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But taxes on inheritance and investment are totally regressive (and have become even more regressive), which undermines the benefits of a progressive system for

by danhak 11y ago

But taxes on inheritance and investment are totally regressive (and have become even more regressive), which undermines the benefits of a progressive system for earned income.

zo1 11y ago
There are arguably much more "regressive" things out there, that are completely avoidable. Inheritance tax, on the other hand, usually has a "lower-bound" that prevents the very poor from being affected. Taxes on investment? You mean, capital gains? Or something like dividends?
throw_away 11y ago
I don't understand how estate and capital gains taxes are regressive. Estate taxes (in the United States at least) only kick in on inherited assets > $5M or so (< 0.2% of estates). Capital gains are AFAIK assessed as normal income for short-term gains (so, progressive) and as a flat (neither progressive nor regressive) rate for long-term gains, and even then, only for people with actual investments, which excludes probably the majority of the poor. When I think regressive taxes, I think things that are flat fees, or else things like fica, which cut out after a certain income.
- danhak 11y ago
  Regressive in the general sense--privileging those who already have access to wealth. The long term capital gains rate is a good example.
  - zo1 11y ago
    They are progressive by their implementations, and by the definition of the word progressive. What it sounds like you are trying to say is that it's not "progressive" enough for your liking. And then you turn the definitions upside down and label it "regressive".
dvanduzer 11y ago
Taxes on inheritance are not regressive when you include a sensible floor. Current US Policy places the floor so this tax only affects families somewhere in the upper 1-10% of wealth. Taxes on investment are complex. Considering the fact that most humans do not have anything approaching a real investment portfolio, it's hard to understand what you could mean when you say this kind of tax is regressive. A properly progressive income tax should mean that more people can join the investment class. If the taxation within the investment class is actually regressive, then maybe we worry about that when the majority of humans have this problem.
mamon 11y ago
Inherited wealth shouldn't be taxed at all: the testator has already payed the taxes when he was earning all those money he left. Taxing it again is just plain robbery.
- digbyloftus 11y ago
  All taxation is already robbery. That doesn't get taken in to account when deciding what to tax and at what rate for any other source, I fail to see why inherited wealth should be the exception.
- ryandrake 11y ago
  If you're worried about "double taxation" I've got some bad news for you: That money was taxed many, many, many times before. When it was earned through labor? Taxed. When it was spent in a store? Taxed. When the store owner made an investment in a company? Taxed. When that company issued a dividend? Taxed. "Taxing it again" is the normal state of things.

by danhak 11y ago

But taxes on inheritance and investment are totally regressive (and have become even more regressive), which undermines the benefits of a progressive system for earned income.

zo1 11y ago

There are arguably much more "regressive" things out there, that are completely avoidable. Inheritance tax, on the other hand, usually has a "lower-bound" that prevents the very poor from being affected. Taxes on investment? You mean, capital gains? Or something like dividends?

throw_away 11y ago

I don't understand how estate and capital gains taxes are regressive. Estate taxes (in the United States at least) only kick in on inherited assets > $5M or so (< 0.2% of estates). Capital gains are AFAIK assessed as normal income for short-term gains (so, progressive) and as a flat (neither progressive nor regressive) rate for long-term gains, and even then, only for people with actual investments, which excludes probably the majority of the poor. When I think regressive taxes, I think things that are flat fees, or else things like fica, which cut out after a certain income.

danhak 11y ago
Regressive in the general sense--privileging those who already have access to wealth. The long term capital gains rate is a good example.
- zo1 11y ago
  They are progressive by their implementations, and by the definition of the word progressive. What it sounds like you are trying to say is that it's not "progressive" enough for your liking. And then you turn the definitions upside down and label it "regressive".

dvanduzer 11y ago

Taxes on inheritance are not regressive when you include a sensible floor. Current US Policy places the floor so this tax only affects families somewhere in the upper 1-10% of wealth. Taxes on investment are complex. Considering the fact that most humans do not have anything approaching a real investment portfolio, it's hard to understand what you could mean when you say this kind of tax is regressive. A properly progressive income tax should mean that more people can join the investment class. If the taxation within the investment class is actually regressive, then maybe we worry about that when the majority of humans have this problem.

mamon 11y ago

Inherited wealth shouldn't be taxed at all: the testator has already payed the taxes when he was earning all those money he left. Taxing it again is just plain robbery.

digbyloftus 11y ago
All taxation is already robbery. That doesn't get taken in to account when deciding what to tax and at what rate for any other source, I fail to see why inherited wealth should be the exception.
ryandrake 11y ago
If you're worried about "double taxation" I've got some bad news for you: That money was taxed many, many, many times before. When it was earned through labor? Taxed. When it was spent in a store? Taxed. When the store owner made an investment in a company? Taxed. When that company issued a dividend? Taxed. "Taxing it again" is the normal state of things.