Which of Income Tax or Gift Tax is more meritocratic? ANd which his more fair? Income Tax is the redistribution of money from you that you earned, whereas gift tax is the redistribution of money from you that you didn't earn... so gift tax? But then, those giving the gift will argue that they earned it and should be allowed to gift it to whoever they want, including to their children through inhereitance. They will also argue that a gift tax discourages people from earning more than they themselves need, so will stifle the economy (but that's not about meritorcracy so is a bit off topic here). So which is it?
The givers pay the gift tax. The idea is to prevent the givers from avoiding inheritance tax. So far as merit goes, I support property rights, so I’m not a big fan of gift or inheritance taxes. I am especially supportive of people passing family farms from one generation to another. You can avoid many of these taxes using trusts. Make sure you find a good attorney. A bad one can really screw things up and you paying more taxes than you should. I think that income taxes are fairer. Gift taxes are double taxation.
I suggest neither is the right answer here. The real question is how many bites at the same apple should IRS have? I can't think of a single reason why they should ever have more than one.
I think one can gift like 15k a year per person tax free the inheritance tax is much more, 12 million total
I would say neither. Income tax is a payment for a civilized society. It is designed to pay for government functions directed by the Constitution. Whether or not we agree on which government functions should be funded by tax money is done through state legislatures, courts, and amendments through our electoral process. A gift tax is merely a payment so that the money is not concentrated by the very few. It was created to make sure we don't have an aristocracy. However, you can give it to anyone. There is no law on who you can give. There is an annual exclusion each year in which no gift tax would be required. If you make gifts to any one person during the tax year at or below the annual exclusion, generally, you do not need to file a gift. So, if you give 10 people each $17000, a total of $1.7 million, then no gift tax Sois required. If you give more than that, then you must file a gift tax and you will use up all or part of your unified lifetime credit, equal to the amount of the Estate Tax Exemption. So, in either case I don't think your theory is holding here.
All income should be treated as regular income, give a lifetime exception for a specific amount in “gifts” and everything else should be classified as income. No loopholes, no deductions, no exemptions
Technically the gift tax is paid by the donor if it is to be paid, not the donee, and gift taxes can be somewhat avoided with planning easier than income taxes can be. I mean if you can afford to give away $13M in your life, then you can afford to foot the bill for the gift taxes on the excess....
The income tax has more 'merit' than gift taxes, but everyone should be made to pay an income tax according to actual income without all the gimmicks that the wealthy use to avoid paying their fair share.
That is an extreme position. What about the extreme levels of irresponsibility of our politicians once they get the money?
