We have a gift tax for gifts given above $13,000 a year. Why should a transfer of an inheritance be taxed differently than gifts?
Since I have to pay taxes on income that I earn on a job, it would be unfair that someone who is given money should be exempt from paying taxes on it.
The idea that you should be exempt from a tax because the money has “already been taxed” is a silly argument that can be applied to any tax. Why should I pay sales tax since I already paid income tax on the money I’m spending? My employer already paid income tax on the money he’s paying me, so why should I pay income tax on it again? Why should I pay a property tax since I already paid income tax on the money I bought the house with? You could exempt any tax you want with that argument. It’s meaningless.
I’m for abolishing the estate tax as long as you abolish the income tax along with it. Treating those two forms of income differently makes no sense at all and is grossly unfair to those who earned their income instead of being given it. Nobody likes paying taxes, but the taxes we do pay ought to be fair without putting extra burden on certain people. I’m in favor of tax cuts and lower taxes, but whatever taxes we are paying should be flat and applied equally to everybody.
It shouldn't. Gifts should not be taxed, either.
whatever taxes we are paying should be flat and applied equally to everybody
That's a good principle, but in practice, no tax is going to affect everyone equally.
Actually, I don't really think a gift should be taxed either, but thats another issue.
If the inheritance is cash, then it can easily be taxed at whatever rate you choose. The problem is when the inheritance is something not easily divided like a farm or a business. If you have to take out a loan to pay the tax, you may be pushed into bankruptcy if you could even get a loan in the first place. Its not automatic that you'll be able to get the loan in the first place. If you have to sell the farm or the business to pay the tax, then the point of the inheritance is destroyed.
Of course, a large piece of property you may have to sit on a couple of years until it sells, so even that may not save you as you're no doubt incurring penalties and interest as you try to sell it.
Thats the problem with an inheritance tax on anything other than cash, at least from my point of view.