# Is it possible to close Estate Tax loopholes? **URL:** \ **Category:** Great Debates\ **Created:** [September 27, 2012, 5:13pm UTC](https://boards.straightdope.com/t/is-it-possible-to-close-estate-tax-loopholes/636041 "2012-09-27T17:13:13Z")\ **Posts on this page:** 20\ **Page:** 4
**Author:** ![Ludovic](https://avatars.discourse-cdn.com/v4/letter/l/7ab992/32.png) [@Ludovic](https://boards.straightdope.com/u/Ludovic)\ **Post date:** [October 2, 2012, 9:05pm UTC](https://boards.straightdope.com/t/is-it-possible-to-close-estate-tax-loopholes/636041/61 "2012-10-02T21:05:56Z")
It’s not often that an argument can be refuted by simply looking at the URL. ---
**Author:** ![Terr](https://avatars.discourse-cdn.com/v4/letter/t/839c29/32.png) [@Terr](https://boards.straightdope.com/u/Terr)\ **Post date:** [October 2, 2012, 9:12pm UTC](https://boards.straightdope.com/t/is-it-possible-to-close-estate-tax-loopholes/636041/62 "2012-10-02T21:12:26Z")
> [@Ludovic](#): > > It’s not often that an argument can be refuted by simply looking at the URL. Source: Internal Revenue Service or to expand: “The data source is the IRS Statistics of Income Division, which uses a national sample of tax returns to provide the figures used here. The figures above were taken from data that were labeled an “early release” by SOI in October 2011. The 2008 figures and those for previous years on this page were taken from the final percentile data released by the IRS. Figures for 2009 may be subsequently revised.” ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [October 2, 2012, 9:25pm UTC](https://boards.straightdope.com/t/is-it-possible-to-close-estate-tax-loopholes/636041/63 "2012-10-02T21:25:58Z")
> [@Max\_Torque](#): > > I’m not saying that his foundation doesn’t do great things, but like everyone with money, he does have extravagances. So? It’s his money. Not only did he earn it he created an industry worth hundreds of billions if not trillions of dollars. He’s single handedly advanced technology around the world. The companies he’s created will continue to do so for some time. It would be difficult to calculate the number of jobs created because of him. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [October 2, 2012, 10:17pm UTC](https://boards.straightdope.com/t/is-it-possible-to-close-estate-tax-loopholes/636041/64 "2012-10-02T22:17:33Z")
> [@Kearsen](#): > > Probably because it wasn’t exempt. You already taxed that money, remember? > > This is where people come in and cry “double taxation” to which you ignore. When we talk about double taxation, we are (or should be) talking about taxation of income multiple times in the same hands. > **[Double taxation](https://en.wikipedia.org/wiki/Double_taxation)** > > Double taxation is the levying of tax by two or more jurisdictions on the same income (in the case of income taxes), asset (in the case of capital taxes), or financial transaction (in the case of sales taxes). > Double liability may be mitigated in a number of ways, for example, a jurisdiction may: > Jurisdictions may enter into tax treaties with other countries, which set out rules to avoid double taxation. These treaties often include arrangements for exchange of information to prevent tax evasio... So while the social security tax and state income taxes are reasonably considered double taxation, things like sales taxes, transfer taxes and capital taxes (eg real estate taxes) are not. Unless you are an American conservative, then almost everything is double taxation. So the reason people ignore your cries of double taxation is because your views about taxation are somewhat unique to the American conservative. People use the phrase double taxation most frequently to describe taxation of dividends because you tax the income once at the corporate level then you tax the shareholder when they receive dividends. They have been trying very hard to get people to buy into the line that estate taxes are a form of double taxation as well, but the lines are much more attenuated. > [@Algher](#): > > We don’t tax spousal transfers upon death of a spouse. That is an exemption, like the $5 million dollar exemption on estates. > [@Magiver](#): > > Bill Gates is much better at spending his money than the government is. > > And if it was passed down to his heirs (which it isn’t) they would continue to generate jobs and pay taxes on it. So you are saying that Bill Gate’s shares of Microsoft are better off in the hands of his heirs than some mutual fund? Are you saying that the cash (not the shares) are better off in the hands of Bill Gates’ heirs than used to build roads, enforce the laws, and ensure the security of our nuclear facilities? > [@](#): > > The government on the other hand, would piss it away until it’s gone because governments don’t generate wealth. Riiight because infrastructure isn’t useful to building wealth. > [@Terr](#): > > Let’s see: top 0.1% (that’s “super-rich”, right?) have the average rate of 24.28% and the “nervous and anonymous middle class” pays either 11.36% (if you take between top 5% and 10%) or 8.25% (if you take the ones between 10% and 25%). 0.1% is not super rich. I know too many people in that category, a lot of law firm partners fall into that category. Its something like a $1 million/year. These are the folks that WORK FOR the super rich. Most super rich people don’t work. They earn their money from capital not labor. > [@Magiver](#): > > So? It’s his money. Not only did he earn it he created an industry worth hundreds of billions if not trillions of dollars. He’s single handedly advanced technology around the world. The companies he’s created will continue to do so for some time. It would be difficult to calculate the number of jobs created because of him. Great and he can keep almost all of it if he sells his stock, his heirs get most of it if he dies. All these arguments seem to be arguments against taxation generally rather than the estate tax. We get it, you wish that we could operate the government without taxing anyone, but its just not realistic. ---
**Author:** ![2sense](https://avatars.discourse-cdn.com/v4/letter/2/e47774/32.png) [@2sense](https://boards.straightdope.com/u/2sense)\ **Post date:** [October 2, 2012, 10:25pm UTC](https://boards.straightdope.com/t/is-it-possible-to-close-estate-tax-loopholes/636041/65 "2012-10-02T22:25:05Z")
> [@Magiver](#): > > So? It’s his money. This is the sort of thinking that I’ve been objecting to. It makes no sense at all to assert that money belongs to Bill Gates when the very disagreement is about whether or not that money should be paid in taxes. If it’s not paid in taxes then yes, it is his. If it is paid in taxes then obviously that is no longer true. > [@](#): > > Not only did he earn it he created an industry worth hundreds of billions if not trillions of dollars. He’s single handedly advanced technology around the world. The companies he’s created will continue to do so for some time. It would be difficult to calculate the number of jobs created because of him. So he would be able to continue to do these things after he was dead if only his heirs could keep a larger percentage of his estate? ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [October 2, 2012, 10:46pm UTC](https://boards.straightdope.com/t/is-it-possible-to-close-estate-tax-loopholes/636041/66 "2012-10-02T22:46:25Z")
> [@Damuri\_Ajashi](#): > > So you are saying that Bill Gate’s shares of Microsoft are better off in the hands of his heirs than some mutual fund? yes > [@Damuri\_Ajashi](#): > > Are you saying that the cash (not the shares) are better off in the hands of Bill Gates’ heirs than used to build roads, enforce the laws, and ensure the security of our nuclear facilities? yes > [@Damuri\_Ajashi](#): > > Riiight because infrastructure isn’t useful to building wealth. governments do not generate wealth. The only thing governments generate consistently is debt. It’s the continued wealth of a nation that pays for the infrastructure, not the other way around. ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [October 2, 2012, 10:54pm UTC](https://boards.straightdope.com/t/is-it-possible-to-close-estate-tax-loopholes/636041/67 "2012-10-02T22:54:21Z")
> [@2sense](#): > > So he would be able to continue to do these things after he was dead if only his heirs could keep a larger percentage of his estate? If they indeed received his estate it would not exist as a finite sum as it would be if the government received it. As a finite amount received in the form of taxes it would be spent in it’s entirety (and then some) by the government. If his heirs received it the likelihood exists that it will continue to generate wealth (and therefore taxes) indefinitely. Given Bill Gates’ track record, it would continue to create new jobs which also generate taxes. It would be safe to say that Gates is responsible for more tax revenue than his entire net worth. ---
**Author:** ![Terr](https://avatars.discourse-cdn.com/v4/letter/t/839c29/32.png) [@Terr](https://boards.straightdope.com/u/Terr)\ **Post date:** [October 2, 2012, 11:23pm UTC](https://boards.straightdope.com/t/is-it-possible-to-close-estate-tax-loopholes/636041/68 "2012-10-02T23:23:34Z")
> [@Damuri\_Ajashi](#): > > 0.1% is not super rich. I know too many people in that category, a lot of law firm partners fall into that category. Its something like a $1 million/year. These are the folks that WORK FOR the super rich. Most super rich people don’t work. They earn their money from capital not labor. 0.1% lower cutoff is $1,600,000/year. And it doesn’t say whether it is from wages or from capital. Anyway, 0.1% on the average pay 24.28% of their AGI in taxes - 2 to 3 times, as a percentage, more than “middle class”, however you define that. Do you have any evidence that 0.05% pay less than 24.28%? Or 0.01%? ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [October 3, 2012, 12:17am UTC](https://boards.straightdope.com/t/is-it-possible-to-close-estate-tax-loopholes/636041/69 "2012-10-03T00:17:23Z")
> [@Magiver](#): > > If they indeed received his estate it would not exist as a finite sum as it would be if the government received it. As a finite amount received in the form of taxes it would be spent in it’s entirety (and then some) by the government. If his heirs received it the likelihood exists that it will continue to generate wealth (and therefore taxes) indefinitely. Given Bill Gates’ track record, it would continue to create new jobs which also generate taxes. It would be safe to say that Gates is responsible for more tax revenue than his entire net worth. […and yet government spending cuts reduce growth more than tax increases.](http://www.nytimes.com/2011/07/03/business/economy/03view.html?_r=0) ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [October 3, 2012, 1:29am UTC](https://boards.straightdope.com/t/is-it-possible-to-close-estate-tax-loopholes/636041/70 "2012-10-03T01:29:33Z")
> [@Really\_Not\_All\_That\_Bright](#): > > […and yet government spending cuts reduce growth more than tax increases.](http://www.nytimes.com/2011/07/03/business/economy/03view.html?_r=0) How’s that national debt thing working out for Greece? Where did all that government spending get them? Governments do not generate wealth. ---
**Author:** ![2sense](https://avatars.discourse-cdn.com/v4/letter/2/e47774/32.png) [@2sense](https://boards.straightdope.com/u/2sense)\ **Post date:** [October 3, 2012, 1:37am UTC](https://boards.straightdope.com/t/is-it-possible-to-close-estate-tax-loopholes/636041/71 "2012-10-03T01:37:59Z")
> [@Magiver](#): > > If they indeed received his estate it would not exist as a finite sum as it would be if the government received it. As a finite amount received in the form of taxes it would be spent in it’s entirety (and then some) by the government. If his heirs received it the likelihood exists that it will continue to generate wealth (and therefore taxes) indefinitely. Given Bill Gates’ track record, it would continue to create new jobs which also generate taxes. It almost sounds like you are assuming Microsoft would be liquidated, everyone laid off, and the company sold for parts if Gates were to die owing estate taxes but that’s so ridiculous that I can’t believe it. If Gates were to die today the company would continue on no matter who ended up owning Gates’ former shares. > [@](#): > > It would be safe to say that Gates is responsible for more tax revenue than his entire net worth. Perhaps. But that doesn’t mean he wouldn’t have generated more revenue for the government if tax rates were higher. Let alone anything pertinent about the taxes on his estate once he is gone. ---
**Author:** ![2sense](https://avatars.discourse-cdn.com/v4/letter/2/e47774/32.png) [@2sense](https://boards.straightdope.com/u/2sense)\ **Post date:** [October 3, 2012, 1:47am UTC](https://boards.straightdope.com/t/is-it-possible-to-close-estate-tax-loopholes/636041/72 "2012-10-03T01:47:41Z")
> [@Magiver](#): > > How’s that national debt thing working out for Greece? Where did all that government spending get them? The Pittsburgh Steelers didn’t win this weekend, where did all that practice get them? It’s almost like extrapolating from a single example can lead to incorrect conclusions! > [@](#): > > Governments do not generate wealth. While this is given as an article of faith on the right there doesn’t seem to be anything behind it. If a group of people working for a private concern can produce wealth then certainly the same group of people doing the same work for a public concern would also be creating wealth. While in our capitalist society we don’t ask governments to create wealth directly they are integral to wealth creation. I’ve never seen a single example of wealth being created independent of government. ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [October 3, 2012, 2:00am UTC](https://boards.straightdope.com/t/is-it-possible-to-close-estate-tax-loopholes/636041/73 "2012-10-03T02:00:06Z")
> [@2sense](#): > > The Pittsburgh Steelers didn’t win this weekend, where did all that practice get them? > It’s almost like extrapolating from a single example can lead to incorrect conclusions! a single example? Really? Greece is the only country heading off a cliff? > [@2sense](#): > > While this is given as an article of faith on the right there doesn’t seem to be anything behind it. If a group of people working for a private concern can produce wealth then certainly the same group of people doing the same work for a public concern would also be creating wealth. While in our capitalist society we don’t ask governments to create wealth directly they are integral to wealth creation. I’ve never seen a single example of wealth being created independent of government. How is government integral to wealth creation? And please don’t use roads and infrastructure as your reasoning. that was paid for FROM wealth. There are examples such as the space race where the task generated outgrowth industries but that is the exception and not the norm. governments don’t create wealth. If they did, the solution to everything would be to spend money. It would generate more inflow of money than outflow of expenditures creating a feedback loop of wealth. ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [October 3, 2012, 2:04am UTC](https://boards.straightdope.com/t/is-it-possible-to-close-estate-tax-loopholes/636041/74 "2012-10-03T02:04:26Z")
> [@2sense](#): > > It almost sounds like you are assuming Microsoft would be liquidated, everyone laid off, and the company sold for parts if Gates were to die owing estate taxes but that’s so ridiculous that I can’t believe it. If Gates were to die today the company would continue on no matter who ended up owning Gates’ former shares. The money from Gates’ estate would likely continue to forge new companies and create additional wealth. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [October 3, 2012, 4:47am UTC](https://boards.straightdope.com/t/is-it-possible-to-close-estate-tax-loopholes/636041/75 "2012-10-03T04:47:28Z")
> [@Magiver](#): > > yes… > yes ??? Care to expound on why you think microsoft would create more jobs and be more productive if Gates’ shares are held by his heirs than if they are held by a mutual fund? > [@](#): > > governments do not generate wealth. The only thing governments generate consistently is debt. It’s the continued wealth of a nation that pays for the infrastructure, not the other way around. Wrong. ---
**Author:** ![2sense](https://avatars.discourse-cdn.com/v4/letter/2/e47774/32.png) [@2sense](https://boards.straightdope.com/u/2sense)\ **Post date:** [October 3, 2012, 12:59pm UTC](https://boards.straightdope.com/t/is-it-possible-to-close-estate-tax-loopholes/636041/76 "2012-10-03T12:59:24Z")
> [@Magiver](#): > > a single example? Really? Greece is the only country heading off a cliff? Spain is also in big trouble but it was being fiscally responsible with low debt before the problems started. Which is an indication that other forces are at work in the Eurozone. > [@](#): > > How is government integral to wealth creation? And please don’t use roads and infrastructure as your reasoning. that was paid for FROM wealth. I’m sorry but that’s how capitalism works. We pay taxes to support the government which maintains the system that allows private enterprise to flourish. Without infrastructure there is no wealth creation. Period. > [@](#): > > governments don’t create wealth. If they did, the solution to everything would be to spend money. It would generate more inflow of money than outflow of expenditures creating a feedback loop of wealth. Governments could create wealth directly. As I pointed out, if a group of people are creating wealth they won’t magically stop doing so if they continue their activities working for a public enterprise. In our capitalist society we don’t ask the government to do this but it’s not like it’s impossible. Governments rarely create wealth but they are always necessary to the process. > [@](#): > > The money from Gates’ estate would likely continue to forge new companies and create additional wealth. It’s almost sounds like you think the money paid in taxes disappears in some black hole rather than going to pay private individuals and corporations for goods and services. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [October 3, 2012, 11:11pm UTC](https://boards.straightdope.com/t/is-it-possible-to-close-estate-tax-loopholes/636041/77 "2012-10-03T23:11:01Z")
> [@Magiver](#): > > If they indeed received his estate it would not exist as a finite sum as it would be if the government received it. As a finite amount received in the form of taxes it would be spent in it’s entirety (and then some) by the government. If his heirs received it the likelihood exists that it will continue to generate wealth (and therefore taxes) indefinitely. Given Bill Gates’ track record, it would continue to create new jobs which also generate taxes. It would be safe to say that Gates is responsible for more tax revenue than his entire net worth. Why does it matter who owns shares of microsoft? You do realize that if Bill Gates’ heirs inherit his shares and sell them, they are likely to put the lion’s share of that money in US treasuries, right? You do realize that Bill Gates hasn’t paid taxes on the vast majority of his wealth right? Are you under the impression that the computer revolution would not have happened wihout Bill Gates? Microsoft was not the only OS provider out there, in fact a lot of people would say that they stole their OS from Apple and proceeded to outcompete their competition. However there is a LOT of economic activity that would not happen without government. Sure government can be wasteful and corrupt, like any other organization but it says something about your argument if you try to compare the worst of government with the best of the free market. > [@Terr](#): > > 0.1% lower cutoff is $1,600,000/year. And it doesn’t say whether it is from wages or from capital. > > Anyway, 0.1% on the average pay 24.28% of their AGI in taxes - 2 to 3 times, as a percentage, more than “middle class”, however you define that. Do you have any evidence that 0.05% pay less than 24.28%? Or 0.01%? I define people as rich based on how much money they HAVE not how much money they EARN. People who earn a lot tend to have a lot but there is a population of really wealthy people who never worked a day in their lives and have the benefit of a 15% tax rate on a large portion of their income. > [@Really\_Not\_All\_That\_Bright](#): > > […and yet government spending cuts reduce growth more than tax increases.](http://www.nytimes.com/2011/07/03/business/economy/03view.html?_r=0) I thought that was situational. Specifically the situation we find ourselves in right now. > [@Magiver](#): > > Governments do not generate wealth. You keep saying that like the mere act of repeating it somehow lends it some credibility. Wealth is hard to generate without government, just ask the Somalis. > [@Magiver](#): > > How is government integral to wealth creation? And please don’t use roads and infrastructure as your reasoning. that was paid for FROM wealth. There are examples such as the space race where the task generated outgrowth industries but that is the exception and not the norm. And how was the space program not paid for “FROM wealth” > [@](#): > > governments don’t create wealth. If they did, the solution to everything would be to spend money. It would generate more inflow of money than outflow of expenditures creating a feedback loop of wealth. Thats is very simplistic thinking. Just because governments are a necessary component of wealth creation doesn’t mean more of it will always produce more wealth. Its like saying that if vaccines are good for health, our health system should just vaccinate people over and over again. > [@2sense](#): > > It’s almost sounds like you think the money paid in taxes disappears in some black hole rather than going to pay private individuals and corporations for goods and services. A lot of conservatives believe almost exactly this. Government are wealth destroyers and all taxes evaporate into the ether. Now you could reasonably make the argument that government does not allocate capital as efficiently as the free market but you can’t make the argument that there are some things necessary to a stable society and a functional market that can best be provided by a government (and in some cases, ONLY provided by a government). ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [October 4, 2012, 2:28am UTC](https://boards.straightdope.com/t/is-it-possible-to-close-estate-tax-loopholes/636041/78 "2012-10-04T02:28:24Z")
> [@2sense](#): > > I’m sorry but that’s how capitalism works. We pay taxes to support the government which maintains the system that allows private enterprise to flourish. Without infrastructure there is no wealth creation. Period. > > . So when Columbus landed the infrastructure was already there? Wealth came first. The taxes from that wealth built the roads. ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [October 4, 2012, 2:30am UTC](https://boards.straightdope.com/t/is-it-possible-to-close-estate-tax-loopholes/636041/79 "2012-10-04T02:30:41Z")
> [@Damuri\_Ajashi](#): > > Why does it matter who owns shares of microsoft? > > You do realize that if Bill Gates’ heirs inherit his shares and sell them, they are likely to put the lion’s share of that money in US treasuries, right? Not bloody likely. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [October 4, 2012, 2:39am UTC](https://boards.straightdope.com/t/is-it-possible-to-close-estate-tax-loopholes/636041/80 "2012-10-04T02:39:20Z")
> [@Magiver](#): > > So when Columbus landed the infrastructure was already there? Nice example. Who was paying for Columbus’ voyage, again? [Previous page](https://boards.straightdope.com/t/is-it-possible-to-close-estate-tax-loopholes/636041.md?page=3) [Next page](https://boards.straightdope.com/t/is-it-possible-to-close-estate-tax-loopholes/636041.md?page=5)