So, I know I’m super uber liberal and everything, but I don’t get why the estate tax is supposed to be such a good thing.
I mean, yes, I know it was championed by TR (my all time favorite president), I know it’s our most “progressive” tax, I know the people who support eliminating it are super-rich and mostly reprehensible. And I do believe that the wealthy should undertake a greater share of the tax burden overall.
But here’s what I don’t get: haven’t people already paid tax on that money? Wouldn’t it be both more practical and more just to tax earned income and accruing interest more heavily in the upper tax brackets to begin with?
Added to that, according to NPR, the estate tax has never produced more than 1-2% of federal revenues. And according to the Huffington Post the Democratic alternative is “only a little more irresponsible” than the proposed plan, the difference between $33 billion (Dems) and $68 billion (Reps & Obama)–small change when you’re talking Federal budget.
Finally, the current plan (the one Obama negotiated), basically just raises the threshold for paying estate tax from $1 million to $5 million. This doesn’t strike me as all that nuts. Remember, this isn’t just a tax on liquid assets–it’s the entire estate. If you own a small business, a car or two, and a house, your estate can get up close to the $1 million mark pretty fast. Some kinds of life insurance are also taxable under the estate tax, which can easily throw an estate over that threshold.
A $1 million baseline hits the upper middle class, not just the wealthiest 1% of the entire country. Of course, I personally think we’d be pretty safe with a threshold of $2 million instead of $5–but in any case, this is hardly the thing to go to bat over when the >$250k income tax is on the line.
But I still love Bernie Sanders.