I enjoy the work of Cactus at Angry Bear, and often like to work in tandem, so that I follow up on Commentary on the gist of his argument. He presently has a good Work on Estate taxes. I have often considered the Subject, and still find our current system approaches the Estate problem from the wrong side. We think to tax the Estate, when We should instead tax the heirs. Why tax an Individual who has already been taxed on his assets?
The real thing to due is first give every American a Freebie, or some set amount of inheritance(whether in Cash or assets) which he can receive gratis. Thereafter a progressive taxation will be exacted from any and every heir. The method of taxation can be easily determined by any Estate owner, as can knowledge of non-taxed bequeath still allowed to any heir. The distinction between Gift and bequest disappears by act of law, and the Estate owner can determine for himself the best distribution of his paternity. He who has aggregated the Estate awards the distribution as is his right.
What have We done in the economic sense? We have left the property right of possession in the hands of the rightful Possessor. We have eliminated the complexity of Gift awards, Trusts, and various other Instruments from the realm of Estate Planning, as all find lack of need for such careful planning to avoid taxation. We have leveled the Playing Field for All, actually expanding the field of heirs, as Estate owners determine for themselves the amount of taxation they would have the heirs pay; naturally inducing an expansion of the heir field. Economic power can only be transferred from one Generation to Another only under the duress of proper taxation to level the Expenses of all economic enterprise. No one’s rights have been violated, and Estate Ownership has achieved permanent value. lgl