I paid tax and i used the money to buy properties, and to give them to my children when i pass on. The money has been taxed before, and i see injustice if i have to pay inheritance tax. I became rich for a reason - because i worked very hard, and there's no reason to penalise me just because i have become rich. All this money's not corrupted money.

Say the government were to go ahead with your suggestion to only impose tax above rm3 million.

Going by this suggestion, the general population that will be taxable will be low.

This means there will be a significant drop in the govt's income and will have to find ways to finance the shortage.

I refrained from posting further in this thread because I felt that it was becoming more political and hence might be viewed as something more appropriate for Real World Issues. However, since a moderator has deigned to participate, I suppose it has the LYN Seal of Approval and therefore it is safe. As expected, most of the posters in this forum object to the imposition of inheritance and gift taxes (the two of them go hand in hand, it would silly to impose one without the other for obvious reasons). I will try to address your arguments is a fair and reasonable manner. Generally, as I see it, there are two main lines of argument:

1. The Malaysian government would waste the additional income anyway.
2. Inheritance taxes are injust because my money has already been taxed once when I earn it!

First of all, whether you like it or not, double taxation is already a reality. You remember paying sales taxes in restaurants, right? This is going to get worse when the GST comes into being and that's how it works all over the world. Secondly, in Malaysia, it's not necessarily true that your money has already been taxed once, because Malaysia has no capital gains taxes! If you make a fortune by for example trading on the stockmarket, like Datuk Ishak Ismail recently did with Kenmark, you don't need to pay any income taxes on your gains at all and when you leave it all to your spoiled brats, they don't need to pay any inheritance taxes at all. Win-win! This is why Malaysia is a great country for capitalists. In fact, in countries that do have a capital gains tax, this is one major argument in favor of inheritance taxes, Without them, there would be a tax loophole when the capital gains are never realized when the original owner is alive and therefore never taxed.

But most importantly of all, arguing about the principle of double taxation is ultimately a pointless distraction. I can for example satisfy your desire to not have double taxation at all and still raise sufficient money for the state by arbitrarily raising one type of tax to ridiculous levels. For example, I could agree not to have inheritance taxes or sales taxes at all but in exchange I would raise income tax rates to, say, 70%? Would that make you happy? This is why when discussing taxes, you abandon silly talk about whether or not double taxation is right in principle. Instead, you pay attention to overall tax burdens after all of the different types of taxes are taken into account.

Given that we need a government, and given that governments need taxes to function, and given that we must distribute that tax burden across the entire population, most people agree that the best solution would be to impose progressive taxes. This is the principle that the rich should pay more taxes, not just as an absolute figure, but as a proportion of their wealth and income, than the poor. And it turns out that inheritance taxes are generally found to be the single most progressive tax possible.

Anyway, I have more to say about actual implementation details and why it's silly for middle-class people to oppose inheritance taxes, but that's all the energy I have for today.

One already pays tax based on income. The higher the income bracket, the more tax you pay. You pay this throughout your earning life. On top of this, you pay another layer of tax because you have earned and saved all the money. You could easily not bother to save or not bother to work to earn that much in the first place, and not pay a cent of inheritance tax. Those are facts. What one "feels" is irrelevant.

The practical reality is you pay taxes because it pays for all those government services that benefits everyone. The point is about the fairness of the taxation system and how much tax you end up paying, and how much govt services you get in return. The point is never about whether tax money is "really ours" or "not really ours" - those are meaningless phrases.

A bit like company dividends which have already been taxed at source. So when the share holder gets it, the source taxation is taken into account.

Of course, all depends on the actual mechanics of the inheritance tax calculations.

Having said the above, the "rich families" are paying some form of  "inheritance & capital gain tax" in the form of income tax. Most rich families are rich not because they have tons of cash but have shares in companies (which are passed to the next generation), and these companies would be paying income tax (which include disposal off their investments/assets  and the shareholders which inherited the shares would be getting less). Therefore the abolishment of capital gain tax actually benefits the not so rich hardworking wage earner individuals that are smart enough to invest in whatever they invest in.

As for GST, well I guess it would definitely affect all but the rich would be paying more taxes too as their transactions value are higher. If you ask me, the present tax system is unfair, less than 3.8% of the entire Malaysia Population pays income tax and that includes me. From my point of view, the other 96% of the population of Malaysia is enjoying my hardwork. With GST, all those individuals running illegal businesses/getting corrupt money would also be paying taxes and thus contributing to the "well being" of the country.