Sunday, October 31, 2010
U.S. Rep. Cynthia Lummis is saying that some people are planning to stop life extending treatments such as dialysis so they die before December 31st. At the beginning of next year estate taxes will be reenacted. The current tax cuts cover large inheritances but once the new year rolls in the tax will go from 0 to a maximum 55 percent. As we talked in class when we use estate taxes we are diminishing wealth. People that have built up wealth to pass it on to their families, not have it taken away. When taking the money from the people that have earned it, the government is using that money for people that don't have as much. The people on welfare use this money for income and once they spend the money the wealth is gone. With higher and higher estate taxes there will be less incentive for people to accumulate wealth to pass on to their loved ones. People will figure out new ways to pass money onto their relatives without the government knowing. If their absolutely needs to be an estate tax it needs to be reasonable because the if the rates get too high there will be people avoiding the government when it comes to wealth transfer and the government will be collecting a lot less estates.