Gift tax – Again, something I think is inherently wrong. But I will concede that there may be a rationale behind it. How can you differentiate a “gift” vs a “payment for services” when someone claims it to be a gift to get around income tax? You don’t, you just tax gifts…

The dividend issue is slightly more convoluted. A corporation is a legal construct to create a “conceptual person” that enables it to earn income and own property, things that normally require being a non-Pinocchio type (i.e “real boy”) to do. So yes, a corporation’s income is taxed because it is in fact a conceptual legal “person” so its “time” is in fact a service and its products in fact are goods. Because of this legal fiction, the real flesh & blood “owners” (the stock holders) have their dividends taxed as income when they are distributed. Were they not a corporation, but in fact a big honking “sole proprietorship”, this income would still be taxed as income to the owner of the company directly. The double taxation is part of the price you pay for the “privilege” of having the legal fictitious entity. Again, “not right” in my view, but corporations themselves (lacking legs, arms and often hearts) can’t walk into a polling place…

When “Jim” sells that stock (his investment of wealth in an ownership stake) he also pays a tax on the capital gain of the increase of the stock price above his original purchase basis, not on the entire amount of the stock price.
Again, an investment of capital (a good or service depending on how you want to look at it) earning a return.
Now when “Jim” buys that property, there is indeed a transfer of goods, hence the right to tax. He holds the property as an investment – it gains value (in this case) just by existing and becoming a more desirable and valuable good over time.
When he sells it, the increase in value is then realized as income (capital gain) and thus taxed. If he held the property the gain is not taxed, much like the deposit in your 401k account. As long as you don’t take the distribution of it, it just keeps on growing tax free for that time period. You pay the taxes on what you take in distributions as income – deferred earnings.
So in these cases (apart from the double tax in the corporate income/dividend situation) there is an exchange of goods (property).

“Unfair” – Your good liberal socialist heart throbs within you. Unfair is very much in the eye of the beholder. This is where those of the “leftward” bent go off the rails. They charge headlong down the “feelings” road vs remaining analytical.
ANY tax that does not tax transfer of goods or services is inherently “burdensome” and “unfair”.
What is more “fair” than every individual paying the same exact percentage – a flat tax? Big or small, color-blind and unwavering, everyone is treated equally. Perfect? No, but it is “fair”.
Why should someone be taxed at a higher percentage because they are smarter, work harder or have a better idea and make more money?
Sales tax isn’t “unfair” – it is the same no matter your range of income. That guy buying the BMW pays the same percentage of tax as the poor college student buying that cheap Chevy Cobalt, but he does end up paying much more in total real dollars. That’s fair.
Ever heard of the “Earned Income Credit”? That is essentially a rebate on taxes the “poor” never paid in the first place, kind of a “1040 welfare”…
Go check out how much of the total gross income tax burden percentage is actually paid by only the top 10% of income tax payers…
As far as “fair” goes, a graduated income tax itself in inherently “unfair” and regressive.
An economy is based on the transfer of wealth for goods and services.
Our tax code itself is the real problem with the Congress and lobbyists. If there were no special credits and tax loopholes and everyone paid the same rate with no tax benefits to be gained, lobbying as we know it would disappear overnight. I don’t plan to discuss the problems inherent in a flat tax (I know there are), so don’t go there…
But now my rant has taken a turn down another path so I will rein myself in and stop…

The property tax is an easy counter-example to your standard that any principal should only be taxed once. Is this a double-tax since your property is assessed tax every year whether it goes up, down, or remains the same in value?

The gift tax is a counter-example to your standard of two-way transfers of goods. A gift, by definition, is a one way transfer of wealth. The property tax is another – where is the transfer in this tax, which is our nation’s oldest?

But these are just the most direct and obvious counters. In a more abstract way, all the money that everyone makes is taxed multiple times. Consider this hypothetical: PPG makes $1 billion profit more than usual (they pay corporate taxes) and decide to issue a dividend to their stockholders, including “Jim” (who pays a dividend tax). Jim uses his whopping check to buy some property (on which he pays sales tax) and then holds that property for a while (and pays property tax) until he eventually sells it for a profit (and pays capital gains tax). It’s the same money being circulated and taxed every time it changes hands (not, as you assert, whenever two-way transfers of goods and services occurs).

And finally, I fail to see how the low-percentage state inheritance taxes of about 4.5% qualify as “burdensome” and “unfair.” Are they really burdensome? All of the income from the estate of a deceased person is theoretically incremental to the heir’s own wealth, so why should such a small tax be “burdensome?” Is it really unfair? Unfair taxes are those that disproportionally tax the poor. The Pennsylvania sales tax and the Arkansas grocery tax are perfect examples of truly “unfair” taxes. I don’t see how the taxes we are talking about qualify as “unfair.”

“Inheritance tax is calculated at a percentage of the value of the assets transferred which is determined by the relationship of the heir to the decedent and the decedent’s date of death. For dates of death on or after July 1, 2000, the tax rate for Pennsylvania Inheritance Tax is 4.5 percent for transfers to direct descendants (lineal heirs), 12 percent for transfers to siblings, and 15 percent for transfers to other heirs (except charitable organizations, exempt institutions, and government entities). Property owned jointly between husband and wife is exempt from Inheritance Tax, while property inherited from a spouse, or from a child twenty-one or younger by a parent is taxed at a rate of 0 percent.”

4.5% can be a lot of money for direct heirs to pay, but proportionally, it isn’t really that high. In fact, 4.5% is almost exactly the net tax percentage that I end up paying every April, and I don’t feel all that burdened by it, even though I am a poor college student.

Nobody likes to pay taxes, but we get a good amount of services for the money that we pay.

On the issue of double taxation, that argument could be made to any tax. The fact is that money is taxed just about any time it changes hands. It’s taxed when I make it as income, it’s taxed when I buy a Big Mac, and it’s taxed when I sell my stock for profit. There is not necessarily this idea of “money that has already been taxed” and therefore should never be taxed again.

By the way, I haven’t been able to find Republicans in the PA legislature who are pushing for the PA inheritance tax to be repealed. Maybe they are, but that isn’t the rallying issue the right wing is using.

Who said anything about that, CJ? I am merely one player in this ideological political game. I am certainly biased. I don’t claim to be an independant and I also don’t claim to be simply reporting news and events. I assume that people have other outlets for those things. I further assume that people come to this blog to hear commentary and to have discussion.

That being said, everything that I said was true. You can hold me to a standard of truthfulness. And if there are inconsistencies, please point them out. Feel free to use specifics, also, instead of just saying “well both sides do this…”