If you exceed the inheritance tax exemption then you are taxed on the $10k so LTCG would be double taxing. You could argue that the inheritance tax should have a much lower exemption but double taxation is harder to justify.
Bullshit. "Double taxation" is such a weak argument to me.
When I buy gas at the pump it's taxed multiple times. State sales tax. City sales tax. Federal gas taxes. State gas taxes. Quadruple tax on me there.
My wage income has several taxes. FICA taxes. Payroll taxes. Federal income taxes. Potentially state income taxes. Potentially city income taxes.
When I pay for a hotel there's often a bevy of different taxes on that. When I pay my phone bill there's a bunch of different taxes on that. Even getting a drink at a bar there's a sales tax and a liquor tax.
And all of that is on money I've already paid all those several income taxes on, so it's really all just stacking there.
Oh but boo hoo ultra wealthy get their massive inheritance "double taxed". Get bent crying over your "double taxed", I'm quadruple taxed and more all the damn time. Weak argument.
But like, why? It's a worthless point. If there were five taxes of one percent each versus one tax of 20% how is the one tax somehow better? Which one would you choose, getting taxed five times or once?
It doesn't really matter that there's a FICA and an income tax and a payroll tax in the end, what really matters is the overall tax rate and if that's fair given some moral decision of fairness of sharing costs of society.
If a city chooses to levy sales taxes and hotel taxes to capture more revenue from visitors because their town is a tourist destination and want to collect from tourists more than locals that's fine. I won't weep a tear for those getting "double taxed" on their vacations.
Local and state taxes generally actually help you. Your local infrastructure is maintained, and your kids go to schools funded by your taxes.
Federal taxes, however, are largely transfer payments from the productive to the unproductive, as well as funding wars in areas that have absolutely nothing to do with you.
It's pretty easy to make the distinction between "good" and "bad" taxes.
>> If there were five taxes of one percent each versus one tax of 20% how is the one tax somehow better?
Would you rather pay five different tax authorities a 1% tax each or a single tax authority 20%? Not asking about the morality of those five tax authorities, in this example they're all the same.
The argument is against this idea "double taxation" is something inherently wrong. In the end it's not a matter of how many different taxes actually apply to a given transaction, what matters is the tax amounts and where those taxes are going to.
I'm generally helped by my federal taxes going to help feed students in poor areas. Both from a feel good standpoint and that those students have a better chance at becoming more productive, which means they can buy stuff from me.
I also benefit from those foreign wars because they keep the US empire of cheap shipping open, so I can buy stuff for cheap from countries who've specialized in manufacturing
Payroll tax is a problem because it’s not accounted for in your overall tax rate, it’s accounted for via lower wages. So you have no idea what your actual income would be if not for all the taxes your employer is paying.
> So you have no idea what your actual income would be
Payroll taxes aren't some secret things which are impossible for an employee to calculate on their own. You're right, it's not usually directly shown to an employee on their paystub, but it's pretty trivial to do the math and see what your employer paid (or was at least originally liable before any weird tax handouts, but typically rare) for your salary.
I do think payroll taxes should be required to include on paystubs if even just as an informational aspect to people. People should have a real understanding of how much labor is taxed compared to capital. People see "capital gains is 15%? Gosh that seems high..." without realizing how much of their W2 income was taxed. Most people I talk to can't even ballpark what their effective income tax rate was, I often hear "oh I had to pay like $800 in taxes this year, that sucked!" No, you paid a lot more than that, you just didn't pay attention.
You're right, its pretty common for the wealthy to try and trick poor people into feeling sorry for the wealthy actually paying taxes on things.
As my other post pointed out, tons of things have multiple layers of taxes. But the things people suddenly have some big moral issue with "double taxation" are things like estate taxes and corporate earnings and dividends and capital gains.
Few people bat an eye at us double taxing the low income nicotine addict. Everyone seems to want me to shed tears for the billionaire having to pay "double taxation" on their third vacation mansion they're inheriting.
Argue the rates are too low or too high for a given transaction. I can get behind that. But just crying because there's two different taxes being applied to a given transaction? Really?
> People get plenty mad about sales taxes double taxing taxed income, too.
Yeah, and it's a dumb position to take. Like what, we can only apply one tax from one source to a given dollar bill's serial number after it leaves the fed, and after that point that dollar can never be taxed again? Otherwise, gasp, double taxation!
The company shouldn't pay payroll taxes, they charged sales taxes to get that income to pay the salaries. I shouldn't pay any income taxes, the company paid payroll taxes on the money that had sales taxes on it. I shouldn't pay sales taxes, I paid income taxes on the money that had already had payroll taxes that had already had sales taxes that had...
Suddenly nobody pays any taxes anywhere because somewhere up the chain someone else already paid taxes on that dollar!
