Progressive Taxation Act (Failed)

[bgwah]

I've decided to be a coward and abstain.

[Bacon King]

Nay.

[Gustaf]

The United States has an exemption up to $5 million. After that it's a 35% flat rate. A relatively high exemption is fine with me (though more like $2-3 million) but I want the 15% and 25% bracket rates increased. A top rate of 50% is fine though.

These are the two bills that started the estate tax and expanded it. It could answer some of your questions.

https://uselectionatlas.org/AFEWIKI/index.php/Tax_Increase_Act
https://uselectionatlas.org/AFEWIKI/index.php/Estate_Tax_Reform_Act

But what's the point? Why not have a ceiling on percentage of income if you're worried about poor people?

[Gustaf]

Oh, wait, you can ignore most of what I said I misunderstood something here. But I'm still confused.

[Gustaf]

I was confused largely because this tax doesn't even exist in Sweden.

Please tell me that you're at least applying the same tax rate to gifts?

Anyway, an estate tax is a bit of a silly tax. I'd probably remove it if I were in charge. And why do Americans love insanely complex tax systems? I guess employing tax lawyers is something you get off on?

[Franzl]

Anyway, an estate tax is a bit of a silly tax. I'd probably remove it if I were in charge. And why do Americans love insanely complex tax systems? I guess employing tax lawyers is something you get off on?

Most likely because every senator/congressman wants a piece of the pie to buy his vote for certain things....and getting his own little pet project put into the tax code is what it takes.

Add up hundreds of that type of thing.....and that's where you get extremely complex tax systems.

[Gustaf]

Anyway, an estate tax is a bit of a silly tax. I'd probably remove it if I were in charge. And why do Americans love insanely complex tax systems? I guess employing tax lawyers is something you get off on?

Most likely because every senator/congressman wants a piece of the pie to buy his vote for certain things....and getting his own little pet project put into the tax code is what it takes.

Add up hundreds of that type of thing.....and that's where you get extremely complex tax systems.

Obviously I have no reason to really learn the details of the American tax system, but every time I for some reason get to know a little part of it I'm aghast. It clearly needs a major overhaul. And in Atlasia it shouldn't really be that hard.

[Badger]

I was confused largely because this tax doesn't even exist in Sweden.

Please tell me that you're at least applying the same tax rate to gifts?

Anyway, an estate tax is a bit of a silly tax. I'd probably remove it if I were in charge. And why do Americans love insanely complex tax systems? I guess employing tax lawyers is something you get off on?

There are taxes on "gifts", though again there are exempted amounts that can be transferred as gifts without taxation.

The idea behind an estate tax is sound enough, especially from a fiscal standpoint. The number of estates it effected even before the Bush tax cuts was decidedly modest, and truly hit only the very, very wealthiest, and not even particularly hard after legal deductions and exemptions were included.

The concept is simple meritocracy: Rather than let the Paris Hilton's of the world collect vast fortunes tax free they should pay a portion of that to support the same society that allowed that fortune to grow and multiply. Better to support such things as well-funded public education to allow the next generation of millionaires and billionaires to rise and prosper than create a tax structure that rewards old money to simply pass from generation to generation.

Not to mention that among the options for raising whatever taxes are needed, an estate tax is among the most defensible economically or otherwise. Notwithstanding the mantra of paying for tax cuts with "decreasing wasteful government spending", whatever level of government spending is appropriate--be it $1 Trillion or $1 Billion annually--on what basis should such taxes be collected more from the middle class instead of an estate tax to relieve the middle class tax burden? The fact is eliminating or reducing an estate tax paid by the very very wealthy ultimately requires either additional taxes paid by the middle class or more government debt incurred for the next generation.

[Gustaf]

I was confused largely because this tax doesn't even exist in Sweden.

Please tell me that you're at least applying the same tax rate to gifts?

Anyway, an estate tax is a bit of a silly tax. I'd probably remove it if I were in charge. And why do Americans love insanely complex tax systems? I guess employing tax lawyers is something you get off on?

There are taxes on "gifts", though again there are exempted amounts that can be transferred as gifts without taxation.

The idea behind an estate tax is sound enough, especially from a fiscal standpoint. The number of estates it effected even before the Bush tax cuts was decidedly modest, and truly hit only the very, very wealthiest, and not even particularly hard after legal deductions and exemptions were included.

The concept is simple meritocracy: Rather than let the Paris Hilton's of the world collect vast fortunes tax free they should pay a portion of that to support the same society that allowed that fortune to grow and multiply. Better to support such things as well-funded public education to allow the next generation of millionaires and billionaires to rise and prosper than create a tax structure that rewards old money to simply pass from generation to generation.

Not to mention that among the options for raising whatever taxes are needed, an estate tax is among the most defensible economically or otherwise. Notwithstanding the mantra of paying for tax cuts with "decreasing wasteful government spending", whatever level of government spending is appropriate--be it $1 Trillion or $1 Billion annually--on what basis should such taxes be collected more from the middle class instead of an estate tax to relieve the middle class tax burden? The fact is eliminating or reducing an estate tax paid by the very very wealthy ultimately requires either additional taxes paid by the middle class or more government debt incurred for the next generation.

That's not necessarily true. You can just increase the top marginal tax rate on income. Or, if you so want, have a wealth tax (even though that has problems of it own that are somewhat similar).

Sweden takes in twice as much as the US (as % of GDP) without an estate tax, so I think it is probably doable.

I also have to say that I doubt whether such a tax contributes very much. It's the kind of tax that tends to finance its own removal.

[Gustaf]

As an addition to everything else: the meritocratic argument, while sympathetic, seems a bit silly to me. Last time I checked Paris Hilton had not inherited a dime, for instance.

Most of the advantages enjoyed by the children of the rich have no real relation to inheritance, in the technical sense. Especially given normal life expectancies. A typical person will likely inherit their parents when he/she is about to retire.

[tpfkaw]

As an addition to everything else: the meritocratic argument, while sympathetic, seems a bit silly to me. Last time I checked Paris Hilton had not inherited a dime, for instance.

Indeed, IIRC she was actually disinherited by her grandfather for her antics.

[Gustaf]

As an addition to everything else: the meritocratic argument, while sympathetic, seems a bit silly to me. Last time I checked Paris Hilton had not inherited a dime, for instance.

Indeed, IIRC she was actually disinherited by her grandfather for her antics.

He has said that he will leave 97% of his wealth to some charity. Another funny difference between Sweden and the US there - here it is illegal to disinherit people, oddly enough.

[Franzl]

here it is illegal to disinherit people, oddly enough.

You mean it's impossible to determine where your money and estate will go after you die? Or at least strongly restricted?

[Ban my account ffs!]

This bill has failed.

Aye:  Leif, Antonio
Nay:  BaconKing, Snowguy, NCY, DallasFan, HappyWarrior
Abstain:  Bgwah, Eraserhead (not voting)

Senators, you have 24 hours to change your vote.

[Gustaf]

here it is illegal to disinherit people, oddly enough.

You mean it's impossible to determine where your money and estate will go after you die? Or at least strongly restricted?

As I recall, half is determined and half can be distributed freely. So you can't disinherit someone (although you can reduce their inheritance by up to 50%).