Thursday, December 16, 2010

"Progressives" wish for higher tax rates

Joseph Thorndike at the HuffPo today about the estate tax:

It's much easier to raise a tax than create one. When revenue needs make tax hikes unavoidable, the estate tax will still be on the books, blessed with a remarkably low rate just begging to be raised.
Notice the term "revenue needs?" If the government keeps spending like it is, then of course we'll have justification for raising taxes. In this case, the estate tax.

The rate set for 2011 is 55 percent over $1 million. The Dems wanted 55 percent over $5 million. The new tax "deal" sets it at 35 percent over $10 million. That's remarkably low, according to Thorndike. I think not.

So let's say I've amassed a $15 million dollar estate, with earnings, dividends, or other investments that I've made over my life, which have already been taxed.

Under the current law for 2011, my estate would pay $7.7 million in taxes. Under the Dem-preferred plan, the tax bill would be $5.5 million. In both these cases, if my estate were tied up in real estate (family property), or a small farm, or a business, my heirs would most likely have to sell. Under the proposed rate, my estate would pay $1.75 million, which is still a lot of money, but may not be catastrophe.

What is even more frightening is the thinking process of many people, like this reader:

If we gave one million dollars to every adult in the country, within a few years the same people would be broke and the same people would be in possession of most of that money. Since some do not save or plan for the future, we need to take away the accumulate­d wealth of those that did not waste their resources.
Punish success, reward failure. This is what they must teach nowadays in our school systems. It will be the downfall of the American way.

1 comment:

Jim said...

If it has already been taxed then it shouldn't be taxed at all. Worse cas tax all estate at no more than 10%