Quote Originally Posted by Psycho4Bud
Why is the family farm a thing of the past? Nice to inherit a place that has been bought and paid for in cash and blood to see that you now owe 28% on it. What about that family that worked and put away money in company stocks? So much for that lil' extra in the retirement fund. Capital gains tax hits EVERYONE, some more than others.

The rich will find a loop-hole to hide the transfer of property, to bad that the middle class don't have that luxury.

Have a good one!:s4:
Didn't the article say that the inheritance tax would exempt $7 million? Are family farms and small businesses very often worth much more than that?

I don't think the capital gains tax should be any different than the regular income tax. Why should income from working at a job be taxed higher than income from buying and selling stocks and property at a profit? Why should income from interest on money at the bank or credit union be taxed higher than stock dividends? Seems like that is kind of screwing people who have to work for their money and only have enough in savings for a bank account, not stocks. I don't think a person should get a break just because they are well off enough to make money owning stocks or property instead of working at a job and collecting a wage. It's all income, so it should be taxed at the same rate. If the rates were the same for different kinds of income, all the rates could be lower, and benefit everyone evenly. Republicans are all about simplifying the tax code until it comes to breaks for rich folks, then it's just fine to have special tiers for different types of income.

Quote Originally Posted by FlyGuyOU
I know of a lot of people who are poor and have investments. its stuff like 401k's
Things like 401ks and IRAs are taxed at the higher income tax rates, like wage income, not the lower capital gains rates. So yeah, a poor person might have stocks in a 401k, and when he starts taking money out he'll pay taxes on it at his regular income tax rate (probably around 25%, but maybe as high as 30% or 33%), while a rich person who has the exact same stocks in a non-retirement stock portfolio will only pay 15% max. It they are didvidend-earning stocks, the 401k guy pays the income tax rate, while the portfolie guy pays zero on the dividends. The 401ks and IRAs have tax advantages on the front end, so they are a good deal, and the reason thay are taxed as regular income is that they can include many different kinds of investments, not all of which earn money by making capital gains or earning stock dividends. But don't get the impression that the low capital gains tax and the zero tax on stock dividends benefits the little guy investor who has stocks in a 401k or IRA --- it only benefits people who have non-retirement stock portfolios.

Personally, I don't favor a lot of the tax policies of either the Democrats or Republicans. Taxes shoudl be as simple as possible, but I don't favor a flat tax or the so-called "fair tax" national sales tax. I think there needs to be brackets so that poor folks can afford to pay some tax without being wiped out, but the max bracket should never be higher than a third of what you make. I don't think it should matter how you make your income, by working for a wage, earning interest on your bank account, buying and selling stocks, earning dividends, selling popsicles, or renting umbrellas --- it's all income and none of them should have an advantage over another. I don't go in for all the huge variety of deductions or tax credits either. You should be able to deduct your state taxes, so you aren't paying taxes on your taxes, and deduct charitable donations, because those organizations do some of the work we might otherwise expect government to do. Other than that, I don't really like all the deductions and credits.

Maybe if we made all income taxable the same way, and got rid of most of the deductions and credits, then we could all have more reasonable rates, and we could put a couple million tax accountants and lawyers to work doing something productive instead of trying to game the tax code.