Look, life insurance surely is a way to structure your estate to avoid paying taxes. As you say, you have to purchase life insurance when you’re young and healthy, or you pay through the nose. And? That’s the point. If your estate is going to be taxed at 100%, you might as well use up your estate to purchase a substantial life insurance policy payable to your heirs.
Some people already do this to structure their estate around inheritence taxes, which are not anywhere near 100%. Don’t you think that would, you know, change if inheritence taxes were 100%, or 95%, or 90%, or some other confiscatory amount?
The other obvious social policy point is that if you tax an economic activity at 100%, that economic activity goes completely underground, and you actually collect 0%. If estate taxes are 100% then everyone who has any estate whatsoever is going to structure their financial affairs to have zero taxable assets at the moment of death. Obviously that’s going to be a hard to do, and people who die suddenly might leave behind some taxable assets. But anyone who can plan ahead is going to plan on having nothing left behind.
And besides, if the whole point is to achieve absolute equality of opportunity, why the fuck don’t we just tax all economic activity at 100%, and divide everything up exactly equally? Why should people who by accident of birth are smarter or more talented or more disciplined than their fellow citizens be entitled to more than anyone else? What makes them so special?
There aren’t many smart people using life insurance as a way to bypass estate taxes right now. They’d have to be pretty stupid to think that premiums on a whole life policy would be less than the taxes their heirs are going to pay on the inheritance.
On top of that, you could never outlaw life insurance, as there will always be people who need it to replace a spouse’s lost income.
Granted. The question is, how many would there be if inheritance taxes were 100%?
I don’t see how that can be avoided. I die, the government takes everything I have. If you exempt life insurance, I just put as much of my estate into life insurance as I can manage.
What about my house? If you don’t exempt my house, I die, and my wife has to sell and move (or come up with half the value of the house). If you do exempt it, I just move into the most expensive house I can afford, and buy mortgage insurance. Sure it will cost a lot, but less than 100% of my assets.
How about my retirement investments? Do you take all of that, or half? Then I will divorce my wife (on my deathbed) and give her her half, and then most of the rest in lieu of alimony.
Of course, I could simply will my assets to a charitable trust, and hire my wife as administrator.
I think you underestimate the cleverness of tax attorneys. A 100% death tax simply raises the value of tax shelters. Any tax shelter that costs less than 100% of my assets is better than dying and letting the government grab it.
I’m typically unable to remember who is who on this board, so I’m not particularly surprised to not be aware of the presence of someone for so long, but I’m surprised in your case given the peculiar opinions you’ve been expressing. Have you recently completely changed your views/opinions?
Correct. In my ideal society, children would be raised by those who are properly educated in the art of child-rearing and who are passionate about the task, not by people who were by random chance their DNA donors regardless of ability.
Would the child-rearing staffers be expected to assume a tiny bit of theoretical risk in, potentially, protecting the children from fire, drowning, or slavery?
As Der pointed out, the proposal was to have a) kids not know their parents and b) rotate between homes on a regular basis. Nor can the caregivers bond with the kids. So the children won’t form ties with anyone or even make friends. It’s likely that this is a recipe for a set of toxic orphanages and emotionally stunted individuals. Even Benjamin Spock would have difficulty working under such circumstances.
