The estate tax doesn't tax the first $5,000,000 of an estate. After that, the rate is 35%.
It's a tax on the one percent. The vast, vast majority of Americans will never be bothered by it.
It's a tax on the one percent. The vast, vast majority of Americans will never be bothered by it.
Furthermore, this exemption can currently be used as a lifetime gift-tax exemption rather than an estate tax exemption, which allows large estates to transfer assets to heirs and use the extra years to undergo compound accumulation of assets instead of exposing a larger sum to estate taxes in the future.
An estimated 52 500 returns will pay estate taxes in 2013.
(52000 / 142823000) * 100 ~= 0.036
You're right. It's not a tax on the "one percent", it's a tax on the "one-third of one-percent"
http://www.census.gov/compendia/statab/cats/federal_govt_fin...
http://www.taxpolicycenter.org/briefing-book/key-elements/es...
I believe the tax only effects the money over $1,000,000, you can also gift $14k/year tax free to each individual. I would expect that you really would need to have something along the lines of 1.5million in hard assets to even have to do much in the lines of tax planning, and using irrevocable trusts I'm fairly certain you can avoid taxes to a much higher number than that.
Maybe i'm living outside of reality but i don't understand why we can't have a single flat sales tax. The more you spend the more you pay. For some reason people think that just because you make more means you should pay a higher %, ofc you should pay more, but a higher % is the complete definition of unfair.
I am by NO means wealthy lol, but if i had more money i know i would definitely be spending it lol.
People who come into wealth quickly seem to spend money quickly (athletes and lotto winners come to mind, hell even Willie Nelson went bankrupt at one point). People who earn wealth more slowly tend to end up investing their money and saving a larger percentage. If you make 300k/year, you could save 25% without blinking an eye, not so much if you earn 30k/year, especially if you have a dependent.
This doesn't mean it's a good idea, or a bad idea, but very progressive places have used them without the world ending. It's probably a good way to keep spending in check, because it makes it a lot harder to jack up someone else's taxes to pay for your stuff.
(And while they do tax their rich more than America taxes its rich, the shape of the slope is nowhere what you would imagine. It's very rare for any marginal rate to get over 50%.)
And some in favor of progressive taxation: - Letting the lowest earners keep their money can be cheaper than taking it and then giving it back through inefficient social services - Tax cuts on low earners translate to increased spending better than tax cuts on high earners
Regarding fairness, how is it fair that one person is born to wealthy parents and inherits $5 million while another inherits nothing, but unfair to set tax rates based on income?