Edward J. McCaffery
- Published in print:
- 2002
- Published Online:
- March 2013
- ISBN:
- 9780226555607
- eISBN:
- 9780226555669
- Item type:
- book
- Publisher:
- University of Chicago Press
- DOI:
- 10.7208/chicago/9780226555669.001.0001
- Subject:
- Political Science, Political Economy
The current tax system is unfair. Some of the richest people in America pay no tax, while a huge share of the tax burden falls on the rest of us. A mere glance at the tax code confirms that it is far ...
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The current tax system is unfair. Some of the richest people in America pay no tax, while a huge share of the tax burden falls on the rest of us. A mere glance at the tax code confirms that it is far too complex, with volumes of rules that no ordinary person could possibly comprehend. Some conservatives have called for a so-called flat tax. But a flat tax is not necessarily a simple tax, and “flat” means “more” for most taxpayers: a rise in middle-class taxes to finance tax cuts for the rich. Is there another choice? This book proposes a straightforward and fair alternative. A “fair not flat” tax that is consistent and progressive would tax spending, not income and savings. And if it were collected at its lower levels through a national sales tax, most people would not have to file a return. A supplemental tax on spending for the wealthiest individuals would make the national sales tax progressive. Under this system, a family of four would pay no tax on their first $20,000 in spending, and 15 percent on the next $60,000. Only the few families who spend more than $80,000 a year would be subject to the supplemental tax. Necessities would be taxed less than ordinary and luxury items. No one would be taxed directly on savings. The estate and gift or so-called death tax would be abolished, for the simple reason that dead people don't spend. The “fair not flat” tax would fall on heirs when they spend their good fortune.Less
The current tax system is unfair. Some of the richest people in America pay no tax, while a huge share of the tax burden falls on the rest of us. A mere glance at the tax code confirms that it is far too complex, with volumes of rules that no ordinary person could possibly comprehend. Some conservatives have called for a so-called flat tax. But a flat tax is not necessarily a simple tax, and “flat” means “more” for most taxpayers: a rise in middle-class taxes to finance tax cuts for the rich. Is there another choice? This book proposes a straightforward and fair alternative. A “fair not flat” tax that is consistent and progressive would tax spending, not income and savings. And if it were collected at its lower levels through a national sales tax, most people would not have to file a return. A supplemental tax on spending for the wealthiest individuals would make the national sales tax progressive. Under this system, a family of four would pay no tax on their first $20,000 in spending, and 15 percent on the next $60,000. Only the few families who spend more than $80,000 a year would be subject to the supplemental tax. Necessities would be taxed less than ordinary and luxury items. No one would be taxed directly on savings. The estate and gift or so-called death tax would be abolished, for the simple reason that dead people don't spend. The “fair not flat” tax would fall on heirs when they spend their good fortune.
- Published in print:
- 2002
- Published Online:
- March 2013
- ISBN:
- 9780226555607
- eISBN:
- 9780226555669
- Item type:
- chapter
- Publisher:
- University of Chicago Press
- DOI:
- 10.7208/chicago/9780226555669.003.0005
- Subject:
- Political Science, Political Economy
Inheritance is a terribly inefficient way to pass wealth to others. The final piece of the tax-base puzzle concerns gifts and inheritances. Current law taxes these to the donors under a distinct ...
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Inheritance is a terribly inefficient way to pass wealth to others. The final piece of the tax-base puzzle concerns gifts and inheritances. Current law taxes these to the donors under a distinct federal tax—the gift and estate tax. This tax serves as a companion to the income tax, which never has included gifts or inheritances within its definition of taxable income. Conservatives call the gift and estate tax the “death tax” and adamantly support the repeal. The Fair Not Flat Tax eliminates both the inconsistent income tax and the ineffective gift and estate tax, substituting a single, consistent, progressive spending tax for both taxes. Personal spending becomes the sole tax base. Loopholes of questionable legitimacy pose problems aplenty. But as with the inconsistent income tax, even the perfectly legitimate exceptions—the annual exclusion and lifetime exemption amounts—are significant enough to bring the estate tax's very being into question.Less
Inheritance is a terribly inefficient way to pass wealth to others. The final piece of the tax-base puzzle concerns gifts and inheritances. Current law taxes these to the donors under a distinct federal tax—the gift and estate tax. This tax serves as a companion to the income tax, which never has included gifts or inheritances within its definition of taxable income. Conservatives call the gift and estate tax the “death tax” and adamantly support the repeal. The Fair Not Flat Tax eliminates both the inconsistent income tax and the ineffective gift and estate tax, substituting a single, consistent, progressive spending tax for both taxes. Personal spending becomes the sole tax base. Loopholes of questionable legitimacy pose problems aplenty. But as with the inconsistent income tax, even the perfectly legitimate exceptions—the annual exclusion and lifetime exemption amounts—are significant enough to bring the estate tax's very being into question.
Thomas E. Sheridan, Andrew Reeves, and Susan Charnley
- Published in print:
- 2014
- Published Online:
- January 2015
- ISBN:
- 9780226165684
- eISBN:
- 9780226165851
- Item type:
- chapter
- Publisher:
- University of Chicago Press
- DOI:
- 10.7208/chicago/9780226165851.003.0022
- Subject:
- Biology, Biodiversity / Conservation Biology
The estate tax, or “death tax,” is often attributed to the demise of large ranches and nonindustrial private forests under the premise that the taxes owed by those who inherit the property are ...
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The estate tax, or “death tax,” is often attributed to the demise of large ranches and nonindustrial private forests under the premise that the taxes owed by those who inherit the property are unaffordable, forcing the descendants to sell or subdivide the property. This situation arises when land is highly valued as a real estate investment, even if those making a living off it—and preserving its ecological value—are barely able to make a profit, let alone pay a large tax bill. A 2008 Tax Policy Center report claimed that only a small percentage of family farms and ranches have sufficient assets to evoke the estate tax. However, it overlooks the fact that the average size of western ranches and forest holdings is larger than in the East, and loss of just a few working landscapes may promote fragmentation of ecosystems and conservation efforts more than provide economic equity.Less
The estate tax, or “death tax,” is often attributed to the demise of large ranches and nonindustrial private forests under the premise that the taxes owed by those who inherit the property are unaffordable, forcing the descendants to sell or subdivide the property. This situation arises when land is highly valued as a real estate investment, even if those making a living off it—and preserving its ecological value—are barely able to make a profit, let alone pay a large tax bill. A 2008 Tax Policy Center report claimed that only a small percentage of family farms and ranches have sufficient assets to evoke the estate tax. However, it overlooks the fact that the average size of western ranches and forest holdings is larger than in the East, and loss of just a few working landscapes may promote fragmentation of ecosystems and conservation efforts more than provide economic equity.
