Ray Madoff

Because when we get rid of the estate tax, we see about how our income tax system preferences inherited wealth.

And we have a tax system, as I mentioned, that has the income tax system is designed to be very, very broad.

It starts this idea that gross income includes all income from whatever source derived.

And so much so that even if two people do a barter exchange, right?

Somebody says, I paint your house in exchange for you filing my taxes.

Each of those people are supposed to pay taxes on the value of what they received for that exchange.

Really broad, comprehensive tax.

And then you look at this tax and you look at gifts, inheritances, life insurance, and they're all excluded.

Well, there's no justification for having a broad exclusion of all of those sources of income when lottery winnings and every other type of –

acquisitions of money is subject to tax.

So by getting rid of the estate tax, it frees us up to bring inheritances, gifts, and life insurance back into the income tax system where they belong.

And there's a number of advantages to that.

First of all, the tax will be imposed on each person who receives the money based on their appropriate income tax bracket.

And so – and it will also give us a chance to get rid of all of those problematic aspects of the estate tax that allowed for so much tax evasion, right?

We could do a tax on inheritances 2.0 that is more appropriately levied on the recipients of inherited wealth.

When we do so, we're going to need to think directly about how much, if at all, do we want to subsidize inheritances.

I do think inheritances have become increasingly important for a lot of Americans, particularly as our young Americans are having a hard time taking

Getting jobs that are sufficient to support the lifestyle, what we used to consider a basic middle-class lifestyle, things like owning a home, being able to send your kids to school.

A lot of people are depending on inheritances to help them acquire those basics in life.

And so I think that we need to understand that we need to provide some exemption for inheritance.