… and, short of that happening, makes the second generation a bunch of lazy, arrogant parasites (instead of “Job Creators”), then the third generation pisses it all away anyway.
I forgot that Gates built an interstate highway system, won two world wars, or built dams which made huge tracts of land available to industry and agriculture by providing irrigation and electricity. I’m sure that Gates could have developed the internet by himself eventually, but it’s nice that it happened earlier so businesses worth hundreds of billions of dollars could make use of it.
I’m going to go out on a limb here, but maybe, just maybe, the best system is one in which we have a public, private partnership funded through a progressive tax system. Maybe we can set the rates to a level that corresponds to the periods of greatest economic growth.
Of course I could be wrong, maybe we need to let the infrastructure crumble and our education system deteriorate so that our entire country begins to look less like Massachusetts, New York, and California and more like Mississippi and Alabama.
I’m pretty glad that my parents’ generation weren’t a bunch of whiny bitches and instead saw the value of building a great country.
Just so that everyone is crystal clear, the IRS is not grabbing very many dead people’s houses. The current exemption to the estate tax is $5,000,000. That’s 5 million dollars. Exempt off the top. As in, any tax will apply to ONLY that part of the estate ABOVE 5 million dollars.
This is less than half of one percent of estates. We’re talking less than 1 out of 200.
So we’re talking about a very small part of the population. Let’s not get all “Joe the Plumber” here, and get all outraged on behalf of a tiny, teeny, small minority of very, very rich people because one day we’re sure we’re going to be very, very, very rich.
I get that some people don’t like taxes, and don’t feel that the government should take any taxes from them at all.
The estate tax is a very old tax - nearly as old as income tax if I recall correctly.
Taxes to run the government will have to come from somewhere. So fine - eliminate the estate tax. You’ll have to increase some other tax to make up for it, or cut government more. The trouble with these arguments is that people seem to want to cut a tax on the 0.5% wealthiest and make it up with increasing taxes on the lower half of the wealth bracket.
So I guess the end game is - 0 taxes on the wealthiest 0.5% of the population, who eventually will control 99.9% of the wealth.
[QUOTE=fumster]
I forgot that Gates built an interstate highway system, won two world wars, or built dams which made huge tracts of land available to industry and agriculture by providing irrigation and electricity. I’m sure that Gates could have developed the internet by himself eventually, but it’s nice that it happened earlier so businesses worth hundreds of billions of dollars could make use of it.
[/QUOTE]
No, he merely created a company that injected hundreds of billions of dollars into the economy, made a lot of people a lot of money and gave a lot of people those ‘job’ thingies we hear so much about, oh, yeah, and provided some of the tax money that the government used to do all those things you are giving them credit for. 
Well gee…did you think you’d get an argument there? I have no problem with the government taxing people for services that the public desires. I just happen to think that your example was a bad one, and that Gates would do more with that $3 billion and change than the government would, including, you know, paying his lawful taxes on that money (best of both world, ehe? ).
Maybe, if we built a giant strawman and rolled it up to the gates they would bring it inside the walls. Then, when they are asleep, we could leap FROM the strawman and take the enemy by surprise. Not only by surprise but completely unaware (even though this is really saying the same thing again)…
Gods bless America! You are probably glad that when your parents die (or died) the government could snatch a percentage of whatever they managed to accumulate in their lifetimes, even though they had already paid taxes on it while they were accumulating it. I mean, the government certainly could do better things with whatever your parents had than they could…or you could. Right?
Yeah, but if we raise taxes on these people we won’t have enough reality shows and annoying New York Times stories about their lives of stupid, pointless sybaritic excess. Did you think about that, smart guy?
I’m not seeing the problem there. ;D
The thing is, this is simply an argument against any form of taxation, full stop. Which is simply libertarian fantasy, and will not ever work.
So the question is, where are tax dollars to come from? If the democratic will of the country is to have an estate tax, then we need to khow to best collect it fairly and make sure that some people don’t use loopholes to get out of it.
[QUOTE=Euphonious Polemic]
The thing is, this is simply an argument against any form of taxation, full stop. Which is simply libertarian fantasy, and will not ever work.
[/QUOTE]
Certainly. Just like the converse argument and socialist fantasies are in the same category. Personally, I’m more a middle ground kind of person. I have no problem with taxes to render services that the public wants or needs.
Well, you tell me…where do the tax dollars come from? What pays for all of this fine society and infrastructure? And where is the wealth better served for society? In the hands of folks like Gates who build wealth AND pay taxes…or, confiscated by the government and spent on public projects? Mind, I’m not talking about ‘confiscated’ equating to ‘paying reasonable taxes’, I’m talking about the government seizing wealth that’s already been taxed AND would be taxed again (if it went to the children of the folks who accumulated it in the first place), assuming it’s invested or even spent by the folks who inherit it. They aren’t going to just stuff it under the mattress after all.
Since this is a thread about the estate tax, one of the two options you are presenting is completely impossible. Keeping it in the hands of Gates, your first option, absolutely cannot happen, since he is dead. The government can either take a reasonable tax on it, like they do every other source of income, or we can let his lazy kids have a huge tax-free windfall.
The first option is consistent with our general policies on taxation. Letting heirs inherit tax-free isn’t.
[QUOTE=Fuzzy Dunlop]
Since this is a thread about the estate tax, one of the two options you are presenting is completely impossible. Keeping it in the hands of Gates, your first option, absolutely cannot happen, since he is dead. The government can either take a reasonable tax on it, like they do every other source of income, or we can let his lazy kids have a huge tax-free windfall.
[/QUOTE]
Well, I was responding to an earlier posters comment wrt Gates and his money, not to the overall theme of the thread. As to the second part of this, for one thing why the assumption that his kids are or would be lazy? Even if they are, so what? Again, the money isn’t going to be sitting around in Scrooge McDucks vault or hidden under a mattress somewhere. If they squander the money then the government will still get it’s piece, regardless. Finally, again, Gates is a bad example (which was my original point) because he’s not planning to give his kids much of his money…he’s planning to give most of it away before he dies, and give the rest away in endowments and such when he does die.
Yes, but I disagree with the policy. Oh, it’s not a huge thing for me (though I’ll certainly be affected by it when my own folks die), but I think that taxing inheritance is a bad idea. Tax away at the profits the money generates from investment or whatever, but to snatch wealth when someone dies? No, I disagree that this is a wise use of that wealth for the public.
Why? We like to think of America as a meritocracy, and nothing is more antithetical to that idea than inherited wealth.
Because I think that wealth that has been accumulated by an individual should go to the people he or she wants it to go to, instead of being snatched by society via fiat. After all, it’s wealth…it’s not a bunch of bundles of $20 stuffed in a mattress. The government (i.e. we, the people) is ALREADY going to get our cut, since that money is going to be invested somewhere, is going to generate additional money, and we get to tax that part…unless the folks inheriting it are fools, in which case the money is going to dissipate back into our system anyway, and probably still generate tax revenue.
Folks inheriting their parents accumulated wealth does not make the US the equivalent to the old European aristocracy. Wealth isn’t synonymous with a bunch of bags of gold coins in Scrooge McDuck’s vault, or Richy Rich’s swimming pool full of dollar bills. In Gates case, a lot of it is tied up in Microsoft…one of the larges and most profitable companies in the world, generating a huge amount of tax revenue and jobs as well as wealth for many, many people. I’d rather that the goose keeps laying those golden eggs, to be honest.
OK, but I don’t see your point. If the suggestion is that donating your estate to charity instead of letting the government get it is a loophole that should be closed, then I guess “loopholes” can never be closed.
But the MacArthur example speaks to a kind of assumption that I would argue against. Maybe MacArthur was motivated simply by the desire to spite the feds. But if the idea is to ensure that estates go to benefit the general public instead of just the heirs, then donating it to charity is just as good - in many instances, better - than letting the government spend it. Is the objection just that MacArthur got to decide how his money got spent, instead of Congress?
If the idea is that your heirs can’t have it, because the government wants it more, and charities can’t have it, because the government wants it more, then it seems that the presumption to which I object is still in place - in general, the government should decide where my money should go.
I am not objecting to a progressive income tax system here. I am objecting to the general notion that I have to justify keeping whatever I have, and that the default to overcome is the idea that the feds have more right to it than I do.
As a conservative (at least by SDMB standards), I believe in limited government. Therefore, it is always going to be the case that I assume the government cannot do anything unless they can justify it. They can tax, that’s certainly in the Constitution. But they can do so only, in my view, to carry out the enumerated functions of the government. Therefore, in principle, they need to point out, specifically, what function of government they are going to carry out whenever they want to raise taxes.
And “we want it and you’ve got more than you deserve” is not a legitimate function of government. IMO.
Regards,
Shodan
But why is it different than every other type of income?
If you earn $100,000 you’re taxed on it.
If you’re given $100,000 you’re taxed on it less the gift allowance.
If you win $100,000 in the lottery you’re taxed on all of it.
If your investments return $100,000 in capital gains, you are taxed on all of it.
If you find 100,000 in a cotton bag with a printed on it, you’re even taxed on that.
So why do we need different policy when you’re given $100,000 when your parents die?
[QUOTE=Fuzzy Dunlop]
But why is it different than every other type of income?
[/QUOTE]
It’s not income. It’s a transfer of wealth from a parent to a child. Also, you ALREADY taxed the money when it was earned in the first place. Plus, you will tax it if it earns any additional income via investment. Or if it’s property, you’ll get taxes out of that too. Right?
Yup. And what’s left over should be mine, to waste on hookers and blow or invest, as I choose. If I invest it, you get to, you know, tax me again on the earnings. But if I die, you get a big chunk of it again by fiat. And you figure that’s fair? I don’t see it that way, to be honest.
Because getting an inheritance isn’t equal to earning income, IMHO. And, it’s not like you (i.e. society or The Government) STILL won’t get your chunk, regardless, because, like I said, this isn’t Scrooge McDuck here. If it’s property, you’ll get property taxes. If it’s wealth, then it’s probably going to be in some sort of investment vehicle…or even in big boats, boob enhancements and fine cigars rolled on the thighs of virgins. All of which means jobs for someone, jobs where you can, you know, tax the folks earning an income.
I don’t object to MacArthur setting up his various charities. I just find his motivation for doing so interesting and illustrative of a general contempt toward democratically elected government which (in the US at least) seems to go hand in hand with obscene wealth, no matter the source. Sure the wealthy dress up this motivation in terms of “fairness” and “government inefficiency”, but deep down IMO the just don’t like the idea of democracy because it means they have to cede control. MacArthur’s example IMO was just an honest expression of that feeling. in the end, I for one think the estate tax worked here, because it motivated him thru his spite to do something for the general welfare.
The sad thing is that you actually believe every word of the above. :eek:
What about all my other examples that you ignored? Is it immoral to tax gifts? Lottery winnings? Gambling winnings?
Did you know that if you owe somebody $100,000 and they let you out of the loan because you can’t pay it back, you owe taxes on that $100,000 as if it were income?
If I agree to build a stone wall on your property that would normally cost $10,000 and in exchange you spend $10,000 worth of your time cutting down trees for me, we both owe taxes on $10,000 even though at no point did either of us exchange a single penny.
We tax virtually every increase in wealth as income, but you think inheritance alone should be exempt - why??
[QUOTE=Fuzzy Dunlop]
What about all my other examples that you ignored? Is it immoral to tax gifts? Lottery winnings? Gambling winnings?
[/QUOTE]
I didn’t ignore them…they were, IMHO, all the same as the first example. They are all earned income, and are all rightfully subject to taxation. Inheriting stuff from your folks or grand folks or family, well, isn’t. Again, IMHO. And it has nothing to do with morals, especially since I don’t know what those are.
Why yes, in fact, I did know that.
Yes, but if my dad comes over to my house and helps me build a retaining wall, I merely owe him a nice BBQ dinner and some tequila…and I don’t have to account for that at all on my taxes.
I explained it to you already. Now, you can discount, disagree with or not accept my explanation, but it seems pointless for me to do it again, don’t you think?
So you’re saying if your dad gives you a gift of $100,000 while he’s alive it’s totally ok that we tax it, but if he does it after he dies it’s no longer taxable.
It’s becoming completely obvious that this is pointless, yes.