The moral imperative for a 100% estate tax...

If there was tomorrow "economic equality" in this country how would that manifest itself? When have we every had this "economic equality" in this country or can you point me to a country where it ever existed?

 

I do too, but we don't live in a meritocracy. Consider the following:

1) Person A works hard all of his life and dies a rich man
2) Person B works hard all of his life and dies a poor man.

The American dream is built on the belief that hard work always pays off... yet it often doesn't.

 

Look to the benevolence of your gubberment overlords, grasshopper

 

I don't necessarily want it to be about how hard you work, but about how smart you work. John D. Rockefeller might not have been the hardest worker at Standard Oil, but he sure was the smartest. You can bring the blood, sweat, and tears 12 hours a day 6 days a week, but if you don't take the time to reflect on yourself and seek a better life you'll never get an opportunity. Some people are contempt with that, others want to learn more to get out of that position, and others think hey I've worked hard enough, I deserve a better life just for what I'm doing right now and without improving my skills.

 

And where has a country existed under this new pro-meritocracy of yours that has provided more for more people and a higher stand of liberty and how does impoverishing each successive generation and what do you do when all the wealthy people move out of the country along with their wealth?

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Why did B die poor? And do you have a better chance of dying poor if you don't work hard?

 

Is it beyond the realm of possibility that "Person B", though a hard worker, may not have been a responsible money manager (or family planner)?

In other words, when you start down the road of utilizing tax policy to guarantee "fair" and "equal" outcomes, how does such a system account for less than responsible personal behaviors/poor decisions?

 

Maybe B wasn't born with a rich father, or good looks, or smarts, or maybe he didn't have well-connected friends, or get lucky in the stock market...

We all know somebody who died poor even though they were honest people who worked hard.

 

In "primitive" egalitarian societies, crime and victimization is almost unheard of. Poverty and crime are highly related. I think that a progressive effective income tax combined with a progressive capital gains tax is a fair comprimise -- people can still get ahead financially but there isn't astronomical stratification between the haves and the have-nots, which is a source of great social tension.

Also, we shouldn't assume that money alone can influence behavior. People want to work, go to school, improve their lives, etc, for many reasons that have nothing to do with money. Why do millionaires continue to work? They obviously don't need the money.

 

Ignorant leftists going on ignorantly about something they don't understand. Just another day on PF.

1. A vast majority of "wealth" in the US is in real estate and private business equity/assets, illiquid assets, not cash and other liquid assets. A high estate tax, let alone 100%, would create untold havoc in the economy and in the inefficient boondoggle that is our government, require more money to trustee, administer and liquidate estates than any revenue obtained.

2. Any scheme of abusive inheritance taxes would be avoided entirely by the wealthiest, who can afford fleets of lawyers and accountants, and would hit the middle class hardest. Assets held as joint tenancies with rights of survivorship would flourish, together with any number of property transfer methods that would remove assets from the aging and into healthy hands. OR people will just shop for tax havens, expatriating our best and brightest, leaving the dregs and trough feeders to drown in their evil greed.

3. A vast majority of heirs earn their inheritance by working in family businesses, caretaking elderly parents and family, growing wealth that they don't own yet. The left would like us to believe it's all a bunch of Paris Hilton type silver spoons, and there is some of that. But heirs who have been working in more modest family businesses, maintaining family assets over time, is far more the reality.

4. In line with 3, there are solid moral and pragmatic reasons we allow property owners to transfer wealth via devise and descent, IT BELONGS TO THEM first and foremost. Why would people take risk and innovate, why would they strive to do better, if reward does not follow risk? In a confiscatory inheritance tax regime, it's highly likely we wouldn't have computers, telecomm, even ELECTRICITY. Moreover, and just as importantly, our property laws are aimed at maximizing the value of assets as opposed to waste. Wealth is not some static pie that is sliced up, but is a constant flux. Much of that flux and wealth growth entails the cultivation, preservation and maximization of wealth by owners and interested parties as opposed to idiotic bureaucrats who cultivate, preserve and maximize NOTHING. We value the rights of inheritance in our foundational law because allowing wealth to transfer to people familiar with it, with a vested interest in growing it, despite having freeriding and unjust enrichment problems, is far preferable and more likely to result in more wealth growth and preservation than any government administration.

In short, inheritance benefits ALL of us by allowing people with the greatest chance to continue cultivating and growing wealth to continue doing so.

 

Everyone does start out equally poor.

Everyone comes out of the womb naked, homeless, and broke.

If they're fortunate enough to have parents who care, the parents will temporarily alleviate the child's impoverished condition until such time as it can fend for itself.

If they don't have such parents, the government or someone else will have to take care of them.

That's how things start, would you agree?

 

Hi Sanskrit, this one requires thinking out of the box, IMO.

People are tossing around hifalutin words like 'meritocracy', but it's not that hard. It's really simple. Inheritance contradicts the fundamental conservative principle that every human being should take responsibility for themselves and make their own way in life.

The idea that a rich dad will remove the need for "work" from his children's plate contradicts the fundamentals of economic conservatism.

Giving free money to wealthy inheritors is exactly equivalent to the government passing out welfare to poor people. In both cases, the recipient no longer has to work and no longer has be truly "responsible for himself".

Now, if you'd like to talk about the family as an "extension of self", I'll be happy to engage in that debate.

However I'm a strongly conservative individual (politically and economically), and I see the benefit in changing our inheritance methodology. To see how this "could" work, you have to imagine what would happen in a world where rich people couldn't pass money to their children upon their deaths. IMO, what would happen is they'd try to pass the money while they're still alive, which is exactly what we want. If the money is passed this way, it's taxed as income, which is exactly what it is.

When looked at from this perspective, inheritance is a "loophole", it's a loophole for the wealthy special interests only and it hurts everyone else.

 

you understand that wasn't the point right? No? Sorry you are incapable of following the thread.

 

I hate to say it but the premise of this thread is simply theft and misplaced white guilt all gussied up as a moral imperative. Just where would anyone get off stealing from one family to redistribute that wealth to other folk? The result of such a policy would be to level the playing field, but not to the level of the best of our schools but instead to that of the worst. Look at every other wealth redistribution scheme we have come up with. They universally do not raise the standard of living for the poor but simply steals from the richer or more capable...

Actually, the more i read the initial post the more convinced I become this is some sort of a joke....a very poor one but a joke none the less.

 

I'd argue that you're essentially advocating for is a lottery if people can just pass on wealth from generation to generation. I personally don't believe there should be any state sponsored lottery period, either genetic or a throw your $2 in and hope to get lucky lottery.

 

It hasn't, but it's been proposed. Plato was an advocate for it and a fierce critic of democracy. Plato was actually a student of Socrates who was sentenced to death via hemlock for criticizing democracy. Socrates was a believer that the government should be led by philosophers.

 

There is a big difference between an ordinary persons parents passing away and that person and perhaps their siblings being able to inherit their parents remaining wealth...and....

.....the Multi-Billion Dollar Estate and Holding of a Family Empire being passed on as far as what percentage of Estate Tax should be paid.

Same thing with Capital Gains.

AboveAlpha

 

the taxes should be considered income for anything over 5 million given to a person..... and taxed as such.... anything under 5 million should be tax free

the person receiving the income should pay the taxes... forget taxing the estate

the first 5 million is tax free....


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Warren Buffet is not giving any of his loot to the government, or to charities, until HE is long gone.

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No. its worse...they will try their best to keep the capable down so as to garner the votes of the envious peasants.

 

No the American dream is that folk can, through hard work, make good but that folk who do not work hard will not succeed...The issue today is that those in the later group use government to steal from the folk in the first group. The left desires the guaranteed result of the second over the possible result of the first.

 

looks like the tax system is already that way

A filing is required for estates with combined gross assets and prior taxable gifts exceeding $1,500,000 in 2004 - 2005; $2,000,000 in 2006 - 2008; $3,500,000 for decedents dying in 2009; and $5,000,000 or more for decedent's dying in 2010 and 2011 (note: there are special rules for decedents dying in 2010); $5,120,000 in 2012, $5,250,000 in 2013, $5,340,000 in 2014 and $5,430,000 in 2015.

you only pay taxes on the value over $5,430,000, the first $5,430,000 is tax free

the estate tax will not effect 90% of Americans....

 

Yes. Something reasonable like that might work. Maybe some similar allowance for "donations to charity", as far as I can tell that's really the only "moral" twist in this.

It seems to me that this was the "original intent" for inheritance taxes, but over the years the political nepotism has played heavily into the current law.

What you're saying sounds right though, a "threshold" instead of a sliding scale. (At least it makes sense to "me", and I'll be happy to detail the logic if anyone cares).

 

If it makes you sick, and it really does, then I'd encourage you to go out and make as much money as you can, and then in your will sign it off to underprivileged areas as you'd like to see it go to. But that should be your choice.

You speak about a moral imperative. Do you agree that a kid born to a poor family (myself for example - when I was born, I couldn't trace a single person in my ancestry with a non-pastoral degree) who goes to college and earns a decent living, let's say $100k/yr, should be able to decide what he does with his earnings? If so, why should he not be able to do that with his earnings if it is more? The fundamental principle, that I think we should agree on, is self-determination. You and I should have a right to decide what we do with our own earnings, right? So if you and I both make it big and become multi-billionaires, suppose that you spend your money frivolously living it large and just enjoying life, and you have just a few hundred thousand left when you die - but I am frugal and I have a hundred billion when I die, because I decided that I wanted to leave it to my heirs when I die. Forget what they decide to do with it, is it not my earnings and my choice as to what happens with it when I die?

Why should the state reward wastefulness and punish frugality? This is bad 1. because its immoral to deny a person the right to determine what to do with their own earnings, and 2. wastefulness is bad and frugality is good, and so the state encouraging wastefulness and discouraging frugality is bad, and 3. breaking up longstanding individual proprietorships is bad, even for the environment.

Such a policy would basically destroy individual proprietorships and family businesses, and greatly increase the strength of corporations, and corporations by nature are not as good for the people, or for the environment, as individual proprietorships and family businesses. Imagine a great forest is owned. What would a private business do? Well, if a rich guy owns the forest he will not chop it all down - in fact, he'll seek to grow the forest, because the forest is living wealth that will be bequeathed to his heirs. Money does, in fact, grow on trees for such a man, and so he will seek to protect the forest.

 

if they move the tax responsibility to the receiver rather than the estate, non-profits would automatically be exempt

 

if one wants to choose, they can give away their money before they die and wont be a issue....

how many businesses are worth more then 5 million dollars? very few people that could not afford the tax would be effected by that

definitely not many 'family' businesses....

btw, my suggestion makes the 5 million apply to each receiver, not the estate itself, seems fairer to me

.

 

This fails to address any of the problems I raised. What makes you think that a will should a will be less respected than a transfer of ownership before death?