Sure, and we also didn't have the fucking insanity of step-up-basis and our current approach of literally not taxing the accumulation of wealth, ever, for those at the top of the pyramid. We also had unions.
We can trade examples all day but the fact is that the tax burden on the very wealthy has plummeted and income inequality has skyrocketed. Those are broad measurable facts.
Things suck more as a result. I'm not a young guy, I've watched the change.
1. As I’m sure you well know the estate tax exemption is measured in 8 figures at this point, so no, you don’t “pay 40%” to the federal government. And that’s leaving aside the fact that the dead person can make billions in capital gains, spend it wildly (via loans) and never pay a fucking dime of taxes on it at all. Nobody ever does, that’s the basis issue. It’s a fucking travesty that it’s the current law.
2. I’m rich. Believe it or not some of us actually give a shit what kind of society we are building.
The real question you should be asking is how does other people having less than you within a deeply unfair system not take away from your happiness.
It's $13 million for the federal estate tax exemption, and the top rate for Washington's is 20% of the amount over $9 million (it starts being taxed at $1m). It's a meaningless exemption if your net worth is $1b.
> that’s the basis issue
Basis is the amount paid for the stock. The basis boost happens at death. It has nothing to do with margin debt.
Margin debt isn't free. There are limits to how much one can margin. Etrade margin rates are 12.2%, which is pretty high.
If your stocks drop precipitously, which happens every few years, you're subject to a margin call where the broker will sell your stock for you and you get to pay the tax as well. If there isn't enough stock to cover the debt, the broker will come after your other assets to pay it.
Do you also think it is a travesty to mortgage your house and spend it, too? Do you think you should be income taxed every year on the appreciation in value of your house?
> a deeply unfair system
Anyone can open a robinhood.com account on their phone, buy some AMZN for $100, and margin it. The stock trading system in the US is actually very fair and democratic. It's open to all with a phone and a credit card.
> The real question you should be asking is how does other people having less than you within a deeply unfair system not take away from your happiness.
I encourage people with what I've learned about how to invest and improve their lives. A couple have listened and are now doing well, the rest continued making poor choices.
> I’m rich
Then I infer you're not that unhappy about society. The IRS takes donations. If it will make you happy, you can de-rich yourself at any moment by giving it to the IRS. If you look at history, however, confiscating the wealth of the wealthy has never done much of anything to elevate the poor.
We can trade examples all day but the fact is that the tax burden on the very wealthy has plummeted and income inequality has skyrocketed. Those are broad measurable facts.
Things suck more as a result. I'm not a young guy, I've watched the change.