Michigan Votes Forum

To resolve the budget crisis, legislators are looking for the least objectionable alternatives to raise taxes.  The alternatives always gravitate to: 1) Those borne by a small segment of the population.  The idea is to limit voter objection, especially by targeting a segment that generally does not support the political party in charge.  2) Tax the "rich".  There seems to be an implicit assumption that anyone with money got it by cheating someone else, not through education, hard work, and saving (depriving one's self from amenities that others take for granted).  3) "Sin taxes" and taxes on goods perceived to be enjoyed only by people of higher means.  These get support from voters who do not partake in the "sins".  The rationale is that the segment being taxed deserves it.  There are other alternatives but spreading the pain to everyone equally is the least favored because all voters will complain.

The "death" tax is an easy target because people think that only a few very rich people will pay (and who likes rich people?).  Many rich people worked hard their entire lives; putting themselves through college, working 12-hour days and weekends, and working in high-stress jobs.  Many saved money by depriving themselves of vacations, cable TV, fancy cell phones, etc.  Many do not consider themselves "rich" because they worked for their money.  Most have enough intelligence or experience to have amassed their wealth, and will take action to preserve it when faced with higher taxes.

I have saved money the hard way and will not give it up without a fight.  My parents, who I am taking care of in their old age, did too.  If Michigan enacts a death tax, I will vote with my feet; i.e., I will leave the state and take my parents with me.  Michigan will no longer enjoy the benefits of all our spending.  Those who will lose include store owners, assisted living personnel, medical workers, etc.  Oh... and the State of Michigan will lose our tax revenues.  If the so-called "rich" leave the state, who will be left to support those who remain?  This is the beginning of a downward spiral.

I agree that legislators may try to limit voter objection by targeting tax increases to segments of the population that do not support the party in power. This also works for tax cuts, as seen in the actions of previous republican administrations both in the state and the federal governments, when tax cuts were handed out to the "rich" as political favors, even though most economist don't buy the trickle down theory favored by conservative republicans. Our present economic recession follows a period of tax cuts for the rich.

This estate tax does not take money away from a person who worked hard to earn it. It taxes money a person receives and didn't earn. It does not tax family farms and businesses, and would be about 5.2% over 2 million dollars inherited.

"To whom much is given, much is expected" Luke 12:48

 How can anyone presume that a person who accumulated wealth did not earn it?  This is an easy position for someone to take who did not accumulate wealth and blames others.  I have frequently seen people earning far more than I who took expensive vacations frequently, bought "fully loaded" cars, had cable TV with all the trimmings, cell phones, etc.  Most said they did not have enough savings to put their children through college.  By the way, going to night school to get a higher degree and a better paying job is not a cake-walk either.  Most co-workers chose either not to do this at all or chose a program with little value because it offered a degree without requiring much effort.

As for tax reductions, it seems obvious that the greatest benefit will go to those who pay the taxes in the first place.  After the reductions, the "rich" are still the ones paying the most taxes.

Michiganian:

 How can anyone presume that a person who accumulated wealth did not earn it? 

The estate tax is paid by the person inheriting the wealth, not the person who earned it and is dead. Therefore there is no need to presume the person paying the tax didn't earn the wealth, it's a fact. Contrary to those calling this a "death tax", dead people don't pay taxes. Those fortunate enough to inherit wealth should.

gypsy:

Those fortunate enough to inherit wealth should.

Regardless, the money in the estate has already been taxed and should not be taxed again just because it is being transfered to someone else.

Money isn't taxed, people are. The deceased person paid taxes on the money when they earned it, now the person inheriting it, (much easier than earning it) pays tax on it. Money goes around and around in our economy, and people pay taxes on it. The carpenter you hire to build your house with the money you earned and paid taxes on, has to pay taxes on it when he earns it, from you. See how that works?