Here's how to really soak the rich
B. H. Obama may have opened the door to finding new monies for enhancing the revenue side of the fiscal cliff. The fundamental problem for the Democrats and the Republicans is that they both want to raise revenue based on personal income rather than assets. Utter foolishness. I'd suggest we use the IRS Gross Estate -Form 706, as a basis for finding new revenues. Why assets rather than income? As Willie Sutton noted, "Because that's were the money is."
Here's the plan in a nutshell.
1. On Jan 1, 2013, all Americans with net assets over $15 million, as calculated by Form 706 of the IRS will be assessed a once-in-a-lifetime estate tax equal to 50% of their Gross Estate.
2. This tax will be paid to the US Treasury in ten equal and annual payments starting in 2014. This will allow the orderly disposition of their hard assets into cash.
3. These high paying taxpayers will not have to pay any further estate taxes upon their death. However they will continue to pay annual income taxes and all other taxes just as they are normally required to do.
Simple isn't it? My back of the envelope calculation shows an increase of revenue over the next ten years of $3.2 trillion, double what B.H. Obama is currently requesting. I'm sure some sharp tax folks can calculate a more accurate number, but the basic concept is clear.
The high payers will have time to re-grow their estates, and the country will have known and dependable influx of new revenue for the next ten years.
On a more sobering note, this revenue solution does not address our out of control federal spending nor entitlement reform. Plus our current debt is around $16.3 trillion and growing at an astonishing rate of $3 to $4 billion a day.