Morning ERD,
You're apparently assuming that profits on estate assets have already been taxed. That would have to depend on the assets of an estate. If they're real estate or bonds or stocks or an art collection, the profits on any gains of those assets may well not have been taxed.
I guess by some logic you could say that taxes should be paid on the assets of a deceased member of a partnership. ...
Agree somewhat - To be more in line with "equal" (I won't get into "fair", and even "equal" is fuzzy due to the complexity of tax code), if there is no estate tax then property should have its cost basis carried forward. That would tend towards making a death a non-event relative to taxation.
It's another topic that we've discussed before, but I don't like capital gains taxes either. I think I said in this thread, when you tax a single event that can carry a high price tag, there is added motivation to be "creative". And cap gains can require records going back to who knows when. Then the issue that the cap gains may have never exceeded inflation, yet they get taxed as a 'gain', largely independent of inflation. There are some super-crude attempts at leveling this out with long term gains, which I take as an acknowledgement of the problem, but a grossly poor "solution". Maybe someone can find a link to that thread, I can't recall key words that would bring it up right now.
Would I characterize the spouse exemption as hypocrisy? It's certainly not anymore hypocritical than advocating for tax cuts and fiscal prudence with borrowed money.
Getting rid of a bunch of convoluted tax code is independent of how much tax we collect. That is a separate discussion. For the sake of this discussion, let's assume a tax neutral approach - those (largely evaded) Estate Tax dollars could be collected in other ways. So no hypocrisy there - try again.
Not gonna look it up now, but what is it, a single % of tax collections? Not too hard to shift to something else. Eliminate a few of the mistakes/bribe-pay-offs*(see note) that Congress has made.
It would be interesting to find out how many dollars are spent each year by people trying to avoid paying this tax. There seems to be a large supply of firms who specialize in this process. A lot of lawyers and accountants and insurance people are making a lot of money helping people dodge this tax, they sure don't want to see it go away. And that's just more money that isn't going towards the deficit. I'd like to see that brain power go to productive, value added work.
*NOTE: I've decided to try to refrain from using or recognizing the word "loopholes" as it is applied to our laws. The term seems to let Congress off the hook for responsibility for the law that they wrote. They either made a mistake by not covering all the bases, or they intentionally left an out for a supporter. Thats incompetence and graft, and "loophole" is too mushy a word for it. I'm taking the same approach with the term "unintended consequences". There are only "consequences", and it was their job to consider the consequences. The term is OK if the consequences were
really unforeseeable, but that's not the case 99% of the time.
-ERD50