>>>>>So, you are advocating for very high federal estate taxes that would take most of the wealth out of a family?
>>>>
>>>>I'm advocating for reasonable federal estate taxes with a high enough threshold that most families wouldn't be affected. I'd also like to see the threshold indexed for inflation.
>>>>
>>>>http://wills.about.com/od/understandingestatetaxes/a/historicalestatetaxchart.htm and wills.about.com/od/understandingestatetaxes/a/estatetaxchart.htm show that since it was enacted, both the threshold and the tax rate have varied. I haven't the time to see how the thresholds compare when corrected for inflation. The top rate shown of 77% seems high to me. I haven't really thought about what the right number is, but I think it probably should be comparable to the top income tax bracket.
>>>
>>>Why have any threshold at all?
>>>Why not just take the entire part of every estate?
>>>The owner is dead, he won't care.
>>
>>Because that's not the point. Pretty much every time money changes hands, we tax it. So when money changes hands from the deceased to the beneficiary, we should tax it. Like all other taxes, it should be reasonable.
>
>Remember, you were showing some agreement or sympathy for Bill's assertion that large estates are somehow bad and must be taxed away so that no family dynasties are formed.
>

I do think building an aristocracy is bad the for the country. What has made the US unique until recently is its social mobility, the fact that we weren't stuck at the same social level we were born into. All the studies I've seen say that social mobility in the US has declined a lot in the last few decades. That's harmful to the American Dream, both the reality of it and the dream part, the idea that an American kid (or, for that matter, an immigrant kid) believes that he or she can make it big and if he or she doesn't, his or her kids can.

>Estate tax is the second bite.
>The money was already taxed when earned.

Yeah, but if you use that money to pay someone else, it gets taxed again. Ditto if you give it away while you're alive. (There is a threshold for that. Last time I checked, you could give up to $14K to each person each year before gift tax kicks in.) Why should giving it away after you die be different?


>
>Why the fig leaf of the "high enough threshold?"
>So, the threshold is if the exemption is set high enough that you and your friends pay marginal or no tax?
>But those evil rich people will fork over the bulk of their estates?

I didn't say that; you did. I think the threshold should be set high enough that family farms and small businesses don't have to be broken up or sold to pay the tax. I also have never said that every dollar above the threshold should be taken in tax; that's you again. Seems to me that the tax rate for this should be pretty much the same as the income tax rate. Money passes from person to person, and it gets taxed.

Tamar