Estate taxes are the taxes the government places upon a person’s wealth after their death and before their decedents inherit it. I suggest that we increase estate taxes to 100%.
My grandparents are fairly wealthy and I stand to gain a substantial inheritance when they pass away. Why would someone like me who stands to gain significantly from lower estate taxes suggest abolishing inheritance and increasing estate taxes to 100%?
Many legal scholars, estate tax experts, and even Thomas Jefferson agree: inheritance of wealth beyond a few minimum areas is undemocratic and harms the free market economy. Inherited wealth tends to create oligarchies and aristocratic classes. Think of the nose in the air, uppity attitude about old money versus new money.
Old money is unearned and the people who get it generally do not contribute to society remotely as much as those who earn their own wealth. It is common knowledge that inheriting wealth harms those who inherit as it tends to set them up for an easy life where they never work hard and often end up dissolute and unhappy.
There would be certain exemptions – a spouse can inherit without tax, as well as parents or grandparents. Disabled children could inherit a larger amount. You could donate to charity without tax.
I suggest that we follow the Bill Gates model – those who earn a fortune in their lifetimes can use it as they like while they are alive, but anything left beyond a basic amount after death is taxed at 100% to fund the federal government. This would encourage self made wealthy individuals to allocate their wealth in ways good for society before they die… they would set up charities that do things like cure malaria like Gates has done. To prevent people from passing wealth each person should have a limit of wealth that can be transferred to them from all inheritance sources during their lives. Perhaps something like half a million dollars. This would cover both gift taxes (live parents giving money to children) and estate taxes (dead parents passing money to children).
The wealthy would be very happy about this because they would be treated far better by those around them who know that they must give away all of their wealth.
The children of the wealthy would be happier because most things that came to them in life would be earned. I think that you appreciate what you earn far more than what you are given.
The poor would be happy as wealth would no longer be locked up with the rich generation after generation and new opportunities for people to rise on merit would be created.
The political right would be happy as it would turn our country into a true meritocracy, and also greatly reduce the amount of money needed to be collected via income taxes or other tax sources.
The political left would be happy as this would create a true democracy where all people start on a much more level playing field. The enormous wealth currently locked up in several generations of the same family like the Rockefellers would be unlocked for all of society to benefit.