We aren't taxing rich people. The rich people are dead.
We are taxing their poor heirs, who just lost a loved one, and now watch as half their loved one's worldly posessions are taken by the government.
Hmmmm.....maybe the children should have to earn their own money.
If all fortunes were earned, wealthy people would be much more likely to be conservatives, since they would have to understand how the world really works in order to become successful. This would cut down on the Kennedys and Rockefellers.
That might be the best brief summation of the estate tax that I've seen.
Perhaps this will be enough of an eye opener to really get the ball rolling on the FairTax...
Not only that, the "rich people" who happen to die early, who are being hit by big taxes aren't really rich. Many in the middle class are being hit with the death tax (just like the AMT - I have to figure out my taxes two ways). Modest homes are worth $500K-$1000K in many places. Combine that with a reasonable retirement nest-egg ($1 to $1.5 million, it is prudent to have sufficient savings to be able to sustain your lifestyle with a 4% to 5% annual withdrawal, = $40K-$75K from the nest-egg), you're there.
People have been inflated into being rich! Just like the inflation after the big bang, middle class drones are being redefined as the "super rich" who are subject to excessive taxation, and common derision.
I'm there (3-5 years from retirement), many of my (most assuredly, middle class) colleges are there - and I'm certainly not rich. Modest 2000 sq. ft. home, 6 year old car, no yacht (not even a boat), no second vacation home, no housekeeper, pinch pennies to invest, do my own laundry, worry about gas prices, shop at Wal-Mart. What was it, 10 years ago that the "Millionaire Next Door" was published? Since then 20% (pure speculation - but including me) more of the population has been "inflated" into this class.
My state takes a big bite (which by the way, is no longer a deduction from the federal take - it used to be), and the feds will take a big bite, certainly if the old tax rates come back (2012 is is? - $1M exemption, 55% of the remainder - as well as 5-15% state tax, on the gross). My premature death (and many other middle class worker bees) will be a windfall for the tax men (soak the rich, indeed)!
It took my husband & I 20 years to pay off his inheritence taxes @ $10k per year. His mother worked HARD and we work hard to pay our bills.