Redstate

If you DON'T think your entitled to your money, why do you keep any of it at all? Why don;t you just turn it all over to the government and let them take care of you?

I'm quite certain that I didn't say that I'm not entitled to any of my money, or that the government is entitled to all of it.

are paid that the estate tax is odious, reaching your hand into the coffin so to speak. Even in death Mother Government has to get her cut of the swag. It is probable that with this tax and allowing for types of assets you are looking at triple taxation, government can be greedy.
The argument for reduction or elimination is similar to other arguments for tax relief, it places more money in private hands, it creates more capital, it is conducive to both wealth and productivity. Perhaps not as productive as farm subsidies or underwriting teachers salary increases thru a Dept. of Education but life isn't perfect.

As to "why pay any taxes at all", the argument is over how much, not over an anarchial state, the position of entitlement of one's earnings is the baseline. In the absence of this the focus on still higher taxes would gain an unhealthy impetus. It is not only natural, it is essential, to remember from who and where the money the money comes.

Yes, we would return to old arguments over services, the size of government, so old they have been going on for over two millennia. You might say it's unavoidable.

"a man's admiration for absolute government is proportinate to the contempt he feels for those around him". Tocqueville

shouldn't we keep the estate tax and use those revenues to eliminate or at least greatly reduce the AMT (which affects considerably more Americans). I really have no issue with the estate tax, as it is money that presumably is not "counted on" like income. And the small business problem could be solved through lengthy payback periods and raising the cap to say $10,000,000.

I'm all in favor of getting rid of the AMT. It's a "gotcha" tax that gets you if you play by the rules for normal taxes.

Estate taxes on large estates, as long as there is a fairly large exemption, are probably the least onerous of all taxes. Speaking purely in economic terms they are better than alternatives because second and especially third generations are not nearly as dynamic in using the wealth to create or grow new businesses and jobs.
But you will not get a good reception here. For some reason, the estate tax has become a cause celeb.

"Nothing works like freedom, Nothing succeeds like liberty"
Kyle

The problem is that the post is couched in "it's your money, don't let the government take it!" terms that seem to miss the point, given that we *do* pay taxes. I agree that we could be having an agrument about what the government should do but this post doesn't seem conducive to that.

So, again: what's so bad about this tax in particular? Heck, I think a good argument could be made that the estate tax (inheritence tax, death tax, whatever you want to call it) is a fairer tax than any of the others I've mentioned. After all, once you're dead, you're dead -- you're not having money taken away from you, since you're quite dead and have no need of money. The government isn't taking money from you, it's taking money from your estate -- and there's a pretty big difference there. It's true that your children are losing money that they otherwise could have had, but they're not losing their own money, they're losing your estate's money. And if you believe, for some libertarian principle, that the money is yours to give to your children as you see fit, shouldn't you be raging against the gift tax instead?

You make some sense here, afterall, since we all apparently agree that we ought to pay at least something in taxes, why should we worry about the manner and time at which we cough it up?

Leave aside the beef most of us (I suspect) have is with the high level of taxation and how we'd much rather see the level decrease (and with it the un-necessary elements of our oversized government). If the government as a taxing authority has the power to take citizen's funds under threat of incarceration, then it ought to do so in the most fair, consistent, and equitable manner possible. What bothers me about the estate/inheritance/death tax is that unlike most other forms of taxation that use value-generating commerce as the focal point for capturing funds, the transfer of assets from parents to children or otherwise between family members is completely different. There is no value generating transaction. No business got done, there was no exchange of service. The economy is utterly unaffected by the transfer of assets between family members. Only when the assets are subsequently used (to pay for services, to invest, etc) is there an effect on actual commerce.

This says nothing of the unseemly nature of suggesting that a person owes the government some portion of their savings at the time of their death, simply because they've passed on. I know you characterize it as taking money not from the deceased but from the estate. That just doesn't make sense, and it's inconsistent - while a person may pay property taxes based on the 'size' of their estate, they never (so far) pay a yearly tax based on the raw value of the assets in their position at the time. Extending the logic of the estate tax to the living would be like having the IRS visit your home once a year, itemize all your electronics, jewelry, antiques, heirlooms, etc etc - any assets of value, totalling them up, and then asking you to cough up x% of the value. Don't complain! They aren't taxing you, just your estate, afterall.

There are a lot of ways for the government to properly and fairly collect taxes. We ought to narrow the methods used to only those that are efficient, fair, and logical. The Fair Tax stuff that's been promoted here looks like a great place to start.

I think the motivation for the estate tax is that the beneficiaries of the deceased are coming into money; any time when you make money seems to be a reasonable time to tax you (again, in cases like capital gains or lotteries or prizes or whatever). There certainly is a whiff of something unseemly about the whole thing -- I'll certainly grant you that -- but it does seem fair, since the paradigm I have in mind is something like "the government is a partner in whenever you make money."

But I would be the first to admit that the tax code in general is unfair. There's a lot that can be done about it. It's quite possible that we'll come to different conclusions, but the estate tax just doesn't seem like the right place to start.

The government is NOT my partner in making income. It never has been and never will be. At best it's a necessary expense that is used to pay for those activities that are the domain of government (police, fire department, roads, common defence, etc.). At worst, it's a confiscatory system that steals from one citizen in order to reduce the need of another to gain their own income.

Have you ever read any of the documents produced by our founders? I'm particularly fond of "Common Sense" by Thomas Paine. I suggest you read it some time.

The "partner in making income" was tongue-in-cheek. Of course putting it that way makes it sound pretty bad. But the point I was getting at remains -- it seems natural that, given that the government needs money, that it should be able to take some money when I make money. Other taxation systems are feasable -- maybe they take some percentage of my worth (Doomsday book style), or maybe they only take money when I spend it -- but this is the system we got.

And thanks for the reading suggestion -- I've been meaning to get to my high school reading list for some time now.

You should have actually read what they assigned... it's amazing what you can learn if you actually do the work.

It's nice of you to gesture toward a book that you assume I haven't read or understood as if doing so makes a point for you. I'm not sure what you have in mind by doing so, but I suggest that your next comment make some actual point relevant to the discussion at hand.

I would even grant you some logic in the "government as a partner" concept. To be sure, some degree of what we are able to do in business to earn money is enabled by some degree of the infrastructure and systems that are developed and created by government. E.g., no private investor funded the entire Internet - it's largely a result of government spending, ultimately tied back to taxation.

But this explains my interest in something like the Fair Tax idea. Consistently tie taxation to the activity of value generating commerce. The estate tax fails to meet this criteria. The transfer of funds is within a family; a redistribution of a deceased person's remaining assets to their designated inheritors. This certainly doesn't rely on government infrastructure or government processing to accomplish. In principle, it's the same as giving your teenage kid an allowance - only the scale differs.

1. The money has already been taxed (to death, ahem), already.

2. Death should not be a taxable event.

Maybe you have some strange beliefs about what happens after you die, but it's certainly not *you* that's being taxed when you die. It's your estate. And the difference isn't hair-splitting.

So do you oppose Medicare, Medicaid, welfare, the EITC, and other handouts? It's getting something for nothing after all.
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.

I'd like to leave something for my kids to build on. The state tax is particularly odious to small businessmen. You spend your whole life building up a business, which your children may in fact be helping to operate and somehow the government has a right to force them to liquidate. You may enjoy serfdom, I don't.

argument is simply not true, it does not happen in any real numbers with any kind of decent acountant. As for leaving money for your kids to build on, by the time most Americans die, their kids will likely be in their 60's+ already and should have their own nest eggs.

Tell that to the kids who don't get Christmas because the tax man destroyed dad's job.

I don't care if it's ONE. This is a DESTRUCTIVE tax and must be ERADICATED.

There's no tradeoff here. We're collecting two freaking trillion dollars in bloodsucking taxes a year. We can cut out this evil, socialist, disgustingly envious tax without any harm to anyone.
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.

What about the kids that don't get Christmas because their dad lost his good paying factory job to NAFTA/Mexico. We all know that free trade benefits the many at the expense of the few and the same applies to the estate tax. Very few estates pay it and even fewer (if any) are actually forced to go out of business because of it (again assuming a decent accountant). This tax is much less destructive than the AMT or payroll taxes, but yet it seems to get all the attention.

Nice try, but no stuffed doll. I specifically hit on one point in the comment you're replying to, that you don't address: "THERE IS NO TRADEOFF HERE."

Trade policies include tradeoffs. The Death Tax is simply punitive and destructive.
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.

The tradeoff was what you mentioned, 2 trillion dollars in taxes that benefit the vast majority of Americans (and likely those dollars also played a huge roll in the person's wealth in the first place).

Two trillion is the TOTAL of taxation in the US, of which the death tax is a drop in the bucket. Horribly destructive, minimally effective. It must be repealed.
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.

It depends on what you want your economic system to do. Capitalism is great for producing wealth, but few want completely unfettered capitalism. Without some legal safeguards, it can turn workers into serfs.

"Them that has, gets" is one of capitialism's traits. You're much better off being a resourceful person than one with little to offer. And money is included in resources.

Without some way to disperse the fortunes of very rich families, we could get a more plutocratic society. Upward mobility is limited if personal merit can't compete with the starting position that an enormous inheritance gives.

Of course there are limits to this. Plunging successful small businesses into bankruptcy is not a good thing. Nor do we want such a high death tax that it discourages wealth creation in general. I think it's obvious the death tax should be reduced. But abolished? I don't think so.

Ah, I see. So the goal here is actually to fight Capitalism in the name of the proletariat. And what better way to do that than to soak the bourgeois captialists through punitive taxation?

Of course, once you part ways with Marx, you'll actually see that the key trait of freedom in the marketplace is that: "He who works well, gets."
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.

... when you're reduced to name-calling. Would you also characterize child-labor laws and union-formation laws as Marxist? Not that I'd defend every jot and tittle, but the core concepts are reasonable restraints on unfettered capitalism. We do this regularly, for the sake of what we perceive as the social good.

Capitalism is a wonderful economic system. Whenever two people trade freely and knowingly, they both get something of higher value to them than what they had. What could be better? But "freely" and "knowingly" are conditions.

"He who works well, gets."? Unless you're defining "works well" as "gets", it's a very difficult argument. Consider the coal miners of a century ago, who were reduced to peonage. In more recent terms, consider the relative advantage of having a family who can give one a 4-year college education, and a family who can't. The disadvantage isn't insuperable, but someone's going to have to work a lot harder to obtain the same benefit. The market is not a meritocracy; its inherent goodness is linked instead to the trade argument above.

You're right of course, that we don't currently need to shift our laws towards more government control in general. The disaster of the welfare state of the 70's should make that clear enough to everyone. We've a long way to go in the opposite direction. Just do keep in mind the goal is the best economic system, not necessarily the most unfettered one.

The fastest way to a more plutocratic society is to do exactly what we're doing now: regulating business and capital so that more and more of it flows overseas and to private ventures. The very largest fortunes are not significantly affected by the inheritance tax. On the other hand, it's an absolute killer for first-generation entrepreneurs. Your proposal will work to entrench the large fortunes that currently exist, and prevent the formation of new ones. The latter is the only way for us to prevent a more plutocratic society.

Don't forget that there are only a few hundred American billionaires. The asset base that they control is small compared with what the rest of us own through our pensions and 401K plans. I think the rise of plutocracy is frankly inevitable in the US because running businesses for the purpose of producing a predictable and relatively high rate of quarterly returns (which is the effect of corporate governance by mutual fund) is not a way to get globally competitive businesses. As a result, the larger holders of capital will move more and more to private equity, and they will get phenomenally richer than they are now. They will also have the intelligence and the capability to keep this fact from becoming widely known.

We all know that free trade benefits the many at the expense of the few ...

We do?

This seems to be an odd challenge. You argue that if only one child doesn't get Christmas because his father lost a job because of his small business was closed down by death, then we should abolish the tax. But that's a ludicrously high standard -- people lose Christmas for all kinds of reasons.

You then say somewhere downthread that the estate tax is different because it's a "purely destructive" tax. What does that mean? Aren't all taxes destructive for the people that have to pay them? And aren't all taxes purely creative (is that the right word?) for people who benefit from them?

If you're trying to say that we should abolish this tax if even one person loses their Christmas because of it, you should evaluate the counterfactual of what would happen if we abolish the tax. The government would lose billions of dollars. What about the Christmases of the children of federal employees? What about the Christmases of people on the various social programs that the taxes like these fund? What about defense? You can't just pull billions of dollars from the system, point to the supply side of things (which, let's be honest, is in this case mostly the very wealthy) and declare victory.

Why can't I achieve victory that way? Last I checked, people by default are entitled to their property, not the other way around.
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.

Well, determing what people deserve will get us into the discussion upthread about desert. But, in short: it's not at all clear that you're entitled to all of your property, since you (I'm assuming) think that it's reasonable to give up some of it in taxes. Now we're debating *how much* of your property you owe. Second, it's less clear that you're entitled to your parents' property than that you're entitled to your own. This isn't a tax on dying (as if you can tax the dead), it's a tax on their estate. It's a tax on inheritence -- and if you're okay with the government being able to take some of your money when you make money (such as on income or capital gains), this seems very much analogous -- more fair, if anything.

There are estate laws in every state that make it very clear who is entitled to your property when you die. In Illinois (and I assume most other states) it goes something like this:
1. Any taxes due (income, real estate, estate, etc.)
2. Funeral expenses
3. Medical expenses related to your final illness
4. Probate attorney fees
5. Executor or administrator fees.
6. creditors
7. If a will is present the remainder is distrubted as stated
or
7. If no will, distribute to family based on set rules and percentages.
a: a spouse gets 50% if there are children 100% if none
b: Children divide their 50% (or 100% if no spouse) equally with right of survivorships
c: if no children, parents and siblings get equal shares.
d: nearest living relatives in equal shares
And a bunch more variations I won't get into.

Obviously, there are laws about how to handle estates. But that's not what we're arguing about here -- we're arguing about whether the government should be allowed to tax the estate. Saying that the government is entitled to a piece of the pie before it goes to creditors/family/attornets/etc. seems perfectly compatible with what you say.

Another good try. But you're knocking down a stray man. I said nothing about whether people DESERVE what they have. I merely claimed they're ENTITLED to it.

Or do you think property exists ONLY at the pleasure of the state, to be taken at will without recourse? It seems to me that the fourth amendment runs counter to that.

And are you sure it's an inheritance tax? My understanding is that it's an estate tax; that is, it taxes the property before it's ever transferred to anyone else.

As for other taxes, I oppose capital gains taxes, and can live with income taxes (though I oppose our current, extreme levels of so-called progressivity). More generally, I oppose this idea that if it's OK for government to impose one tax, that it becomes by default acceptable to impose ALL similar taxes.

Government isn't ENTITLED to any taxation. What they get is what we grant them. And I don't think we ought to grant them more than one tax, and we ought to choose that one tax on the basis is fairness to all Americans, reduction of distortion of the economy, harmonization with our values, and minimization of externalities.

The death tax fails because 1) its cutoffs are a form of Marxist class warfare, 2) its arbitrariness is so unfair, it's already required all sorts of other new taxes to prop it up, 3) IT's anti-family, and 4) the costs of enforcing, complying, planning for, and cleaning up after the taxes are enormous compared with the amounts collected.
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.

I'm not sure what your distinction between deserving and entitlement is buying you. I was originally using those terms as synonyms. Maybe "desert" relates to ethical considerations, and "entitlement" relates to legal considerations. But in that case, the question of what the government is entitled to is fairly trivial, and can be looked up in the tax code. So it's desert we've been discussing all along, anyway. And it's pretty clear that the government deserves some of your money, if they owe you a certain level of service. It doesn't follow from this that the government grants you property at its pleasure (though that'd take us pretty deep into political philosophy). But maybe I just misunderstand you about the entitlement/desert distinction.

(And, yes, it's the estate that's taxed, but it's the beneficiaries that pay it, in the sense that they won't receive money they otherwise would. The distinction between the inheritors paying and the estate paying may or may not be an interesting one; but in any case, the dead guy certainly doesn't pay it.)

As for your arguments at the end -- I just reject that setting cutoffs make it a form of class warfare. I'm not really sure how to convince you if you believe that -- do you think that having different tax brackets is a form of class warfare? Do you think that child tax credits are warfare against the infertile? Our tax system is anti-egalatarian, but with good reason. (If you were right about 4, by the way, I would concede my point right away -- I'd be interested if there are any studies about this.)

Yes, in fact, I do think child tax credits are a an attack on the infertile. I was never impressed with the whole Clinton Administration idea that if we give out tax CREDITS to what we like, it's somehow more acceptable than the equivalent idea of adding tax DEBITS to what we don't like.

As for studies on the externalities of the death tax, let's see what I can find for you... I'm pretty sure one of those big think tanks did a study. Ah, thank you ask.com, finding me a post of RS's own Pat Cleary on the subject.
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.

See, the problem with relying on Google (or Ask.com) is that I can always find a study from a "non/bi-partisan" group that supports my side. In your case, you linked me to a partisan site that linked to a Republican-chaired committee report. Yet it wasn't hard to find this as a rebuttal.

I guess what I meant by proof is something more academically repsectable...

The article you link to refers only to compliance costs, not the total externalities, or costs to society, of the tax.
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.

To be sure, the site quoted a number of studies with different methodologies. But at least the Rutgers study considered the "all the various public and private costs associated with estate tax compliance."

To be sure, there's a lot more work to be done here. We ought to track down all of studies cited from both of these sources and see what costs they are tracking and how. We ought to figure out just what these "costs to society" are (is paying money to H&R Block really a cost to society, or just to me?). I'm not saying this can't be done, and I'm not saying that the answer in the end won't agree with you. I'm just saying that proving your point would require more work than finding an interesting study on the Internet.

Having read the section about the costs of the estate tax in the study you linked, I'm now pretty sure that this does constitute a rebuttal. Again, I'd have to go back and follow through the studies they've cited (which it's safe to say I'm not going to do) to be sure, but in order to get to the cost they get at, they assume, citing an economist who suggests that cost of collecting the tax may approach its revenue, that the tax costs $1 to collect for each dollar in revenue (p. 17). It's not hard from there to make some distressingly hand-wavey assertions (mostly on p. 18) about the cost to the economy and make it come out unbalanced.

So, I'm still unconvinced.

I pick this word to remark on from your previous post because I sense that many opposed to the estate tax do feel it to be an "envious" tax. Who are the proponents of this tax supposed to be envious of? The dead person? The recipient of the dead person's estate who has just lost a loved one?

I think moderation is the answer here. Small businesses, small inheritances should be allowed. Anyone who thinks the Paris Hiltons of the world deserve to inherit a billion dollars whether they contribute to society or act like obnoxious bores is maybe not thinking too clearly.

Maybe there should be a maximum amount one is allowed to leave at death, say $250,000 cold hard cash and another 10 million in the form of a business. But it should be illegal to leave a business to someone like Paris who would only drive it into the ground and cost the employees their livelihood.

money left to you. If your conscience bothers you on this you may pass the funds onto me.

Then again you may regard inheritance as a person's right to transfer his or her assets, or do you deny the right, and if so where does it stop?

Inheritance is an intregal part of family and familial love, a bit different from a moocher waiting at his door for the mailman to deliver his check. Or a politician drawing a salary while figuring out new ways to screw the people paying him, and make them like it.

"a man's admiration for absolute government is proportinate to the contempt he feels for those around him". Tocqueville

I think you're overpaid. So much for opinions.

It's an even more odious tax than the estate tax and is only present to keep people from avoiding the estate tax by giving money to their children before death. But it has side effects.

Do you know that if you give your child a car (I won't, he's got to work for his), or give money so they can buy a house or pay medical bills or start a business, you have to pay taxes on the amount above $10,000? It's REAL easy to exceed that amount these days for reasons that you may consider good ones.

Easy: if we eliminate government interferences on family members helping each other out, we're encouraging families to stick together.

And what is wrong with that? It's not as though Washington bureaucrats are entitled to this handout or anything.
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.

That argument does not fly with 90%+ of Americans who could never dream of being able to afford giving a family member more than $10k (and if I remember correctly, both you and your wife can give the $10k and you could each give it to say a son and his wife, which would equal $40k). And if the 10k figure is too small, it could easily be increased by inflation every year to hold it constant. Elimination of the gift tax would simply make an incentive to cheat other income/payroll taxes.

So let me get this straight: because 90% (say you, with no documentation) of Americans can't give money to their kids, you assume they want to prevent others from doing so?

Talk about your classic radical left, 'class'-deterministic, sickeningly envious thoughts!
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.

The gift tax is aimed at ONLY 1 other tax, the inheritance tax. There is no INCOME involved, only a transfer of family wealth. The only tax being avoided by gifting is the estate tax.

My son't high school parking lot is FULL of cars costing more than $10K that were gifted by parents. I don't buy your 90%+ can't afford to give large gifts just on that basis.

"and if I remember correctly, both you and your wife can give the $10k and you could each give it to say a son and his wife, which would equal $40k"

You're making the assumption that both I and my child are married. But you still don't justify why it's OK to tax money that I've already paid taxes on just because I choose to give it to my son so he can pay for college.

The money in that gift is being taxed 3 times:
Once wuth the initial income of the Giver.
Once with the Gift Tax.
And Once with the income of the Givee.

"Always be honest with yourself even if you are honest with no one else...
...It helps you keep track of your lies..."
--Myself

...and leaves a messy estate is guilty of poor discipline. (For example, the Pritzkers, who by the way were notorious tax-evaders, and the Anna-Nicole Smith idiocy, which was only resolved by the expedient of mesmerizing our "incorruptible" Supreme Court Justices with star-power and sex appeal.)

Neither Gates (still a young man) nor Buffett will make similar mistakes. And if you take both of them at their word, their kids aren't getting anything.

But I am certain that Buffett's children ARE getting large inheritances. It's small compared to the $30 billion or so that Buffett is (was) worth, but I wouldn't say getting $millions is the same as "aren't getting anything".

And the Supremes upheld the terms of the last will left by Ms. Smith's husband. His son was attempting to invalidate the will so that she wouldn't get anything. The estate was left in good shape, the son just didn't accept the terms.

...was about how wealthy people in Hollywood and the Left are hypocrites on the issue of inheritance taxes. Seriously wealthy people generally compete with each other on the basis of how prestigiously they can give money away, not how much they can spend. It doesn't take very long for the novelty of consumption to wear off, and a football team (at only a few hundred million dollars) is just about the biggest thing there is that's worth buying. (Kirk Kerkorian wanted to own GM, and look at how rotten that's turning out for him.)

Bottom line, if you're a billionaire, your estate is not likely to face a difficult probate or estate taxes if you've done your homework. If you have heirs that don't get along with each other, that should have been taken care of in your planning.

About Buffett and Gates: I hedged by saying "if you take them at their word." Buffett has said he'd leave a small number of millions to his kids: that's not nothing, but it's pretty close. The Smith thing shouldn't have gotten as far the Supreme Court, but that's just my personal opinion.

The arguements that most libs give that this is only a tax on the wealthy is just wrong. As you said, the truely wealthy get this taken care of so their families don't pay the tax. The Kennedy trust fund is a great example.

And I wouldn't mind if you threw that next to nothing inhertance that the Buffetts will get my way. 8*)

You are both supporting and missing my point.

The issue is whether inheritance taxes are "proper" and the statements of the former president.

The discussion of actions the wealthy can take to reduce the effect of the IT are expected. The hypocrisy arises when those who lament the wealthy "not paying their fair share" take actions to reduce their tax burden.

I am not saying that the philanthropy and charitable giving is solely to obtain a tax deduction. My point was (and is) that if these persons truly believe that they are "underpaying" taxes, they would not tkae the deduction. Maybe they are not, but until I see their tax returns, I refuse to believe that.

They are hypocrites. Pure and simple.

"Everybody needs money! That's why they call it money!"

I am not saying that the philanthropy and charitable giving is solely to obtain a tax deduction. My point was (and is) that if these persons truly believe that they are "underpaying" taxes, they would not tkae the deduction.

I would say that philanthropy and charitable giving at very high levels are probably the biggest kind of moral vanity there is. Read the Board-of-Directors lists for the Met Museum or the Chicago Symphony. There aren't too many "anonymous" members, are there? And how about Ted Turner deciding to acquire the United Nations for his personal portfolio? Thank goodness he wimped out.

The behavior of the wealthy in regard to taxes is a reasonable and understandable response to the problem of ensuring that you or someone you have control over, gets to spend your money. Are they hypocrites? Well, maybe, but when was the last time you took at face value anything that these people say?

It's nice that Bill Gates and Warren Buffett chose to give large portions of their wealth to causes they feel are worthy. I'm THRILLED that they were ALLOWED to make such choices.

Did you happen to notice that they:
1. Avoided paying inheritance tax on the money they donated to the Gates foundation.
2. Recieved HUGE tax write offs for charitable contributions. (They won't pay a dime of income taxes for the rest of their lives.)
3. Rather enjoyed the great public acclaim for being philanthropists while they are alive.
4. Still control a large portion of that wealth.

Actually, thats one of the arguements for keeping the inheritance tax - it promotes charitable giving. :-)

Look - there are a lot of important things we do with our taxes, like maintaining the largest, strongest and fastest military the world has ever seen. Sure there is waste, pork barrel spending, etc. But do you think eliminating this tax is going to change that?

If I'm leaving $4 mil to my bratty, lazy kids then I don't mind paying 20% of that in taxes to support our government, our society, scientific research, etc.

I swear, some of you seem so selfish, or greedy. Sheesh!

I'd like to give my money to Catholic life services, instead of the government. The government is taking some of the money (so they can fund Planned Parenthood).

I'm leaving you your choices. Why won't you leave me mine?

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Even those who learn from history are surrounded by those doomed to repeat it.

is just about as bogus an argument that can be amde. "Society" didn't generate any of these goods. The taxpayers who financed them did. The fact that we still have some small trace of a capitalist vs. socialist economy is why there was the economic activity available to generate the taxes to pay for the good. To then turn around and tax the assets aquired with the residual from the income that paid the taxes in the first place is abominable. Also I don't give any real credibility to the pronouncements of the ultra wealthy regarding the estate tax, because they aren't paying it. When Warren Buffet or Bill Gates help me generate my estate, I'll listen to their opinion on how I should bequeath it.

You don't think that Clinton earned his money? Did he win a lottery?

"There are those who look at things the way they are, and ask why... I dream of things that never were and ask why not." George Bernard Shaw

Yeah, where DID he get his money then, if not by earning it the same way anyone else does: by providing services desired by others?

Come on...
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.

This isnt a Clinton slam. Im not sure any politician earns their money.

I may not like what he did as president, but being President for 8 years is hard work. But I imagine the bulk of the money he has comes from speaking engagements since, and that's honest work.
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.

people are happy to pay his rate for speaking engagements.

He also had to actually write his book. However dishonest parts of it may have been, he had to put it to paper.

Do you want ALL estate taxes and gifted taxes abolished or only when it applies to your children?

Oh I'm sorry, you lose. Next?
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.

I don't understand why you think that is an ad hominem argument.

If I will my estate to my barber, should it be taxed or not?

"There are those who look at things the way they are, and ask why... I dream of things that never were and ask why not." George Bernard Shaw

Ah, I see. That was jut poor grammar. You didn't mean if it applies to MY children; you meant whether it applies to ONE's children.

Very well then, I'll answer you: I want the death tax eradicated, period. I want the gift tax eliminated for gifts to family members.
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.

The gift tax is only aimed at getting one method of avoiding estate taxes so they should go together. Either you have them or you don't. So the argument is do people get to choose what to do with wealth they have accumulated (and paid taxes on) or not?

"And what about the argument that estate taxes are a means to combat the concentration of wealth? Do you disagree that estate tax combats the concentration or wealth or do you think that this isn't a problem?"

Yes estate taxes are intended to redistribute wealth. There is no other reason for them. Your question suggests that it's a bad thing to become wealthy. It's not. Most people (even those who promote class warfare) strive to become wealthy.

And yes, there are many other taxes that are also onerous. Perhaps you can agree that we should limit or abolish as many of them as possible?

The gift tax is only aimed at getting one method of avoiding estate taxes so they should go together. Either you have them or you don't. So the argument is do people get to choose what to do with wealth they have accumulated (and paid taxes on) or not?

so what if I choose to gift you some money and you decide to gift me some work? How does that sound? And if you think this is something people wouldn't do then you aren naive about the man's willingness to cheat.

Your question suggests that it's a bad thing to become wealthy. It's not. Most people (even those who promote class warfare) strive to become wealthy.

My question does no such thing. But there is little question that societies that allow money to accumulate at the top with little or no means of redistribution don't live for very long.

Perhaps you can agree that we should limit or abolish as many of them as possible?

Taxes are a means to pay for public services. Eliminate the public services, then we can eliminate the taxes. But before you start slashing various HHS programs, understand the drag that homeless and hungry have our society as a whole without those services is substantial.

"There are those who look at things the way they are, and ask why... I dream of things that never were and ask why not." George Bernard Shaw

"It's a tax that affects very few people, and the people that it does affect, are the most capable of absorbing it"

Gah! By that logic it should be OK to shoplift from Walmart. It will affect very few people and that Corporation is most capable of absorbing it.

The tax system is designed to prevent the average citizen from accumulating wealth. The death tax is just the last step in that process.

"Seems to me that there are so many other taxes that can be said to be far more onerous than this one. And yet so many people get up in arms over this one eventhough it will likely never apply to them or their children."

Gah! Another one! Of course it probably won't apply to most people. They've been having their money taxed from them all their lives! They haven't been given the chance to accummulate enough to even qualify.

If you want to support and defend this tax because you feel strongly about it, then why don't you just set up your estate in a way that you give whatever portion you desire straight to the government. They won't say no.

Gah! By that logic it should be OK to shoplift from Walmart. It will affect very few people and that Corporation is most capable of absorbing it.

Except taxation is not theft. As a condition to use the legal tender of this country and enjoy the benefits that our government provides to you, you accept that you must pay taxes. As such any comparison to theft are silly.

The tax system is designed to prevent the average citizen from accumulating wealth. The death tax is just the last step in that process.

This is so patently absurd I don't know where to begin. The tax system is designed to pay the bills for government services. Cops cost money, schools cost money, soldiers cost money, court systems cost money, roads cost money. You apparently wish that you weren't obligated to pay for these things.

If you want to support and defend this tax because you feel strongly about it, then why don't you just set up your estate in a way that you give whatever portion you desire straight to the government. They won't say no.

I find it ironic that at site that bristles at the mere mention of chickenhawking, this sort of argument is considered reasonable.

I'll tell you what. When my estate gets to a point where I need to worry about the estate taxes, I'll thank the Lord and worry about the problems of wealthy people.

"There are those who look at things the way they are, and ask why... I dream of things that never were and ask why not." George Bernard Shaw

"Except taxation is not theft."

Making a point by being absurd. But taxation (taking something from me that I may not of voluntarily given) isn't against the law because the taxation is imposed by those who make the law. Wrap your head around that one.

"This is so patently absurd I don't know where to begin. The tax system is designed to pay the bills for government services. Cops cost money, schools cost money, soldiers cost money, court systems cost money, roads cost money. You apparently wish that you weren't obligated to pay for these things."

Sigh, no. That's not the case. All those things are important - and I'd support taxes to a point. But I noticed that you didn't mention wonderful things like:
Every d@mn earmark put through every year.
The fact that the federal government is involved with my
local school
The REA - Rural Electrification Agency (because, you know,
there are a lot of farms out there iwthou access to
electricity).
I'd continue - but the list would be mighty long.

The Government - at all levels - designs the tax codes to take whatever they can from the middle class without them getting Boston Tea Party mad about it.

"I find it ironic that at site that bristles at the mere mention of chickenhawking, this sort of argument is considered reasonable."

It designed to show your hypocrisy. You are here defending a tax that you yourself wouldn't voluntarily donate too - even after you are dead and won't need it anyway.

Look, some taxes are necessary for the government to operate. But the government looks for every opportunity to tax something. So as a general purpose I oppose all taxes - knowing that they'll be there at some level all the time. But, to me, the lower the better.

"When my estate gets to a point where I need to worry about the estate taxes, I'll thank the Lord and worry about the problems of wealthy people."

That's really too bad.

Except taxation is not theft.

I anxiously await your attempt to differentiate between random bureaucrats taking my money through threat of force, and random thugs taking my money through threat of force.

As a condition to use the legal tender of this country and enjoy the benefits that our government provides to you, you accept that you must pay taxes.

I never expressly agreed to any such contract. Nor can I be said to have impliedly agreed to it, since I comply with tax laws only under duress (i.e., government forcibly confiscates my belongings at gunpoint if I refuse to pay what the taxman decides I owe). In point of fact I would gladly forego the use of worthless fiat money in favor of gold- or silver-backed private notes, and any and all other putative "benefits" government confers upon me save those I voluntarily paid for through use fees.

Cops cost money, schools cost money, soldiers cost money, court systems cost money, roads cost money. You apparently wish that you weren't obligated to pay for these things.

On the contrary, I want it acknowledged that no such obligation can legitimately exist in the absence of individualized consent. "We have to pay for roads, therefore government has to steal your money!" is a non-sequitur: if police, roads, soldiers, schools, and so forth are sufficiently valuable to people, then people will be willing to pay for them voluntarily, through use fees. Your belief, or the beliefs of government officials, that a particular public service is vitally important does not by itself imply any obligation on my part to pay for it, much less tolerate having my paycheck and my estate looted.

"I anxiously await your attempt to differentiate between random bureaucrats taking my money through threat of force, and random thugs taking my money through threat of force."

Because a bunch of random thugs aren't the government, which is invested with rights far beyond that of the common citizen.

An example would be criminal law. The government is allowed to punish wrongdoers. But if you imprisioned someone in your basement for a couple of months because he assaulted you, you'd soon be in prison yourself.

"Render unto Ceasar's what is Ceasar's..." When it's your face on the dollar bill, and your flag over the land, we can talk about you having an unassailable right to it.

Of course that doesn't meant the government should be corrupt and confiscate everyone's stuff. But the question should be "Is the death tax good government?" instead of "How dare the state take my property?"

Because a bunch of random thugs aren't the government, which is invested with rights far beyond that of the common citizen.

The idea that theft is legitimate if only some people elect the thieves and call them, collectively, "government" is thoroughgoing imbecility.

When it's your face on the dollar bill, and your flag over the land, we can talk about you having an unassailable right to it.

"We should pay taxes because that's the way it is." Well, heck! I'm convinced!

Of course that doesn't meant the government should be corrupt and confiscate everyone's stuff. But the question should be "Is the death tax good government?" instead of "How dare the state take my property?"

There is no case in which government-sanctioned theft of private property is good government.

The estate tax is wrong because it's taxing money that has *already* been taxed once, when the person earned it. In some states, it's possible that your heirs would inherit as little as a third of what you earned in the last year of your life. It's a ridiculous double tax and dead wrong.

The estate tax is also wrong because it is pointed ONLY at a certain class of people. Regardless of whether they are "capable" of absorbing it or not, it's still wrong to aim a tax at just one group. Maybe we should add another 10% tax on everyone with a last name starting in "Z" -- I mean, that's only a few people, right? Would you find that fair? Maybe we should eliminate the floor on the estate tax and make it affect *everyone*. Would you find *that* fair? (I'd find that fair, BTW - if we can't eliminate the estate tax, then we should do this, IMHO...)

The whole argument about combatting the so-called "concentration of wealth" is wrong. If I work hard to earn my money, I damn well better be able to keep my money. If I know my money is going to be stolen from me in some misguided attempt to avoid "concentration of wealth", then what the hell is my incentive to work hard to earn it in the first place? The quality of work goes down, the quality of life declines, and the amount of wealth to go around gets reduced, and the poor people remain poor anyway. It's one of the most ridiculous and poorly thought out concepts I've ever heard of in my lifetime, and demonstrates a total lack of understanding about how economics works.

The gift tax is just as bad as the estate tax for the same reasons. It only exists to prevent people from bypassing the estate tax anyway, so get rid of that too.

My *sole* objection to eliminating both of these taxes is that the government *must* cut spending to match the reduced revenue. Something I no longer trust either party to do. Other than that, and even though these taxes will likely never effect my own paltry estate, I think they have to go. They're unjust, unfair, and just plain wrong.

The estate tax is wrong because it's taxing money that has *already* been taxed once, when the person earned it. In some states, it's possible that your heirs would inherit as little as a third of what you earned in the last year of your life. It's a ridiculous double tax and dead wrong.

The money you earn is taxed numerous times. It's also taxed numerous times after you spend it. As a matter of fact it is taxed EVERYTIME it changes hands. You wish to change one instance so that you WON'T get tax during a exchange.

The estate tax is also wrong because it is pointed ONLY at a certain class of people. Regardless of whether they are "capable" of absorbing it or not, it's still wrong to aim a tax at just one group.

Being wealthy isn't a class of people. And to try to make this a discrimination issue is surreally absurd. The wealthy already pay the vast majority of our taxes. They will do so whether there is an estate tax or not. Why? Because they can do so more readily than the poor.

I know my money is going to be stolen from me in some misguided attempt to avoid "concentration of wealth", then what the hell is my incentive to work hard to earn it in the first place?

You guys sure like your colorful imagery. The dangers of wealth concentrating at the top are very real. And I'm talking about creating some wealth redistribution scheme to punich successful people. But the estate tax was established, in part, to deal with the burgeoning arisocracy that was forming in this country at the beginning of the 20th century. And how people can possibly think that creating an aristocracy in quest for the Holy Grail of "fairness" is a good idea, I have no idea.

"There are those who look at things the way they are, and ask why... I dream of things that never were and ask why not." George Bernard Shaw

... eventhough it will likely never apply to them or their children

Maybe you've found the secret silver lining to your opposition in that thought. I daresay most of the people verbally assualting the estate tax may not be encumbered by it under today's criteria. So you have to wonder, why argue against something that will never affect us - will only affect "rich people"? But it's not irrational, it's the application of a reasonable principle of fairness.

Look, no one is saying the wealthy ought to get away with paying zero taxes, ever. The reaction you see here is one based on despisement of the current taxation regime and the complicated, inconsistent, piled on rules and regulations of the past century. Do away with all the special situations and pick up something like this Fair Tax. If I recall, the idea is we tax all purchases (exempting those below a certain level whose purchases may be seen as genuine necessities of life). Rich people buy a lot of stuff. Middle class people spend quite a bit less. Kill all the crazy loopholes and deductions used to skirt taxes, and just take the money at time of purchase. Joe Double Comma will pay his share on the caviar and yachts he buys. Joe Steel Mill can pay his on the Oreos and fishing rod he buys. Sound reasonable?

"And yet so many people get up in arms over this one eventhough it will likely never apply to them or their children."

With the upswing in real estate value(s) and the ability to earn more disposable income - coupled with better ways to save and the propensity of the elected to expand the target of such taxes - this concerns far more people than it was originally 'designed' to.

But, even if the 'target' group remained consistant, it is still arguably unfair and warrants either a 'Fair Tax' approach of hitting everyone with an equal percentage or nothing. I endorse a cut taxes/cut spending approach mentioned elsewhere in this thread.

fairness in taxation.

FTR, the Fair Tax is a shell game.

"There are those who look at things the way they are, and ask why... I dream of things that never were and ask why not." George Bernard Shaw

Taxation at an equal percentage to all regardless of socio-economic status.

I am an investor and a saver. I don't buy new cars, new houses, nor frivolously spend our hard earned income. So, in light of these character traits, I support the Fair Tax plan.

I understand the floor was established in the Fair Tax to cover essential living costs. I don't like it, but, I understand it and can live with it. I believe the simplification of the overall tax code and collection system coupled with the elimination of so many loop holes will make the system a bit more workable than a 'shell game'.

And again, I am in favor of a cut taxes/cut spending approach. Program elimination should start at the same percentage we are taxed (e.g. 20% taxes, cut programs that benefit less than 20% of Americans. A balance can probably be found around 17%.)

You could categorize any tax reform as a "shell game."
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

The ones that claim they will simplify the tax code but will create a rebate system in which every tax payer would get a stipend to cover cost of living items.

They thought the income tax system was simple too when they first implemented it.

I could live with a VAT tax replacement of the income tax if it could be shown to work.

But the fair tax makes so many assumptions that are realistic that you can't even consider it a possibility.

"There are those who look at things the way they are, and ask why... I dream of things that never were and ask why not." George Bernard Shaw

Everybody gets a refund for $X. It doesn't matter what you spend. You don't have to save receipts or prove anything.

Can you explain how that is more complicated than our current system where everyone has to figure out their own income from all sources and what deductions and credits they qualify for, then what their tax liability is in a totally separate system called AMT? I have to wait for a dozen pieces of paper to come in the mail from various people just so I can start to prepare my return.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

The rebate you get is based on the number of dependents you have.

I certainly agree that the current tax law is far too complex. But I don't see how changing it necessarily fixes anything because politicians would still be in charge and they would still muck with it to suit their purposes.

Honestly I haven't looked at it in a almost a year(back when MerrillBender was shilling it here every couple of weeks) so I would need to spend more time to really get into the details of what's wrong with the fair tac

"There are those who look at things the way they are, and ask why... I dream of things that never were and ask why not." George Bernard Shaw

That is one part of the tax code that requires no information or documentation to be obtained from anyone else. Is it really hard to know how many kids you have and what your custodial arrangement is?
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

Because the government will need to be able to verify this information AND ensure that the dependents aren't ALSO collecting the same tax rebate.

And since it would be revenue neutral, you would be enticing poor people to have more kids.

"There are those who look at things the way they are, and ask why... I dream of things that never were and ask why not." George Bernard Shaw

We already have dependents in the tax code. You need to have SSNs if you want to take deductions for your kids. Those SSNs can be (and are) crosschecked against other returns. What's the difference? Add to that there are a boatload of other child related tax credits and deductions that all make this much more complicated right now than what you are describing.

I would be all for making it a per household thing instead of a per person thing, but you know politicians, they love giving the parents free stuff to buy their votes. Those who are unmarried or without kids always get ripped. That's just life.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

I'm not saying that the Fair Tax, as currently laid out, is more complicated. My point is that the Fair Tax advocates a massive change to our tax code which will, at best, cause a revenue neutral change to our receipts and will STILL have plenty of areas in which complex exclusions and benefits can be thrown in.

"There are those who look at things the way they are, and ask why... I dream of things that never were and ask why not." George Bernard Shaw

We can make it as complicated as we want... though the same goes for any tax system.

Even the sales tax in this state, with no rebate, is complicated by ridiculous rules like no tax on tea bags but loose tea being taxable and bread baked in the store is taxable but bread baked in a factory and sold in the very same store is not. It's stupid, but probably inevitable.

I really don't care much about how complicated it is... it is unlikely to ever approach the complexity of our current system, since you are removing a lot of very complicated parts from the system.

I mainly want it because it puts me in control of what I pay in taxes (by spending) and creates an incentive to save (rather than an incentive to leverage as much as you can and spend it all now). It is also much harder to avoid. You can't live a millionaire lifestyle and pay nothing in taxes as so many millionaires manage to do now.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

...as we define it in America consists precisely in the tax laws that are on the books and accepted by the electorate. The fact that they are heavily skewed in favor of special interests is just one of the interesting features of popular democracy. (I won't bore you with the conservative interpretation that this is "corruption," and therefore a cardinal justification for limited government.)

You've strongly advocated the principle that large accumulations of wealth are bad per se and should be avoided through the instrumentality of government confiscation at death. And your reason for this position is that "aristocracy is bad." (I've usually seen this argument alongside historically-illiterate comparisons to the French Revolution, but to your credit you refrained.)

As I said upthread, there are only a few hundred billion-dollar fortunes owned by Americans, and they constitute a small part of America's total wealth. And in any case, these fortunes are not affected by the inheritance tax in the slightest. The real problem is the successful first-generation entrepreneurs who are not able to pass on their relatively small fortunes. Inhibiting the formation of new wealth in this fashion does not have the effect of preventing the rise of an aristocratic moneyed class. It has the opposite effect, by denying to ordinary people the ability to move up the economic scale, thus entrenching the power and position of the few who are already at the top.

I think your stated goals would be far better served if you simply advocated a policy of confiscating all wealth above a certain large threshold, and eliminating the possibility of creating charitable trusts, university endowments, private equity funds, and other such vehicles.

You of course will need to answer the obvious objections to this. Two that I can think of are: 1) it's unconstitutional, and 2) our elected leaders, who are for practical purposes the employees of aristocrats like George Soros, will not be permitted to do it.

Let me respond.

As I said upthread, there are only a few hundred billion-dollar fortunes owned by Americans, and they constitute a small part of America's total wealth. And in any case, these fortunes are not affected by the inheritance tax in the slightest. The real problem is the successful first-generation entrepreneurs who are not able to pass on their relatively small fortunes. Inhibiting the formation of new wealth in this fashion does not have the effect of preventing the rise of an aristocratic moneyed class. It has the opposite effect, by denying to ordinary people the ability to move up the economic scale, thus entrenching the power and position of the few who are already at the top.

Well I would like to know how many 1st generation entrepreneurs are affecting estate laws. Let's remember that for the estate tax to come into play there must be a NET gain of 2 million dollars. So a business must be valued at 2 million dollars over outstanding debt and that is assuming a single inheritor. And this ignores even rudimentary accounting tools that can shield an estate. So while I'm sure that it does occur I suspect it is a pretty small number. 80% of those who pay estate taxes have estates over 5 million.

My objective is not to take all the rich people's money when they die. But I do think that we should have SOME mechanisms to control this sort of wealth accumulation. I'm not talking about solely the Soros' and Gate's but they are illustrative examples. I don't want to take all of Gate's 50 Billion away from his family. But I also don't see why half can't be take away. And this is true of the multitude of 100 millionaire's out there.

"There are those who look at things the way they are, and ask why... I dream of things that never were and ask why not." George Bernard Shaw

"My objective is not to take all the rich people's money when they die. But I do think that we should have SOME mechanisms to control this sort of wealth accumulation. I'm not talking about solely the Soros' and Gate's but they are illustrative examples. I don't want to take all of Gate's 50 Billion away from his family. But I also don't see why half can't be take away. And this is true of the multitude of 100 millionaire's out there."

Your starting point is to NOT take ALL of rich people's money (I mean, gosh, you're the ones who actually earned it). Your starting point is to take half (cause, uhhhh, so many others are less fortunate and could benefit from the wealth you generated.....you know what I mean).

My question to you is why only half? Why not 75%? Or some other absurdly stratospheric percentage? It's only a negotiation right? A little give and take? More like a lot of take and a little pittance of give to show you're looking out for the wealth generators in society, right?

I'm just sayin'...........

The 50% is just a point of discussion. Whether it's 50% or 5% is tangential to the discussion.

One more time. YOU are not being tax with the estate tax. You are dead.

"There are those who look at things the way they are, and ask why... I dream of things that never were and ask why not." George Bernard Shaw

Your qualifier of not wanting to take ALL of someone's accumulated wealth, but, just ....... half. I found that worthy of comment.

You are right though. I'm not being taxed when I'm dead. But, the attitude of 'leaving the problem to someone else doesn't fly with me either.

We are to be good stewards of our riches, regardless of their size or perceived value. Simply making sure those riches are able to be passed on to whom I choose is a fight worth fighting.

And since it is very possible my estate has the potential of hitting $5,000,000........FIGHT ON!

You're looking to assign some sinister soak the rich agenda to me that simply isn't there. I honestly don't care about the wealthy except from a public policy standpoint.

And you just showed the fundamental problem. There are many people who fight against this because they HOPE that one day they will need to deal with this sort of problem but they ignore the fact that, in the event that they do become that wealthy, they will most likely come up with a way to circumvent the tax anyway.

"There are those who look at things the way they are, and ask why... I dream of things that never were and ask why not." George Bernard Shaw

My objective is not to take all the rich people's money when they die. But I do think that we should have SOME mechanisms to control this sort of wealth accumulation.

You still haven't explained why we need to control wealth accumulation. Do you honestly believe that large fortunes are maintained at the expense of everyone else? The best way to become a successful entrepreneur is to figure out a way to give people something there are willing to buy. That's not a bad thing (or is it?). Don't forget that you can count on not too many hands the number of people who become billionaires in one working lifetime. A very successful entrepreneur in my book is someone who manages to put together maybe 50 or 100 million dollars.

So what does he do? He passes it on to his heirs, and they now have the opportunity to turn it into a serious fortune. How? By making it available to other entrepreneurs through the various investment vehicles that are available to people at that level. That's not a bad thing either (or is it?)

What you're really proposing is to remove from wealthy people the ability to decide how to invest their own capital, and to put that decision... where? Well, your stated goal is "fairness," and prevention of an "aristocracy." So that means in some unexplained way, it's good in itself to prevent certain lucky people from being able to dispose of large amounts of capital. I still want to know why this is bad (or at least I'd like you to say it in plain language), but what is the practical effect?

Since you really can't flush the capital down the toilet, it has to go somewhere. So you would have the government spend it. In what way does this produce more fairness or less aristocracy? It would dissipate all the capital which today is used to fund new enterprises, and spend it instead on what the government buys. Which to a first approximation is monthly payments, health care and pharmaceuticals for the elderly. (Are you a doctor or a home-healthcare provider, Hawk?)

The end of this game is to produce a truly untouchable, unreachable, and unaccountable aristocracy among the people who control how the government spends money. And that is today's billionaires. By capping the ability of even miniscule fortunes like $5 million to cross generations without taking a 55% haircut, you're inhibiting the creation of new wealth, and making it progressively harder for even the $5 million mini-fortunes to come into being in the next generation.

In thinking about your argument, I went through a thought-experiment in which we truncated all private fortunes at $500 million. I stopped when the stock and bond markets ground to a halt, flooded with sell orders, and all the investment capital in the US fled overseas to beat the deadline. So I'd have to say that you're stuck with the presence of hyper-rich people for the forseeable future. My concern is the unintended consequences of preventing millions of normal people like yourself from accession to wealth, which really means nothing more than the ownership of productive assets. Remember, a $50 million fortune (after taxes) isn't as much as some might like to believe. And even a completely ordinary, non-entrepreneurial middle-class individual would have to be getting some seriously bad advice to end up at the end of his working life with less than $1 million in the bank. If we seriously constrain the ability of people to pass on these fortunes, we'll be doing far more harm than good, and not achieving your goal of preventing aristocracy in the first place.

Man I wish I had said That!

You still haven't explained why we need to control wealth accumulation. Do you honestly believe that large fortunes are maintained at the expense of everyone else?

I didn't realize you wanted me to.

Wealth concentration will naturally lead to an aristocratic class. This class, eventually, becomes a lazy group that is doing little but drawing wealth from society. Think of the Roman ruling class or Russian Csars of the 19th century. Obviously those are more extreme cases but it is something to be mindful of.

Since you really can't flush the capital down the toilet, it has to go somewhere. So you would have the government spend it. In what way does this produce more fairness or less aristocracy?

Well I'm not necessarily looking to have the government spend it. Let's assume, for the sake of argument, that outlays remain flat. By taking in this largesse from the wealthy the government can then reduce taxes to others who are actively producing for society. You can reduce taxes for your economic class of choice. And let's not go down the path of "Well the government will just spend it so let's act like it's extra money" because you can make that argument about ANY tax EVER.

. By capping the ability of even miniscule fortunes like $5 million to cross generations without taking a 55% haircut, you're inhibiting the creation of new wealth, and making it progressively harder for even the $5 million mini-fortunes to come into being in the next generation.

Huh? Why should we believe that the children of a wealthy person are any more capable of creating wealth than anyone else? Because they won the genetic lotto?

Your last paragraph is simply an argument that the current estate laws have too low a floor. That may be so but that argument implicitly accepts the premise that the estate tax is a valuable tax policy.

"There are those who look at things the way they are, and ask why... I dream of things that never were and ask why not." George Bernard Shaw

Wealth concentration will naturally lead to an aristocratic class. This class, eventually, becomes a lazy group that is doing little but drawing wealth from society. Think of the Roman ruling class or Russian Csars of the 19th century. Obviously those are more extreme cases but it is something to be mindful of.

There are plenty of people at the low end of the economic scale who do little but draw resources from society, too. Most entrepreneurs who create significant wealth during their lifetimes have the presence of mind to tie the hands of their heirs to a significant degree. The result is that most inherited wealth is invested carefully and conservatively, by professionals. Are you saying that the whole problem arises because a small number of people are born not needing to work, and therefore are tempted to live slothful and indolent lives? So fundamentally, then, your whole concern is with encouraging the work ethic? Somehow the moral victory of forcing Robert Wood Johnson IV or Sam Walton's numerous children to take day jobs just doesn't seem worth the destruction of the investible capital that their inherited fortunes represent.

Or perhaps you resent the fact that Paris Hilton is a stupid twit?

Or perhaps your citation of Roman and Russian elites means that you really are thinking of the danger of armed uprising among the great downtrodden American masses? Take away their ability to create small fortunes and pass them on to their children, and you'll bring them a hell of a lot closer to armed rebellion than they are now. Do you seriously fear that the presence of wealthy people in America will destabilize our society? And do you seriously believe that really rich people aren't smart enough to keep their wealth out of the public eye?

Well I'm not necessarily looking to have the government spend it. Let's assume, for the sake of argument, that outlays remain flat. By taking in this largesse from the wealthy the government can then reduce taxes to others who are actively producing for society. You can reduce taxes for your economic class of choice. And let's not go down the path of "Well the government will just spend it so let's act like it's extra money" because you can make that argument about ANY tax EVER.

I'm not seeing how this makes any sense. The government needs to get funded every year. If you take a big whack off of the country's capital stock and just displace some current taxation with it, then what are you going to do in the future? You've spent the money and dissipated it, and now it's no longer available to create new current income. If you propose to have the government get into the venture capital business and maintain the money it confiscates as an investment pool, then I can't think of anything that scares me more. That's how the Chinese run their economy, and they are well aware of the defects of that model. So aware in fact, that they take their excess capital and park it here.

Huh? Why should we believe that the children of a wealthy person are any more capable of creating wealth than anyone else? Because they won the genetic lotto?

Re-read what I said. Vast experience shows that the children of successful entrepreneurs are very rarely capable of carrying on the family business. That's why most successful guys make sure their kids and their wives can't spend their money freely. They tie it up in trusts and charitable foundations, where it gets invested by pros. And what do the pros invest it in? A lot of fixed income, a lot of private equity, and a certain amount of new ventures. That's how brand new fortunes get created by the next generation of entrepreneurs, which was my point. It's also how $50 million fortunes turn into billion-dollar ones after a few generations.

Your last paragraph is simply an argument that the current estate laws have too low a floor. That may be so but that argument implicitly accepts the premise that the estate tax is a valuable tax policy.

Nice try, but I said nothing of the kind. I don't think the estate is valuable in any way, shape or form. By and large, however, the people who really matter in this country, namely the hyper-rich (who don't pay inheritance taxes) and their servants in the political class, don't agree with me. However, my real goal was to understand your reasons for wanting a high amount of wealth confiscation at death. Given the extremely high cost of such a policy, I need a lot of convincing that what you offer in return is worth it. So far you've offered only weak reeds.

I would like to respond to this but I have limited time. Hot date tonight. I will try to respond, if the diary is still relevant, tomorrow. But if isn't then all I can say is that you are wrong, as usual blackhedd. :)

"There are those who look at things the way they are, and ask why... I dream of things that never were and ask why not." George Bernard Shaw

...so it's probably not sporting to respond. However wrong you think I am, you still haven't made a case that wealth is a bad thing. I think you're operating from irrational fears about concentrations of wealth, but I'm waiting for you to connect the dots.

I won't tire of arguing against the estate tax. However, for what it's worth to you and others on this thread, I do happen to believe that America is indeed moving toward a dangerous inequality of wealth. But it's not because the truly wealthy have too much: someone else made the point (completely obvious to anyone but a devoted class warrior) that capitalistic economies are not zero-sum games. Rather, it's because investment opportunities are starting to fade for the vast middle of the population.

This is offtopic (and probably deserves its own diary), but I greatly fear that by overregulating business and capital, our government is destroying the basis for future prosperity for the great middle class. You worry about resentment of the hyper-rich. Well, you ain't seen nothin' yet! Because of the twin factors of overregulation and concentration of public-equity ownership by mutual funds and other financial institutions, American businesses are losing global competitiveness. There still are incredibly good, historically good investment opportunities out there, but most Americans will have no access to them. Rather, the benefits will go (are going) to private equity holders, who will bypass the public markets and start getting rich beyond belief while the rest of us stagnate. And as I hinted upthread, they will make darned sure that neither you nor the media will hear anything about it. Because after enough time goes by, the possibility of revolt will be real.

Americans will not rebel because a few people are rich, Hawk. But they definitely will rebel if they start feeling poor themselves. And well-intentioned liberal policies such as you advocate will contribute mightily to this happening.

http://devine-gamecock.townhall.com
www.race42008.com
"Within the covers of the Bible are the answers for all the problems men face." - Ronald Reagan

Wealth concentration will naturally lead to an aristocratic class. This class, eventually, becomes a lazy group that is doing little but drawing wealth from society. Think of the Roman ruling class or Russian Csars of the 19th century. Obviously those are more extreme cases but it is something to be mindful of.

Nice theory, but the facts show the exact opposite. If you examine the wealthiest individuals in this country, you instead find a group of people who are not at all what you describe, but instead who *drive* more industry and business and charity, which generally benefits the rest of us even more.

You also seem to be under the misguided assumption that wealth is a zero-sum system and has a kind of maximum limit. That if some people have a lot of wealth, it reduces the amount of wealth available for the rest of us. Which is simply not true in our type of society. Our economic system is, instead, a positive-sum system where everyone who puts the effort in can generate their own wealth.

If you really want to justify stealing half of someone's estate, you'll need to come up with something more substantial than a lame "gotta stop the non-existant aristocracy" claim.

if you suggest to someone that there is no such thing as concentration of wealth, and if they don't believe you, then it can really help you save a lot of time by knowing where the conversation will go from there.

Where you are coming up with your inferences.

I never said that the wealthy in this country represent the aristocratic mindset that should be avoided.

I also never said that wealth is a zero-sum system. But there is little question that relative wealth can be distributed in various levels. It is foolish to suggest that wealth cannot concentrate at the top and that such concentration can make the poor relatively poorer.

As for you last comment, most of the people on this site condemn the use of self-righteous rhetoric by the left, and not without reason. However the repeated use of terms such as theft and stealing is nothing more than an attempt to claim some sort of moral high ground in this debate. I am NOT justify stealing anything. If you don't want to pay taxes, move to the Caymans.

"There are those who look at things the way they are, and ask why... I dream of things that never were and ask why not." George Bernard Shaw

that only a few people are affected by the estate tax and that they're all about the same.

Some estates may be farms that can easily have over $2 million in assets but which don't really have a very high annual profit margin, and to force the sale of those assets to pay the estate tax is to effectively shut down the family farm.

This happens with stands of timber, too. Someone with lots of land who leaves it to their grandchildren may have left them with a potential timber harvest greater than the exemption but to levy the tax on the estate is to force that harvest, which would seem to go against the environmental concerns of the people who favor estate taxes so much.

You are going to have a really hard time getting me to weep for rich farmers who may have to sell off land after making their living on the backs of taxpayers and consumers their entire lives. No farmer out there of any decent size doesn't take a lot of handouts from the government, directly (such as "disaster" payments) and indirectly (such as crop insurance). Farmers also get price protection from imports and can collude to fix prices for their crops without getting busted under anti-trust. And don't forget about the illegal labor they can make use of, no questions asked.

Sorry, I don't have much sympathy for the multi-million dollar "family farm."
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

All farmers are guilty, and deserve to have their property stripped from their families upon death, because some farmers hire illegal aliens or participate in government subsidy programs?
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.

He mentioned family farms to invoke sympathy, as do Republican politicians when they discuss this topic. My response is "Boohoo, cry me a river."

And it's not *some* farmers that are being supported by corporate welfare, it is *all* of them. There's no way to opt out of this, even if you wanted to. Some are more adept at taking advantage than others, but every one is guilty of it, just by virtue of being in that line of business.

I have no problem with heirs having to pay taxes on an inheritance, whatever it consists of. That isn't "stripping property from them" any more than their having to pay property taxes on the same property is, or their having to pay income taxes on their income is.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

the value of farm equipment and facilities. I didn't ask for anybody's sympathy. I was saying anybody who thinks it's only a few old-money families in Connecticut affected by the estate tax, are not completely informed.

If you look at the history of the income tax, you'll find that it was promoted as something that would "only affect a few really rich people." We know where we are with that now.

You don't think that "a few old-money families in Connecticut" are as sympathetic a figure as farmers. Otherwise, why even bring it up? Well, I have even less sympathy for the farmers. At least some of the "old-money families in Connecticut" might not have relied on forced contributions from taxpayers to pay their bills.

Farm equipment and facilities are a small portion of a typical farm estate... land is the big thing. Of course, that very land that we are talking about is so highly valued precisely because of all those corporate welfare programs aimed at "family farms."
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

On the number of farmers effected by the Estate Tax?

So far I found this from factcheck.org.

http://www.factcheck.org/article328.html

And though the ad focuses on family farms and businesses, the truth is that very few actually pay the estate tax. The Tax Policy Center projects that roughly 440 taxable estates were primarily made up of farm and business assets in 2004.......

These 440 taxable estates are those for which farm or business assets made up at least half the total value of the estate. They represent only 2 percent of all 18,800 taxable estates in 2004......

he effective rate was far less for smaller estates. Of the 440 taxable family farm and business estates in 2004, two out of five paid an average rate of only 1.6 percent. These were taxable estates valued at less than $2 million.Very large estates valued at over $20 million paid at an average effective rate of just over 22 percent, a hefty tax bite but well short of "everything."

"There are those who look at things the way they are, and ask why... I dream of things that never were and ask why not." George Bernard Shaw

was to raise the exemption on taxable estates.

Nobody's argued about the timber example. I'm sure at least some of us have enough imagination to think of other instances besides these.

There's a larger principle to this whole discussion; which is better, to let a family keep its own money or to allow government to forcibly take it and then promptly waste it? I sense there are some here whose distaste for some kinds of people takes away from their sense of fairness and equal protection under the law.

Already has money confiscated every day by government. The real question is why we should waste our limited political capital on the estate tax, which affects so few people and will earn us zero political goodwill when we can spend it doing something that matters, like cutting marginal rates some more or eliminating FICA.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

is that if you have a farm worth a net value of 2 million dollars, you are likely doing pretty well and probably because of various government handouts.

"There are those who look at things the way they are, and ask why... I dream of things that never were and ask why not." George Bernard Shaw

Those government subsidy programs were started by Roosevelt's adminstration (I thought every program he started was supposed to be untouchable).
http://en.wikipedia.org/wiki/New_Deal#The_Farm_Programs

Once such programs are started, it's hard to stop them.

So you can stop inferring that I am. If you check my long posting history that will be abundantly clear.

I didn't even list half of the corporate welfare farmers collect. And what I did list is entirely accurate. If you want to try to point to any part of it that isn't accurate, feel free to give it a shot.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

Any tax where everyone pays the same amount is regressive too. So why are regressive taxes bad?
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.

Billionaire investors paying $0/0% in FICA (you only pay it on earned income), a pro basketball player paying 0.0009% of his income in as FICA and Joe Blow trying to support a family of 6 on $50,000 a year paying 15.3% of his earnings into FICA... thats not my idea of fairness.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

more people would agree with you. One thing you neglected to mention is that the billionaire investors don't get any money OUT of SS if they haven't paid anything in and the pro basketball player is likely to get far less out than he put in.

To top it off, it's unlikely that anyone will be getting the amounts "promised" under the current system (more likely about 70% of it) and even those who do get will only a poverty level income.

That's not a fair system in any sense.

a Ponzi scheme. Nothing like one.

"There are those who look at things the way they are, and ask why... I dream of things that never were and ask why not." George Bernard Shaw

Social Security is exactly like a Ponzi scheme with the only exception being it's not voluntary.

A Ponzi scheme was an "investment" where the manager (Mr. Ponzi) accepted current investments and paid a regular "interest" payment to the previous investors. He used the money from new investors to make the payments to the original investors (PAYG) and spent the surplus. This worked great as long as there was an increasing number of people paying in. Everyone was happy at the high level of payout they were receiving. Unfortunately the number of new investors didn't keep up and he started paying less money out. This reduced the appeal to new investors and eventually he didn't have any new investors. The whole thing collapsed.

Social Security is a system where money is paid in and out on a pay as you go (PAYG) system. As new money comes in, it's paid out to current benficiaries and the surplus is spent (jn theory loaned to the general fund). It worked great as long as the number of workers paying in far exceeded the number drawing out, but that balance is changing. In a few years, the amount coming in will be less than the amount going out. We've spent the surplus so we're going to have to either cut benefits or raise general revenue taxes to cover the amount that's already been spent. The "borrowed" money that we've already spent will run out in about 40 years. At that point, the benefits paid will by law be cut to about 70% of the scheduled payments.

That's all it is. It's not a savings account. It's an not insurance policy. It's not an annuity. It's a welfare program that people qualify based on their age and average earnings during a short window of their life. Like all welfare programs, it should be paid for by everybody. Like every other welfare program, it should be means tested too. That's how you solve the SS problem once and for all.

FICA also goes to pay for Medicare, which is an abomination that should've never been created in the first place. These billionaire investors that "opt out" of SS by virtue of having no earned income still collect Medicare benefits.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

As you say, it's not insurance, it't not an annuity. But unfortunately, you Libs have lied to everyone for years and told people that it is exactly those things.

As a welfare program, it's a disappointment at best.

zuiko is not a Lib. However I am generally Liberal.

Secondly as a Welfare program, SS has been arguably the greatest welfare programs ever created.

"There are those who look at things the way they are, and ask why... I dream of things that never were and ask why not." George Bernard Shaw

I thought he was defending the SS program. Reading the base post it's obvious he wasn't. My bad....

SS is a ponzi scheme that will collapse in the near future.

doesn't make it so.

Social Security does NOT require an ever increasing pool of investors. It has a fixed rate. Granted you need more people putting in than taking out but that doesn't make it a ponzi scheme, no matter how hard you try to make it.

And SS will never collapse. They will change to meet whatever needs they face.

"There are those who look at things the way they are, and ask why... I dream of things that never were and ask why not." George Bernard Shaw

Social Security requires a high ratio of workers putting into the system, to retirees taking out of the system. Any credible documentation of the program admits that freely.

Generation after generation has passed, of Social Security expanding just like that. But now that people are living longer, the ratio is going to take a beating, and the system is going to collapse.

Why do you think people keep saying that letting illegal aliens into the program would save it? It's the CLASSIC Ponzi attempt to get more investors.
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.

You could always slash benefits or jack up taxes to sustain the program indefinitely. In a lot of ways an actual Ponzi scheme would be preferable since it WOULD have to collapse and we could all move on without it.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

Agreed on the last point.

It might happen, too. The Democrats are clearly playing a game of brinksmanship with it, refusing any attempts to save the program, in the hopes that we'll do whatever THEY want in order to save it when the time comes.

But we'll see if they're in power then...
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.

It is a matter of simple arithmetic.

If you have X number of recipients and they get Y dollars annually then the amount of money that SS requires is X*Y.

If you have A number of workers they need to put B dollars into the program annually to make it viable.

So X*Y=A*B. It doesn't change unless you change the variables. Increase X and you will need a corresponding increase in either A or B, usually B. Decrease Y and you can decrease either A or B, usually B.

A ponzi REQUIRES an ever increasing number of X and A. So if SS were truly a Ponzi scheme each year X and A would be required to increase.

The fact that we need 20 people to pay for one SS recipient is a flaw in the program, created by the fact that the original SS system paid out dividends to people who never put a cent into the program. But that doesn't make it a Ponzi scheme. That's just Righty spin to make SS sound almost criminally bad.

"There are those who look at things the way they are, and ask why... I dream of things that never were and ask why not." George Bernard Shaw

OK, let's look:

We have X recipients taking in Y dollars each, and A providers paying out B dollars each.

X * Y = A * B

We agree that far, ignoring the surplus since we're taling about requirements, not the current payroll taxes.

We also agree that A > X, so A/X = R, where R is greater than one. So we can write it this way:

X * Y = X' * Y'

Where X' = R * X.

Well, as the years have gone on, the problem is that the X' people at some point go from paying into the system, to expecting their payoff, so we get:

X' * Y' = X'' * Y''.

Where X'' = R * X'.

That's where the Ponzi-like growth comes in. EACH generation must pony up R * what the previous generation put in, or the whole thing falls apart.

The only thing that's kept it from collapsing quickly, is the fact that, unlike any private schemer, the government has talked people into pushing the payoff so far in the future, that the people die before they can collect.
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.

We are experiencing the problem of fewer payers and greater recipients currently but that isn't necessarily how it will always be.

"There are those who look at things the way they are, and ask why... I dream of things that never were and ask why not." George Bernard Shaw

Consider what happens if X number of recipients increases faster than A number of workers (that's what's happening). That will force you to either decrease the payout to each recipient or increase the tax burden on each worker. Eventually you'll get to a point where A doesn't have enough income to cover the required B.

By the way you left another variable out of the payout side. That's the overhead required to run the whole scheme.

And it's still a Ponzi scheme.

And repeated the same statement over and over doesn't make it true.

"There are those who look at things the way they are, and ask why... I dream of things that never were and ask why not." George Bernard Shaw

Ponzi's scheme was voluntary. It allowed the investors to use good judgement and NOT "invest" in it.

Social Security is mandatory. In all other ways the 2 structures are nearly identical.

I've given an overview of both systems. Other than the mandatory nature of SS, how are they different?

As you say, repeatedly saying it ain't so, doesn't make your case.

I've laid out numerous why it isn't. But fundamentally the biggest reason why it isn't is because a Ponzi scheme requires an ever increasing number of investors. SS does not.

"There are those who look at things the way they are, and ask why... I dream of things that never were and ask why not." George Bernard Shaw

I mathematically proved elsewhere in this thread, using your own assumptions, that the pool of people paying in MUST increase geometrically for Social Security to keep working.
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.

Of course Social Security requires an ever increasing number of workers and for the same reasons. The number of recipients keeps growing. The math is the same as it was for Ponzi. Your formula is basically correct (excluding overhead) but you aren't allowing all the variables to change in a manner matching the real world. Neil Stevens already posted the mathematical explanation so I won't try to repeat it.

Earlier you said SS required 20 people to pay for 1. We're currently somewhere in the neighborhood of 5 workers for each recipient. Over the next few decades that number is expected to be cut in half, about 2.5 workers per recipient. Something has to break, either the amounts paid to recipients has to drop or the tax on the workers has to increase. The burden placed on those workers is excessive. Unfortunately, they aren't allowed the option to not participate (unless they just stop working because they don't get to keep any of their own money).

it does not require an increasing number of workers to fund it --- it merely requires an ever increasing part of the national treasure to pay off the ever increasing number of retirees.

So you owe flyerhawk an apology --- and eventually your kids will owe him a larger part of their income :-)

John
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Democratic civilization is the first in history to blame itself because another power is trying to destroy it.
... Jean-François Revel

Eliminated, thus removing a taxing tool from the taxing table. My philosophy is that the power to tax is the power to destroy and any tax above what is absolutely necessary is a loss of freedom. Freedom's main foundation is the right to own private property, to keep the fruits of one's labor and do with it what one wishes. It is also the main secret of capitalism and our economic success as a nation and its moral heart: one has an incentive to be creative and industrious, to take risks which meet the needs and desires of others.

So if we can eliminate a whole category of taxes, then I say let's do it. If one can strike a blow against the deadly sin of class envy, all the better.

I have not concluded which taxes are less onerous, but I'm thinking.

http://devine-gamecock.townhall.com
www.race42008.com
"Within the covers of the Bible are the answers for all the problems men face." - Ronald Reagan

*ALL* that the Estate Tax does is tell up-and-coming spendocrats in the Federal Government that they will continue to have a source of revenue regardless of how badly they screw up. A source of income that is built solely on the backs of people in this country who have worked every day of their lives to build wealth and protect it for themselves and their family. It's the biggest scam ever perpetrated on the American people in the history of the Republic, and I've heard all the justifications for it.

The Federal Government, the several States, and the various Local governments have more than enough power to tax the living daylights out of people in this country. The last thing they need in addition to all of those means is the power to tax people's hard-won wealth and estates after they die.

And the Estate Tax really does nothing but make accountants and lawyers rich in any case: because anyone who has wealth that might be impacted by it does the smart thing and hires them to liquidate it before it gets taxed by the government in the first place. It's just a tremendous, counterfactual boondoggle.

Get rid of it.

http://devine-gamecock.townhall.com
www.race42008.com
"Within the covers of the Bible are the answers for all the problems men face." - Ronald Reagan

A much better guide to estate and gift taxation than Flyerhawk is suggesting with his linke to Annenberg/CPB Factcheck is here. Bill Clinton talks about "not giving Chelsea every nickel" but in reality the tax rates are exorbitant, approaching 50% and most certainly a double tax if you leave money to your grandkids.

I am time-challenged at the moment, but let it suffice to say this is a throwback to the bad old European days when legacies meant more than stocks and bonds. One day I will post on this unless Paul beats me to it.

It is a tax on the inheritance the heirs receive, not the deceased or death itself. If you give money to someone while you are alive, they must pay taxes on it. If you give money to someone in exchange for a service, they must pay taxes on it. If you give money to someone in death, why would it be tax free? Why should it be the exception to the rule?

It's not like the estate tax is the only tax being paid in connection with a death, either. The executor has to pay taxes on his fee. The funeral home has to pay taxes on the money your estate pays it. The gravediggers have to pay taxes on the money the funeral home pays it. The hearse is filled with taxable fuel. There are all sorts of nickle and dime "filing fees" that have to be paid to retitle assets. Does all that also make death a taxable event?
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

The tax is formally known as the estate tax. It's a tax on the estate of the deceased.

If I'm wrong, please correct me, but judging from the documents I've seen over the course of this thread, I'm pretty sure I'm right.
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.

The tax is levied on the amount of the estate, not the amount each beneficiary receives. If the latter were the case dividing it among sufficient beneficiaries allow one to avoid the estate tax altogether --- and that simply doesn't happen.

John
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Democratic civilization is the first in history to blame itself because another power is trying to destroy it.
... Jean-François Revel