09-17-2010, 12:35 AM
(09-17-2010, 12:22 AM)kandrathe Wrote: Person A inherits a 500 million dollar trust fund from daddy set up in the Bahama's, and draws (lots of numbers)
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Person A took no risks, has more wealth, was less "productive", earned $50K more over the 10 years, and paid a 4.7% lower tax rate.
Your example only seems unfair because Person A is the son of some previously productive person A*, who apparently preferred to transfer his wealth to his ne'er do well son rather than spend it on champagne and foot massages.
Or, in other words, this is not really income for Person A. It is income for his parent, who transferred the wealth to him. Presumably, you want to encourage his father, no? Assuming he earned the wealth legitimately, and didn't even bother to spend it, he's surely an Ayn Rand dream entrepreneur.
If you really want to stop that from happening, tax the crap out of estates. Death taxes FTW. I'm all for a great levelling after death - the children of the rich are already born with three aces, no particular reason to deal them a fourth.
-Jester