The Importance of a Graduated Inheritance Tax
posted by Frank Pasquale
Bernie Sanders makes some valuable points in The Nation this week:
The 400 richest families in America, who saw their wealth increase by some $400 billion during the Bush years, have now accumulated $1.27 trillion in wealth. . . . During the last fifteen years, while these enormously rich people became much richer their effective tax rates were slashed almost in half. While the highest-paid 400 Americans had an average income of $345 million in 2007. . . they now pay an effective tax rate of 16.6 percent, the lowest on record.
Last year, the top twenty-five hedge fund managers made a combined $25 billion but because of tax policy their lobbyists helped write, they pay a lower effective tax rate than many teachers, nurses and police officers. As a result of tax havens in the Cayman Islands, Bermuda and elsewhere, the wealthy and large corporations are evading some $100 billion a year in U.S. taxes.
Whatever our nation’s tax future, these are vital facts to consider during the debate. Sanders has proposed the “Responsible Estate Tax Act (S.3533),” which would “raise $318 billion over the next decade by establishing a graduated inheritance tax on estates over $3.5 million.” Deficit hawks should applaud his approach.
July 23, 2010 at 6:48 pm
Posted in: Economic Analysis of Law, Tax
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Responses (6)
Maryland Conservatarian - July 26, 2010 at 1:57 pm
Senator Sanders has no idea how much his proposal would raise in tax receipts because he has no idea how people will respond to it (i.e. – increase in charitable foundations).
While I think making any tax retroactive (in this instance, for 2010) is generally a bad idea, I’d be more amenable to this if we really made it retroactive and grabbed the wealth that allowed the likes of Jay Rockefeller, Ted Kennedy and John Kerry to avoid creating wealth themselves but instead allowed them the luxury to wreak havoc on those who seek to do so.
ParatrooperJJ - July 27, 2010 at 9:25 am
Your quoting a socialist to make points in favor of the estate tax in fact accrues points to the side of abolishing it.
Patrick S. O'Donnell - July 28, 2010 at 10:35 am
ParatrooperJJ:
Thanks for providing us with a textbook example of (fallacious) circumstantial ad hominem reasoning.
ParatrooperJJ - July 28, 2010 at 2:54 pm
Hardly, one of the basic planks of the socialist movement is redistribution of wealth.
Patrick S. O'Donnell - July 28, 2010 at 3:16 pm
Now you’re being obtuse…or simply don’t understand what makes for a circumstantial ad hominem argument.
And your latest comment, in repeating the fallay, likewise fails to explain why one should abolish the estate tax: simply because democratic socialists believe in a more egalitarian distribution of wealth? You’ve compounded your error with the stench of a red herring.
It seems prudence has dictated you post with a pseudonym.
Patrick S. O'Donnell - July 28, 2010 at 3:19 pm
erratum: fallacy
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