The Bush idea of getting rid of inheritance or estate taxes will have the effect of creating a new caste of very rich people who will not have to work. In a couple of generations, this will really undo our democracy and turn us into a caste system.
Also, if people can pass on all their money to offspring, the incentive to donate to charities will be reduced.
Bush’s proposal to end esxtate taxes is a bad idea.
You realize that you are stating this:
“If we stop taxing the transfer of property and wealth from one family member to another upon the original owner’s death it will undermine the entire mixed market economy system we currently have and result in an economic system where the status one is born into is the status one will maintain forever, without hope of moving up.”
I disagree. Damnit, I swore to myself I’d stay out of economic threads, but I’ll not attempt to moralize here.
If what you are saying is true, then I wonder why it hasn’t happened already. After all, the estate tax is larger than most, but nowhere near 100%. I feel that, in a given lifetime, even if a person was left with 50% of an estate, then they grew it to 175% (assuming some exponential growth) in their lifetime, left it to their children at a 50% rate, the second generation has almost 100% all over again, or the original amount of money left behind.
In other words, leaving any portion of money and property behind allows the next generation a head-start. So why haven’t we collapsed into aristocracy already?
Well, obviously because not every person can perform equally given similar resources. In other words, not everyone can be rich, even if given the opportunity. Some may maintain it, some may lose it.
This is, admittedly, a little simplistic, but the fear of the rich taking over is a little past its time, I feel. The estate tax is not a crucial hinge on which our economy rests.
New? Where have you been?
Most of the super wealthy have been wealthy for generations, and will continue to be.
Oddly we have another thread on this very subject, “Surprise surprise!! Guess who opposes the repealing of the estate tax” which I think contains some relevant argumentation: http://boards.straightdope.com/sdmb/showthread.php?threadid=60163
Mixed market economy ARL? Come on now.
Ah but why?
Politics.
Politics.
Grew it? Ahhhh, stop the Bschool speak! Ick ick ick. (sorry this is in fact irrelevant but I hate this use of the verb. Irrational of me, but can’t help it.)
Assumes growth of course, maybe yes, maybe no.
Politics, compromise.
Not sure of the relevance here.
Nope, it’s not a matter of taking over, its a matter of economic effects of excessive concentration of wealth.
Crucial, probably not. Useful in helping minimize the negative effects of excessive inter-generational wealth transfers, absolutely yes. Should be increased IMHO. And yes, this would likely effect me personally.
(The real question is how this effects the cheesemakers.)
C, so here we are again.
Perhaps you missed my point by picking each sentence apart you missed the overall point of it.
The primary accusation of the wealthy is that it takes little or no effort to make more money from existing money after reaching a certain point. Thus, the transfer of your “excessive” wealth would allow for an entire cleass of people who don’t have to work, whose children don’t have to work, etc etc. Thus, to stop this from happening, we have the inheritance tax.
To which I countered, BS. If we are already assuming that it takes money to make money and everyone who inherits money is going to do something with it to make more money (which I don’t think is true, but that’s not what is stated in these rationalizations), then any bit of money we allow to be passed on from generation to generation will always aid the following generations more so long as it is a percentage based system without a ceiling (ie- a point of 100% confiscation). Thus we would already have a huge aristocracy. Which we don’t.
If the inheritance tax were really the policeman keeping away aristocracy then there would not be a percentage based system, a “progressive” percentage, or any other of the cockameme systems people put together. We would simply place a low ceiling after which everything gets confiscated. No worries there, right? As it stands, if the assumptions about what people do with their inheritance were true then we would already be in an aristocracy, which we’re not, so wtf is going on.
As well, mixed market economy. Market, capitalistic. Mixed, not 100% free. Really, C, you see it some other way?
Ah ARL, this isn’t relevant to my point.
This however is. Non-productive behaviour.
By making some assumptions which may or may not hold.
Your logic train here escapes me. I firstly don’t follow the leap you’re making to the necessary existance of a “huge aristocracy.” It strikes me this is either-or thinking. The current estate tax regime, to my limited understanding, is supposed to be one factor in reducing inter-generational wealth transfers and discouraging uneconomic rent-seeking behaviour. It is also a political compromise. As such it might not be expected to be 100%. Further, I don’t believe it supportable to think that all inheritance is uneconomic. Certainly the ability to leave some inheritance may be a motivator for the current generation, so we would want to leave that in place. Ergo, we are seeking a compromise between the positive and negatives of wealth accumulation and inter-generation transfers. It’s not a black and white picture and so the solution itself will have to be in greyscale too. I have some further thoughts but I’m tired and its time to go home.
What? Your logic here utterly escapes me.
Perhaps the problem is putting things in terms of policeman and criminalization. Both are inappropriate metaphors.
No. See above.
Well, wtf is going on is you seem to be making a number of peculiar assumptions. I’m having trouble following your logic, which is probably just me, but it strikes me that you have made a number of unsupportable assumptions.
Yes, I do. I don’t see the US economy as mixed in any meaningful sense. But you know that since we covered this ground before.
Its both a good thing and a bad thing.
Life is not fair, some people are bought private education,cars, college fees, houses etc. by there parents.
Its a natural instinct to help your children.
Im not sure if it is a bad or good thing, if your parents made a load of dosh and leave it to you then you don’t compete in the job market and hence allow other people to compete.
The money isn’t just sitting about either, its in the capital markets being used by other people to make money.
If you tax inheritance more then parents will just find ways to give the children the money before they die.
What are you going to do, stop people buying there kids presents, private tuition ?
Since the ideas in the OP have been under discussion in the still-more-or-less active Surprise surprise!! Guess who opposes the repealing of the estate tax thread, there’s a lot to be said for picking up the discussion and moving it over there, rather than say everything for the third time in four weeks.