The idea of increasing the federal estate tax and devoting its revenues to the Social Security trust funds must be gaining support since the National Review has an editorial out opposing the idea. They oppose it because that alone won't solve Social Security's long term financing issues. The thing is that in the same piece, the National Review supports increasing full retirement age and reducing the cost of living adjustment. Those proposals, either singly or in combination, don't solve the long term financing issues either.
They also try arguing that increasing the estate tax punishes successful Americans but that's ridiculous. An estate tax reduces inheritances for the survivors of wealthy Americans, not the wealthy Americans themselves. The wealthy Americans may have been successful or maybe they just inherited wealth themselves but their survivors aren't inheriting money because of their own success.
The estate tax is imposed on the deceased's estate, not the survivors, so it does technically punish the successful people...posthumously though, so I do not believe they would be particularly upset by it. I have more of an issue with the article assuming those who are eligible for the estate tax where themselves successful, as opposed to inheriting their wealth as well.
ReplyDeleteNot that I disagree with the estate tax. If anything, I think inheritance should be treated like income, and some durational limit should be placed on estates requiring disbursement within a certain time frame to prevent the deceased's assets from just trickling out at a low level in order to avoid taxation.