The inheritance tax hurts the poor by encouraging the rich to overspend because they can’t leave it all to Junior. This tax-avoidance induced spending on jets, boats and lavish parties reduces the money available for new plant and equipment. Look, America already overconsumes. We shouldn’t pass tax increases that exacerbate this. So go ahead and tax the rich, but in a less harmful way.
Tag Archives: taxes
Blackmailer’s Paradox
Faced with a no new taxes or a debt default ultimatum from the Tea Party, Obama should have either called their bluff and appeared genuinely willing to let the US default or should have pursued the 14th amendment option with its language about “the validity of the public debt.” Either strategy would have attenuated Tea Party leverage and gotten Obama out of the Blackmailer’s Paradox.
Taxes and Rates
Ever wonder how much federal tax you pay? The answer (with some assumptions) depends on 4 tax rates. 1st you pay the combined income and payroll tax on earnings. 2nd you pay the corporate tax while you invest your money. 3rd you pay dividend and capital gains tax as you receive the income. 4th you pay the estate tax when you leave what has accumulated to your heirs. Clearly taxes and rates matter