Ancestors

Toot

Written by David Chisnall (Now with 50% more sarcasm!) on 2025-01-22 at 10:14

Whenever inheritance tax comes up, there's always an argument that it's double taxation: you paid tax when you earned the income and you then pay it again when you die. I'd always nodded along with this because, even if I disagree that it's a bad thing, it seemed to be at least a real thing. But is it?

Most people pay tax on their money when they make it, so this seems like a sensible thing to claim. But how many people who have enough money to trigger the inheritance tax level made that money through work rather than investments? Investments are not taxed as they go up in value, only when you sell them. What would happen if we treated death as a realisation event for the purpose of capital gains tax and made any increase in value taxable at that point?

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Descendants

Written by Albert Cardona on 2025-01-22 at 10:30

@david_chisnall

VAT is double taxation, and a regressive one, since it impacts low-income families far more than high-income ones.

Inheritance tax favours the rich, because the poor have little to bequeath; the rich setup trusts and insurance schemes to circumvent it; and the middle class, who spends income into purchasing their home, then is punished for it.

What is needed:

(1) Delete VAT: it's absurd and hurts those with less means.

(2) Reform inheritance tax: no inheritance tax on at least one's home. Needs work to figure out details to keep it fair and sensible.

(3) Tax capital gains like income. Because it is income, just of the passive kind.

(4) Setup high tax for high income, like 90% for income above half a million or so. The prevent-billionaires tax bracket.

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Written by Alex Schroeder on 2025-01-22 at 10:40

@albertcardona @david_chisnall I like the current initiative being prepared in Switzerland: the inheritance tax to come into play over 50M.

https://iniziativa-per-il-futuro.ch/ (Italian)

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Written by ben on 2025-01-22 at 10:37

@david_chisnall It seems to me that "you pay it again when you die" isn't actually the case. Because you can't: you're dead. Your heirs pay it: which then puts it firmly in the category of your heirs paying tax when they receive the income.

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Written by Peter Ludemann on 2025-01-22 at 12:21

@david_chisnall That's more or less how Canada does it .... there's no inheritance tax but there is a final income tax as if all assets were sold.

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Written by Njord on 2025-01-22 at 12:27

@david_chisnall IMO, with a few exceptions (like working farms) Inheritance tax should be 100% on anything over say 50X the median annual income

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Written by Eric Bower on 2025-01-22 at 18:00

@david_chisnall I like the thinking, but I think there's a bigger issue -- at least in the US.

Unrealized gains are not taxable -- for good reason -- and yet can be leveraged into getting a loan -- which isn't taxed and can be used for anything.

We are blinded by the idea of taxing income when we really need to figure out how to fairly tax unrealized but leveraged gains. Want a take out a loan that leverages unrealized gains? Pay 30% upfront sent to the gov.

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Written by Jeremy on 2025-01-24 at 01:12

@david_chisnall

Inheritance is a detriment to functioning society. Wealthy ppl ruin everything. I propose a 110% inheritance tax. Even without the inherited property and wealth, kids of the wealthy still benefit enormously from superior healthcare, nutrition, education, cultural experience, travel, etc.

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