Because as we work harder, and harder to earn the extra income, an ever increasing percentage goes to the government. Why? It seems very fair for the person who does very little, and for those who are enjoying the fruits of anothers labor. But, then there is another case you are not considering.
As I said earlier, it is neccesary for those who are unable to be productive to be supported by the able bodied masses. I view income taxes as punishing ones earning potential.
Let's outline an example... If your rich parents gifted you $20,000 /year (as securities w/ value at purchase -- life time $600,000 exemption per parent) and then perhaps a little more (say $99,999 gift taxed at 28%, leaving you with ~ $78,000) per year of your life until they died. So say those securities appreciated at the average stock market rate. Also say they took care of some of your expenses while they were still alive, like paying for your education, housing, clothing, vacations, vehicles, etc... Then say they were able to transfer most of their assets to you using a grantor income trust. You'd be pretty well off, and having never worked you would never have paid any income taxes. If they gave you more, there would be estate taxes on that part. When you sell the securities you would need to pay the capital gains taxes, but that seems managable. Let's say they were able to do this for 50 years...
So compare that priviledged person to the person who wants to get to the same point on his own gumption. Not so easy. The problem is not that your rich parents had too much, they undoubtably earned it. The problem is that the government taxes people who earn money much more than they do people who spend money.
As I said earlier, it is neccesary for those who are unable to be productive to be supported by the able bodied masses. I view income taxes as punishing ones earning potential.
Let's outline an example... If your rich parents gifted you $20,000 /year (as securities w/ value at purchase -- life time $600,000 exemption per parent) and then perhaps a little more (say $99,999 gift taxed at 28%, leaving you with ~ $78,000) per year of your life until they died. So say those securities appreciated at the average stock market rate. Also say they took care of some of your expenses while they were still alive, like paying for your education, housing, clothing, vacations, vehicles, etc... Then say they were able to transfer most of their assets to you using a grantor income trust. You'd be pretty well off, and having never worked you would never have paid any income taxes. If they gave you more, there would be estate taxes on that part. When you sell the securities you would need to pay the capital gains taxes, but that seems managable. Let's say they were able to do this for 50 years...
So compare that priviledged person to the person who wants to get to the same point on his own gumption. Not so easy. The problem is not that your rich parents had too much, they undoubtably earned it. The problem is that the government taxes people who earn money much more than they do people who spend money.
”There are more things in heaven and earth, Horatio, Than are dreamt of in your philosophy." - Hamlet (1.5.167-8), Hamlet to Horatio.
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