Misleading. Rich families avoid paying capital gains taxes by passing their wealth on to their heirs. In fact, the largest share of big estates transferred from generation to generation are unrealized capital gains that have never been taxed.
Myth 8: The estate tax is a death tax that hits millions of Americans.
Baloney. The current estate tax, which only applies to assets in excess of 11 million dollars, or 22 million dollars for couples, affects fewer than 2,000 families.
Myth 9: If taxes are raised on the wealthy, they'll find ways to evade them. So very little money is going to be raised.
More rubbish. For example, a 2 percent wealth tax, as proposed by Senator Elizabeth Warren, would raise around 2.75 trillion dollars over the next decade with very little tax evasion, according to research. A 70 percent tax on incomes over 10 million would raise close to 720 billion dollars over 10 years.
Myth 10: The only reason to raise taxes on the wealthy is to collect revenue.
No. Although these proposals would generate lots of revenue and help us reduce the national debt while investing in schools, roads, and all the things we need another major purpose is to reduce inequality, and thereby safeguard democracy against oligarchy.
Myth 11: It's unfair to raise taxes on the wealthy.
Actually, it's unfair not to raise taxes on the rich. For the last 40 years, most Americans have seen no growth in their incomes at all, while the incomes of a minority at the top have skyrocketed. We're rapidly heading toward a society dominated by a handful of super-rich, many of whom have never worked a day in their lives. More than 60 percent of wealth in America is now inherited.
Myth 12: They earned it. It's their money.
Hogwash. It's their country, too. They couldn't maintain their fortunes without what America provides -- national defense, police, laws, courts, political stability, and the Constitution. They couldn't have got where they are without other things America provides education, infrastructure, and a nation that respects private property. And to argue it's "their money" also ignores a lot of other ways America has bestowed advantages on the rich everything from bailing out Wall Street bankers when they get into trouble, to subsidizing the research of Big Pharma.
So the next time you hear one of these myths, know the truth.
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