Since appreciated wealth is only taxed by an estate tax upon inheritance or by capital gains taxes upon sale, wealth that appreciates and is passed down from generation to generation is NEVER taxed until it is sold.

I can understand the rationale where objects are concerned (art, jewels, etc.), but income from savings and investment (which are also appreciated wealth, aren't they?) are taxed yearly as income, and real estate (in those areas where it is taxed) is reassessed from time time time, to account for appreciation. The Fed'l government may not tax it, but they taxed the income that bought it, and the income that paid the local taxes on it, every year. I just think it's wrong. I think it's double dipping. Essentially, you're penalizing heirs, because their parents sweated and saved, and invested wisely. If the parents had blown it all in Vegas, or kept it under the mattress, there'd be no tax.

Well, I see your point, but the estate tax only kicks in for the wealty (I think it only applies for a million dollars or more (eta: 1.5 million)). Also the estate tax was created (in the 1890's, IIRC, a time with a huge gap between the rich and the poor) in an attempt to prevent a wealthy "aristocracy" from coming to dominate the American economy.

Depending on where you live, the house your parents bought in the 60s for under 20,000 could be worth a half million or more, today--nothing fancy--a typical house. Their wealth didn't appreciate in any way that is meaningful to them, because it would also cost the same to replace the house (that is to say, they couldn't sell a half million dollar house, and buy another ~equal house for 20K, again). Prices rose all around.

This is the house they would have sweated over for 30 or 40 years. Add in a cabin in a vacationy town, and an acre Aunt Lucy left them, all of which they've been paying (local) taxes on for the entire time they've owned it, and these might be people who'd qualify as rich. They probably budgeted, and clipped coupons, and sweated their big bills for all those years. And now we tax it again, before they can hand it over to their kid.

Anyone with enough money to worry about it, is going to get around these taxes anyhow by establishing trusts, and life estates, etc. And it didn't really prevent a wealthy aristocracy from dominating the economy anyhow, did it?

I think the estate tax should be adjusted

There's certainly room to ask whether the trigger for the estate tax is set at the best level. But repeal? I have lots of problems with the idea that certain people should spend their lives on Easy Street because their great...[x whatever]...grandparents did well. I thought the American way was to work hard and get ahead. The idea that you make it because your ancestors were successful in time immemorial smacks too much of a hereditary nobility.

I also think capital gains tax is wrong.

I don't know how I'll fund Universal healthcare in my imaginary world, but there ya go. I don't actually have to be reasoned or consistent, because I'm just nattering on a posting board.

Dude, I want my parents' money. Okay, by the time they die (which will never happen, nosirree) I hope to have plenty of my own, but inheritance has always been a default assumption of western culture, hasn't it? I've inherited from their genes, their minds, their hearts. I figure their pockets can reasonably be mine too.

It doesn't mean I've made it. It just means I'll have it.

Hey -- if I inherit from another country, how would the taxing work?

(Cashmere, I think all this "FEAR ME" crap is a side effect of the Fifth Disease)

Not to revel in your pain, but Fifth Disease. Cracks. Me. Up.

Also, poor you.

I don't actually have to be reasoned or consistent, because I'm just nattering on a posting board.

Do you feel any compulsion to be reasoned or consistent in F2F discussions?

WHAT? This argument means you have to pay BOTH!

No, because the repeal of the estate tax would change the way capital gains are taxed.

Oh yay! Lucy crawled under my bed this morning and I was thinking of you. (My bed has about a foot of clearance, so not such a thing.)

It';s funny, Walter still has the habit of poking his nose out to see if we'll lift up the bed for him, even though he can easily get out on his own. But so much happier.

My thinking on the estate tax is mostly informed by a murder mystery I read (this applies to so much in my life). My understanding is that the basic idea is that the wealth/property/capital should be generating enough revenue to make the tax not much of a burden and if it isn't than the inheritors aren't fit stewards anyway. I kind of like this idea, but I am vaguely pro redistribution of wealth and understand that not everyone is, so I wouldn't argue that the estate tax is absolutely good. I will say that I like it. However, if it is repealed and that increases any net inheritance I may receive, I doubt I will refusing that extra money.

So, on balance, whatever.

Dude, I want my parents' money. Okay, by the time they die (which will never happen, nosirree) I hope to have plenty of my own, but inheritance has always been a default assumption of western culture, hasn't it?

Right, what's the point of building up an estate if you can't pass it along to your children?