If people are responsible for themselves, then, only with special exceptions, they are responsible for paying their fair portion of benefits received. Where possible and feasible, individuals will pay directly for services used.
The problem is that there are social security taxes and other taxes. What we are talking about here is only federal income taxes and fees, not counting taxes received for the benefit of future retirement and medical care. The latter are segregated and cannot be counted as federal revenue for determining the deficits. Each of those programs stand on their own, keeping total integrity within.
PROGRESSIVE INCOME TAX RATES
We have had progressive income tax rates for many year. Although some would justify that by saying the poor people can't afford to pay much, while the middle class only only afford to pay so much, with the ability of the rich to pay much more. But a tax based on who can pay the most is more of a socialistic concept.
However, it does make sense that those who benefit the most should pay more in some proportion to the greater benefit, but surely not 100% of it or there would be no incentive to create greater organizations that will provide more jobs. There's a balance. And if the balance is too far off, high earning people shall go to other nations and take the job creating ability with then. Surely we do not want to kill the goose that lays the golden eggs.
We want this land to be a land of opportunity and growth, for the greater good of the people overall.
What is the maximum rate that should be charged on the higher incomes and where should the cut-off be? Although reach people would not be hurt by paying very high tax rates, because they already have enough, there is a limit that can be charged to keep them in this country.
Japan, Canada, and the United States have the highest corporate taxes as a percentage of income. (Wikipedia as source.) Ireland has the lowest and had created from that a huge period of growth and prosperity as many companies relocated there. Personal income taxes for the US on average as a percentage of average income is in the lower range.
Higher rates in Germany have created a higher rate of emigration, resulting in a "brain drain" n the nation's brightest and most motivated people, so obviously those people do not see the benefit of having a 45% marginal tax rate on average income workers.
In the new health care plan under Obama, on Medicare: "That higher income group also would pay a new 3.8 percent tax on income from investments including capital gains, dividends and interest starting in 2013." So there is already increased taxes for those above $250,000 of income. A 2.9% excise tax is imposed on the sale of medical devices, plus plenty of other taxes that are hidden in the bill.
Wealth acquisition shall not be taxed twice. A practical reason for not taxing estates, besides being equitable, is to not force owners of corporation, farms, or any illiquid assets to liquidate them to pay taxes. One certainly cannot anticipate the exact time to die.
However, though it has been an advantage of dying, the exemption of all accumulated gains from income taxes should be repealed. In the past, capital gains to date of death had been "forgiven" and the cost basis "stepped up" to a new one for tax purposes as of the date of the estate (two different dates allowed). The net result is that inheritors would have to pay income tax when they sell based on the original purchase cost of the original buyer.
There is no reasonable argument that the rich don't deserve it (to keep the money) or that it has to be taken and given to others because they deserve it (socialism). There is no reasonable argument against too much wealth being created for those who take risks and earn more money. The limit on size only applies to situations where there is restraint of fair pricing and competition, which is certainly valid in the case of oligopolies (where a few large organizations excessively control pricing or competition) or monopolied. Laws are already in place to control those.
In looking to see if there is harm created by changing this, we note that in terms of size, estate taxes supply approximately 1% of Federal Revenues. Of course, the income taxes earned upon sale of the non-stepped up basis securities should offset that effect, as it applies not only to the top estates but to ALL estates regardless of size.
An amusingly illogical assertion by Congressman Weiner was the the inheritors did nothing to earn it and therefore they should be taxed. Heh???
Some social good is not only for those benefitted directly but also for the benefit of others. The argument could be made that education of citizens will benefit those who run businesses, as they are more prosperous with more capable employees.