Anyone who has been around RJsCorner for very long knows what I think about unearned income. It is outrageous that money received that was not earned is often taxed at a lower rate than the money you earn be the sweat of your brow. To me, that is most fundamentally flawed part of our tax structure and needs to change. The vast majority of unearned income comes from inheritance taxes. Passing wealth from one generation to another is what is primarily responsible for our American Aristocracy and the resulting inequality.
I know that the Republican Party, or at least what is left of it, has convinced many that inheritance taxes are “death taxes” that are stolen from the rightful heirs. I just don’t buy that. Yeah, we should be able to pass on to our children and maybe even grandchildren an income that will buffer them from possible hard times. But for wealth to pass for generation to generation so that the heirs will never know want is the foundation for inequality. How can we prevent that from happening? I’m glad you asked that question, as I have an idea in mind to level it all out. 🤓
Let’s tax any inheritance over $10 million back to where it used to be, about 80%. As shown here that was the top rate from 1934 until 1980. If it is really true that the U.S. population disdains the very idea of an aristocracy then this should be an easy sell. Let’s make it even easier by targeting where this tax is used.
Let’s treat the inheritance tax kinda like the Social Security tax in that it will be directed for one purpose only and that is education. An educated populace is critical to any democracy and given all the lazy minds lately in the political populace we are losing that required asset. Education, except for saving the earth, should be our number one priority. A critical part of that is to extend education beyond high school to be free and part of every citizen’s right.
I often brag here that I paid my way through college by working 40 hours per week during the school year and 60 to 84 hours per week during the summer months. I couldn’t qualify for hardship scholarships since my mother’s current husband was a rich lawyer. They just did not accept the exemption due to her having no interest in helping me, as she was fully consumed with herself.
I realize that the cost of higher education today makes paying for it yourself almost impossible and the student debt cripples anyone who doesn’t have upper middle-class parents who paid for it. Getting an education, like having healthcare should be an inalienable right for everyone. Using taxes on the rich just makes sense to accomplish that.