Re:Why Inequality Matters
by danielweber on Thursday October 16, 2014 @11:54AM
(#8465560)
> An estate worth $5M, which is then taxed at 40%,
That's not how the estate tax works. The first $5 million (or so) is not taxed.
> where you're expected to pay for your own education, health care, and retirement
You can pay for your kids' education directly, no estate tax involved. You can put significant amount of money into 529 savings accounts for your kids and your grandkids, effectively increasing estate tax limitations if (like most upper class) education is a place where you will expend significant resources.
Re:Why Inequality Matters
by brandonmenc on Thursday October 16, 2014 @12:36PM
(#8465834)
You're right, the first ~$5M is an exemption, and not taxed by the Federal government. My mistake.
expected to pay for your own education, health care, and retirement
In much of Europe the first two and a good chunk of the third are largely provided as public goods. Establishing a reliable "floor" standard in all three makes it much easier for people to truly stand on their own merits rather than being handicapped by parental poverty.
An estate worth $5M, which is then taxed at 40%, the remainder of which is distributed amongst any number of heirs, each of whom may then be obligated to pay an additional income tax on that - ends up being far less.
Especially in a country where you're expected to pay for your own education, health care, and retirement.