year, and should be increase *at least* at the rate of inflation.
But, I suppose that's just a pipe dream... It's not like it wouldn't take more than a few months in legislative debate, then the stroke of a mature, honest president's pen to make something like this happen.

Is this a problem in Utah? In Colorado, no one gets paid minimum wage. It exists as a theoretical number, but you can't even get illegal immigrants to work for pay that low. So raising it wouldn't do a darned thing, except double the salary of all our government workers who get paid "X times minimum wage".

Not that these facts stopped us from raising it a couple weeks ago....

[gberardi]

Originally Posted by Doku

Estate tax: Personally, I think that there should be zero estate tax. Reason? I earned the money. I paid the taxes on it. Why should my child have to pay taxes on it as well?

Correct me if I am wrong, but you didn't pay taxes on what would get taxed when you die. The estate tax is like capital gains, only instead of being taxed when you sell your property, you are taxed because you died and the property is changing hands.

Is this not an accurate view of the estate tax? Because it doesn't sound like being taxed just for being dead, as the label "death tax" implies. It sounds like being taxed for giving away your property, a gift tax, only it is involuntarily.

Also, are you a member of the top 2% of the country that actually has to worry about the estate tax? Or is this another part I don't understand, that the estate tax affects more than just property worth more than a few million dollars?

As for income taxation, a flat tax wouldn't be "fair" since a dollar is worth more to someone who has less. $100 in taxes is a huge hit to someone on minimum wage, but $1000 isn't nearly as painful to someone who has millions. Is it punishing the rich? You can see it that way, but is the alternative to punish the poor for being poor earners? It's hard enough to raise yourself by your bootstraps. You don't need to be told that you now need to pay more because the rich are complaining about the fairness of a graduated tax.

But then, I am probably middle class financially, and maybe I just don't see it objectively enough.

[Brutha]

Originally Posted by stephencp

KarmaPolice,
But who gets to decide HOW we "redistribute" the wealth (i.e. who get what) and then how do we hand it out? Do you trust a faceless gov't of bureaucrats to do this well? I'd rather rely on churches and other charities and families.

Stephen

The proposed system is tax the rich more and the poor less.

Actually, the strength of an economy depends on the movement of its currency. Many, many rich people move their money very effectively, but nobody can move a buck like the spend-happy lower-mid class. (I know, I'm there. )

Why isn't the middle class also able to move their bucks like the lower middle class?
Why are the rich people able to move their bucks better than the middle class but not better than the lower middle class?

Estate tax: Personally, I think that there should be zero estate tax. Reason? I earned the money. I paid the taxes on it. Why should my child have to pay taxes on it as well?

The right question is: "Why should some people who have rich parents get money without working for it?"
The estage Tax is some sort of compromise, you get something which you didn't earn but not as much as when you would get the whole heritage.

Someone pointed out that minimum wage workers should be working on new skills and that they aren't currently bringing much to the marketplace. But remember, not everyone wants the same things; maybe they just aren't interested in benefitting the marketplace anymore than the minimum requires them to in order to support themselves.

Then they should get the skills that allow them do get the minimum requires.

There would be other possibilities like combined wages to ensure that the poor have enough money for the daily need and you still have a dynamic marktet.

[Karma Police]

"I personally think that society is responsible for a very significant percentage of what I've earned."

— Warren Buffett, CEO of Berkshire Hathaway

"Self-serving stories of 'self-made' success may nourish the ego, but they mask the real ingredients of wealth creation and a strong economy. Where would the Forbes 400 be without public investment and infrastructure – from Google founders building on the Internet to Ross Perot and government contracts?"

—Chuck Collins, co-founder of Responsible Wealth

ResponsibleWealth.org - Forbes 400 Richest Americans: They Didn't Do It Alone

Kevin G is correct that we don't have a flat tax and that our system is extraordinarily complex. I said "somewhat of a flat tax," because the following two features make the overall tax on income much less progressive than many people suggest: (i) application of employment/self-employment taxes primary to earnings of less than about $90,000, and (ii) 15% tax rate on capital gains and dividend income.

[KevinG]

Originally Posted by copla

30% seems a rather high tax rate already at the top, I think the problem is more the tax loopholes corporations and individuals can jump through.

Corporations don't pay taxes.

Close the loopholes, keep the tax at 30%, and institute a flat tax below the top income to simplify the tax system.

Flat tax is no better than the current system. You must repeal the 16th amendment in order to fix the tax code. Americans For Fair Taxation - FairTax.org

If you're at the top income you're probably business savvy enough to at least take a stab at doing your own taxes, for many lower income families it doesn't seem to make much sense to expect them to jump through the hoops to pay their taxes, when by the nature of their low income chances are they aren't very financially savvy to begin with. So flat tax below the top income level, 30% at the top level, then raise the estate tax... after all, the only time you won't mind paying taxes is after you're dead

Why should the rich pay more? They already pay the most, why should they pay an unfair percentage? Do you advocate punishing achievement?

As for the minimum wage, I like Jim Rohn's stance on it, and have adopted it as my own- there's a vast ladder in America, from an immigrant being paid dollars an hour under the table to CEO's being paid hundreds of millions a year. Anyone can climb that ladder if they are ambitious, disciplined, and pursuant of a personal education, so what's the use of a minimum wage? It's only useful if someone intends to stay at the minimum wage, in which case they aren't bringing much value to the market place to begin with.

The minimum wage hurts lower wage earners, it doesn't help them. It also raises the unemployment rate. Beyond that it increases prices and forces companies to outsource to other countries. The minimum wage kills economic growth.

[KevinG]

Originally Posted by Trina

Can you explain what you mean?

Yes Trina, I'm glad you asked. I actually did a podcast on this at my website.

here is the link to the podcast:

The Truth About Minimum Wage + Solution

[KevinG]

Originally Posted by topher1181

I would favor moving to a flat sales tax. I also favor raising the minimum wage, at least for full-time workers.

Someone pointed out that minimum wage workers should be working on new skills and that they aren't currently bringing much to the marketplace. But remember, not everyone wants the same things; maybe they just aren't interested in benefitting the marketplace anymore than the minimum requires them to in order to support themselves. There's nothing wrong with that, but they still need to make enough to live on - they are, afterall, providing value to the business and spending a significant amount of time working for them. The more well off our entire society is, the better off we all are.

So we should reward them for their laziness and lack of caring?

Absolutely unbelievable!

[Karma Police]

Originally Posted by KevinG

Corporations don't pay taxes.

KevinG, you're wrong about this. Also, taxation isn't about "punishing" people or certain types of behavior. It's about raising revenue, and the only way to raise money is to tax people who have it.

We're spending hundreds of billions in Iraq, and we're running massive budget deficits and creating unbelievable debt for future generations. You might think it's "fair" to make lower income people pay the same as the wealthy, but your theoretical position is useless if they don't have the money to pay.

Anyway, I feel this topic has gotten a little offtrack with all the discussion of income taxes. My real question was about the estate tax. The federal estate tax was originally enacted in the early 1900's to prevent a concentration of wealth and power that could threaten democracy.

According to the New York Times, about 1 in 325 US families has a net worth of more than $10 million. As a practical matter, the federal estate tax is largely inapplicable to families with less than about $10 million or so (because of exemptions and certain planning techniques used by tax and estate planning lawyers).

There's a point at which accumulation of wealth is no longer about taking care of your family or buying nice things--it's about power. Also, families that have accumulated billions have benefited greatly from the stability and infrastructure of modern government. I think that extreme disparities in wealth fuel distrust, radicalism, and instability. In my view, the estate tax, properly applied, is a useful check on the establishment of a permanent aristocratic ruling class and a pressure valve that promotes long-term political and economic stability.

[KevinG]

Originally Posted by Karma Police

KevinG, you're wrong about this.

No, I'm most certainly not. Corporations do not pay taxes.

If you can prove me wrong I ask you to go for it.

Also, taxation isn't about "punishing" people or certain types of behavior. It's about raising revenue, and the only way to raise money is to tax people who have it.

It isn't about punishing people, but it does punish people. Intentions vs. results. You may not have the intention that you will hurt someone physically when you drive but driving can certainly result in hurting someone.

We're spending hundreds of billions in Iraq, and we're running massive budget deficits and creating unbelievable debt for future generations. You might think it's "fair" to make lower income people pay the same as the wealthy, but your theoretical position is useless if they don't have the money to pay.

If you understand percentages you will understand that nobody wants the poor to pay the same as the rich, they simply want them to pay the same percentage. That's fair.

Anyway, I feel this topic has gotten a little offtrack with all the discussion of income taxes. My real question was about the estate tax. The federal estate tax was originally enacted in the early 1900's to prevent a concentration of wealth and power that could threaten democracy.

The estate tax is government-organized theft, plain and simple.

According to the New York Times, about 1 in 325 US families has a net worth of more than $10 million. As a practical matter, the federal estate tax is largely inapplicable to families with less than about $10 million or so (because of exemptions and certain planning techniques used by tax and estate planning lawyers).

You understand that the when the estate tax isn't applicable to a person they simply get hit with the death tax right? When you die the government finds a way to tax you no matter what. It is all government-sponsored theft. It is double or triple taxation. If the estate tax is really for what you said it's for then what's the death tax for?

There's a point at which accumulation of wealth is no longer about taking care of your family or buying nice things--it's about power.

Go ahead, tell us how evil the rich are.

Also, families that have accumulated billions have benefited greatly from the stability and infrastructure of modern government. I think that extreme disparities in wealth fuel distrust, radicalism, and instability. In my view, the estate tax, properly applied, is a useful check on the establishment of a permanent aristocratic ruling class and a pressure valve that promotes long-term political and economic stability.

If you believe this you are not in agreement with the basis of America and Capitalism.

[copla]

Originally Posted by KevinG

Why should the rich pay more? They already pay the most, why should they pay an unfair percentage? Do you advocate punishing achievement?

Well, what I'm saying is lower it 5% from 35 to 30%, but only have that at the HIGHEST income. Not as a punishment, but as a way of giving you the utmost opportunity on your way up. If you're able to pay less taxes as you are building your fortune, working your way up the income ladder, that makes it all the more easier for you in that time period. Then, once you arrive at your goal, you pay more to even out not having to pay as high of taxes on your way up. I don't believe you should punish achievement at all, but rather that if for the few people in this world who DO want to improve their circumstances and are WILLING to put the work in, for them less taxes would allow them to save more, which would allow them to take advantage of more unique opportunities that come their way. That lower flat rate at the bottom needs to be evened out somehow, though, and if you're making enough to be in the top tax rate it won't hurt your prospects or ability to take advantage of YOUR unique opportunities much at all.

The minimum wage hurts lower wage earners, it doesn't help them. It also raises the unemployment rate. Beyond that it increases prices and forces companies to outsource to other countries. The minimum wage kills economic growth.

Couldn't agree more.

[copla]

Originally Posted by KevinG

You understand that the when the estate tax isn't applicable to a person they simply get hit with the death tax right? When you die the government finds a way to tax you no matter what. It is all government-sponsored theft. It is double or triple taxation. If the estate tax is really for what you said it's for then what's the death tax for?

Why not increase the death tax/estate tax and then lower tax rates while you're living?

[KevinG]

Originally Posted by copla

Why not increase the death tax/estate tax and then lower tax rates while you're living?

Because the death and estate taxes are double or triple taxation - or more sometimes.

[KevinG]

Originally Posted by copla

Well, what I'm saying is lower it 5% from 35 to 30%, but only have that at the HIGHEST income. Not as a punishment, but as a way of giving you the utmost opportunity on your way up. If you're able to pay less taxes as you are building your fortune, working your way up the income ladder, that makes it all the more easier for you in that time period. Then, once you arrive at your goal, you pay more to even out not having to pay as high of taxes on your way up. I don't believe you should punish achievement at all, but rather that if for the few people in this world who DO want to improve their circumstances and are WILLING to put the work in, for them less taxes would allow them to save more, which would allow them to take advantage of more unique opportunities that come their way. That lower flat rate at the bottom needs to be evened out somehow, though, and if you're making enough to be in the top tax rate it won't hurt your prospects or ability to take advantage of YOUR unique opportunities much at all.

What you are saying looks fabulous on paper. However, it isn't taxes that is holding poor people back, it is education, culture, parenting, and effort.

You could have poor people pay zero in taxes and they'd still be poor ten years down the line. You could have lower middle class people pay zero in taxes and they'd still be lower middle class ten years down the line. The problem isn't their tax bill or their wages, the problem is their lack of understanding on how to improve their situation.

The majority of Americans live in a certain class their entire life. A minority of Americans move through different classes. Adjusting tax structure to benefit them isn't going to solve anything.

[Karma Police]

Originally Posted by KevinG

No, I'm most certainly not. Corporations do not pay taxes.

If you can prove me wrong I ask you to go for it.

If you understand percentages you will understand that nobody wants the poor to pay the same as the rich, they simply want them to pay the same percentage. That's fair.

You understand that the when the estate tax isn't applicable to a person they simply get hit with the death tax right?

1. "A tax is hereby imposed for each taxable year on the taxable income of every corporation." Section 11, Internal Revenue Code. (I hope you're not trying to play word games with me.)

2. Many lower income wage earners are effectively taxed at a combined rate of more than 30% (income and employment taxes). I can tell you from personal knowledge that many wealthy taxpayers pay a lower effective rate. For example, capital gains are taxed at a rate of only 15%, which in many cases can be deferred almost indefinitely (or avoided completely if the property is owned at death).

3. There's no such thing as a separate "death tax" that applies in lieu of the estate tax. Estate tax opponents call it the "death tax" for rhetorical purposes.

4. I never said the rich are evil. If you want to debate what I said, that's fine, but why do you need to mischaracterize my arguments?

5. Reasoned argument is more persuasive than hyperbole, like "government-organized theft."

6. I don't care whether you think I'm "in agreement with the basis of America or capitalism." State your position or opinion, but please don't characterize me or my beliefs. By the way, many American capitalists, like Warren Buffett, agree with me.

[KevinG]

Originally Posted by Karma Police

1. "A tax is hereby imposed for each taxable year on the taxable income of every corporation." Section 11, Internal Revenue Code. (I hope you're not trying to play word games with me.)

I am playing word games with you; because the government is playing games with us all.

Corporations don't pay taxes because they have the power of pricing. Consumers pay taxes, corporations don't.

I did a podcast on it and the extensive importance of this knowledge:

Listen...

2. Many lower income wage earners are effectively taxed at a combined rate of more than 30% (income and employment taxes). I can tell you from personal knowledge that many wealthy taxpayers pay a lower effective rate. For example, capital gains are taxed at a rate of only 15%, which in many cases can be deferred almost indefinitely (or avoided completely if the property is owned at death).

There should be no capital gains tax anyway. Why in the world would you punish achievement and economic investment like this?

3. There's no such thing as a separate "death tax" that applies in lieu of the estate tax. Estate tax opponents call it the "death tax" for rhetorical purposes.

It was a botched joke and a prelude to the fact that the death tax effects a lot more of us than people claim it does. And the fact still remains that it tramples all over inheritance rights. Karl Marx would be proud.

4. I never said the rich are evil. If you want to debate what I said, that's fine, but why do you need to mischaracterize my arguments?

5. Reasoned argument is more persuasive than hyperbole, like "government-organized theft."

Was I inaccurate in that assessment?

6. I don't care whether you think I'm "in agreement with the basis of America or capitalism." State your position or opinion, but please don't characterize me or my beliefs. By the way, many American capitalists, like Warren Buffett, agree with me.

Because Warren Buffett has so much money he doesn't care who takes it. In fact, he likes to give it away, something the people pushing for the death tax don't like to do (statistically conservatives donate far more money to charity than liberals).

[gberardi]

Originally Posted by KevinG

It was a botched joke and a prelude to the fact that the death tax effects a lot more of us than people claim it does. And the fact still remains that it tramples all over inheritance rights. Karl Marx would be proud.

Can you point me to info that states how many actually get hit with the estate/death tax? The number I keep hearing is the top 1-2% of all Americans. If the "death" tax affects a lot more than people claim, then someone has to be able to claim otherwise, but I haven't found any statistics.

And the idea of being taxed multiple times is addressed at Estate tax (United States) - Wikipedia, the free encyclopedia

Originally Posted by Wikipedia

Some argue that the estate tax creates a potential for double and triple taxation, that is, taxation on assets which have already been taxed. Double taxation occurs on earned income, and by imposing capital gains tax on the returns after earned income is reinvested in new ventures, stocks, bonds,and savings. However, the capital gains on those reinvested proceeds have never been taxed in the first place, because the income tax system does not recognize income until the asset (here a share of stock) is sold or transferred. Without the estate tax, the alternative is to treat the transfer of ownership of the stock at death as a sale and impose the capital gains tax then. In this manner, the estate tax would not be seen as an additional tax, but the first tax upon the unrealized capital gains.

I don't know if you missed it above, but no one addressed my argument against the claim that taxes had already been paid and shouldn't have to be double-taxed.

You can argue against capital gains or the gift tax, but then I think eventually you will just be arguing against any tax.