Regarding the GOP views on estate tax, and that "everything has already been taxed"?

If you wish to look at it as income then do so, BUT inheritance tax is higher than the highest tax rate!

The Left doesn't like the fact that the RICH inheritor may do nothing for his income. So they create a new group that will do nothing for society the poor entitled. Damn aren't we smart.

We used to have a good notion in this country that the rich should be taxed heavily and really heavily at some trigger point thresholds. Our tax systems used to be very very progressive..all the way up to even 91%. From 1936 to 1981 the top marginal tax rate was never below 70%.

We also used to have an estate tax that taxed the wealth of the wealthy. All these ideas sent a message that even though we loved capitalism and wanted people to be rich and do well, we also understand that there is such a thing as too rich...because too rich also means that you can use your money to control govt and the rest of the country.

We need to get back to the type of progressive tax system we had in the 1960's in my opinion...where the top tax rate could be as high as 74% or even 81% for any dollar earned over $ 5 million dollars a year. Any dollar earned over $750,0000 a year should be taxed at 45% and any dollar earned over $2 million should be taxed at 55% etc....

Large estates of over $5 million dollars should be taxed at 15% flat.

We could have a special national health care tax where everyon pays 1.5% of their income towards it....with no cut off for higher income earners so that those who make the most pay the most into it but all share equally.

The state and local taxes should be reduced as they tend to be more regressive.

Some states have no income tax and only have like a 10% sales tax plus real estate taxes etc.. Well this is actually great for the richest income earners of that state but bad for the middle class and the lower income earners as someone making $500,000 a year pays the same taxes as someone making $50,000 a year.

The flaw in your logic is simple. It only applies to one source of income and presupposes that the bulk of your wealth was achieved through this one source which was never taxed. Sorry real life doesn't work like that. We do acquire real assets as we move through life and we do pay taxes on them as they are a acquired. All assets in your estate are taxed at the same enormous rate at the time of your death regardless of the method of accumulation or previous taxes paid. The simple fact is that your argument is no stronger than that which you are trying to argue against and ignores facts which don't fit the conclusion you wish to present.

brown9500v2: And I would have no problem with a normal rate of income tax being imposed on inheritance, but this is not what the government does. The inheritance tax rate is far greater than the income tax rate.

Your argument is sound, but many people may not realize that under section 1014 of the Internal Revenue Code, on the day you die all of your appreciated assets get a basis "step up," meaning that any built-in capital gains vanish.

The answer above mine is completely incorrect. The estate does not owe capital gains tax because of section 1014 of the tax code: "the basis of property in the hands of a person acquiring the property from a decedent . . . if not sold before the decedent's death . . . shall be the fair market value of the property at the date of the decedent's death."

Example.

I buy Microsoft in 1991 at $3; by the time I die in 2040, it is worth a split-adjusted $100.

If I leave the stock to my heirs and they sell it the very next day, they get $100 per share, only $3 of which has ever been taxed. 97% of the value of the stock would be taken tax-free.

Perhaps, but I'm shooting for 100% since I believe that all men are created equal rather than the left who feels that that 99%, of which I am a member, is somehow special. Taxes? Fine. Then let's all pitch in.

But a bigger crime than the taxes is the spending. Barry has spent trillions that the government, funded for the most part by a minority of Americans, does not have. As Reagan once said, "It is not that the people are taxed too little, but that the government spends too much." Do folks like you see no limits? Is no irresponsibility beyond your sanction?

When you die your estate pays an "Estate" tax.

this is where your stocks would be sold and added to the pile of money you leave behind. The estate is now taxed on the total value of the money... (7 million)

This is the FIRST TAX.....

But WAIT....

You estate will have to pay income tax for the year that you died in...

So this is where you will pay the Capital Gains on the stock. As this will be reported as a realized gain (Income) for the current tax year (Year that you died)

SECOND TAX....

The pile of money that is left after paying your debts is then split among your beneficiaries ... Now each person who gets money will have to pay an Inheritance TAX

TAX NUMBER THREE!!! A

So far these are just federal Taxes...

Many states also get Estate and inheritance taxes and take money from the pile Before your survivors get anything...

(Tax number four and five)

EDIT

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My point is that in this particular case, what you say is not true. If my dad gives me a share of stock when he dies, that's not income for me and I am not taxed upon receipt of it.

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Yes its income and yes you are taxed on it. But the difference here is WHEN.. which is determined by when you sell the stock. (So you can hold it for years before selling it and paying taxes)

The stock will have a stepped value based upon the date of death. Lets say $10/share Now you are given the stock..

If that stock increases in value (>$10/sh)you will have to pay long term capital gains on the increase in value.

If that stock loses value (<$10/Sh) then you can use the "Loss" to offset any other long term stock gains that you have.

Stepped value is determined at the date of death but you may want to establish the actual cost basis of the gifted stock

as there may be a tax advantage relating to your long term gain tax. This would happen if the original owner paid more for the stock ($15/sh) than what it was worth at the time of their death($10/sh). In this case your stock you received worth at the time of death at $10/sh would have to gain to be worth more than $15/sh before you pay capital gains..

OK sounds great, there will be one final "alive" style tax return where the poor, dead schlub gets to pay tax on owned stocks that have yet to be sold (paying tax requires cash that isn't there since the stocks aren't sold but I'm sure you didn't think that through). Now, after those taxes are paid, will you then support ending the insidious estate tax, where already-taxed property is taxed once more so deadbeats can get one more cut of a productive person's property?

"The GOP has pointed out that letting a tax cut expire is like a tax increase. Thus, the opposite must be true: not having to pay a tax that you previously were subject to, is exactly like a tax cut."

In logic, no axiom proves that just because one thing is true that its opposite is true. This is flawed reasoning, and is quite common. Burden of proof is on you to actually prove it is true.

Just because A -> B it does not mean that B -> A.

I have a farm. My two son and their families live on it and work the land too. It is valued a 10 million dollars because of the acreage. The equipment another 250K the buildings another 750K. I owe nothing to any bank.

I die in a horrific accident.

One farmer dead and the farm is lost to the tax man getting 50% of it value. My family gets to choose buy the Taxes for something they help make what is today a thriving family farm. I owe zero on the farm I die they owe 2.5 million to keep it something we made.

Uncle sam taxed the money used to buy the dirt, the fences and the animals.Uncle Sam taxed the money used to pull tree stumps for more farm land yet he taxed me for the fuel for the equipment and it increased value. We paid taxes on the money we save and sacrificed to buy the tractors, we paid taxes on the tractor we bought when we bought them too.

We built the buildings and homes, again with taxed money then we were taxes on the materials and the got taxed on its increased property value every year.

Double Jeopardy is against the law except when it comes to taxes. You get taxed when you make it and when you spend it. If you save it and die Uncle Sam gets half of what you saved.

Suppose I play poker with my brother who just payed his taxes.

I beat his pants off and win all of his money.

Do I not have to pay taxes on my winnings because he already payed them once?

If the money changes hands, it becomes someone else's income. The fact that it is the same family is not an issue