by different gov't entities for different deliveries of services. Fed income tax for their services, state sales and/or income for theirs, and local property taxes for schools, etc. Three different groups taking a cut to pay for what we ask from them. You could roll all those functions into the Fed gov't and keep it to one tax system but it wouldn't change the net result, and not how we want to be structured IMO.

But inheritance taxes are a 2nd tax at the Fed level so there is some degree of double taxation. The issue is the Cap gains are not taxed at all without it because of the stepup, and there should be a mechanism for that. But not at the ridiculous 40% of market value that exists now, or anywhere close. Forget the size of the estate and exemption for a moment, imagine Grandma passes away and leaves you her 15 yr old Cadillac with 6K miles on it. Why on earth should you pay tax on 40% (min + state inheritance where applicable) of the value of that depreciating car she bought with after tax dollars? How about if Grandma just socked it away in the bank and was a miser that ended up with a bank account over the $5.2M exemption, should you hand over 40% of that to the gov't just because she was a penny pincher? How about if grandma sells everything the day before dying and pays cap gains taxes, but the next day her heirs should pay another 40% on the proceeds? There are no capital gains that went untaxed in any of those situations, so it would indeed be double taxation. And at a rate that you can't possibly justify other than it's done to someone else.


[Post edited by Hoodafan at 11/03/2017 11:11AM]