lets say Obama enacts a law that truly redistributes the weath...

[XT]

I disagree, but even if you are right I STILL would say that those scions should inherit the bulk of their parents assets. I certainly want my own offspring to inherit the bulk of my assets and goods when I die.

If I can live off the interest, dividends and other income generated by my dad’s huge estate (theoretical, believe me), I have no incentive to achieve.

So what? Even assuming this is true society still gets it’s cut after all. Even if the person inherits their wealth and never makes another investment but just sort of lets it ride (which, if they do this, they will probably eventually run the well dry…or THEIR kids will), that capital isn’t just sitting around doing nothing. If it’s in a bank then it’s providing capital for the bank to loan out to folks like you and me for cars and ponies and such. If it’s in the stock market then it’s capital for the companies invested in. If it’s in bonds or mutual funds…well, you get the idea. Whatever it’s invested in WE will get our cut…in fact, we will benefit in several ways.

If forced to get out there and earn a living, I might have invented a better battery and made the electric car feasible.

Well, no…it doesn’t really work that way. After all, you, spoke-, haven’t inherited vast amounts of wealth…yet afaik you also haven’t invented a new electric car either. I certainly wasn’t born with a silver spoon in MY mouth, but I have failed to invent a better mouse trap either somehow, despite having to earn a real living.

Taking away the wealth from the children our theoretical rich dude has earned through his lifetime isn’t going to make them get off their butts and go invent a cure for cancer…it’s merely going to take away their parents legacy. And it’s not going to benefit society more either IMHO, since the capital that WAS invested in banks, bonds, stocks, etc is now simply being shoveled into the public’s maw to fund gods know what.

But hey, why do that when I can just go skiing with my buds at St. Moritz?

Well, a couple of things here. If you are skiing with your buds at St. Moritz then you are paying for goods and services there…which is jobs and capital injected into the local economy of St. Moritz. And when THEY pay taxes that is funds injected into the federal system as well. So…we get our cut. And unless you are planning to spend every waking moment and all your assets skiing your life away, while you are enjoying the slopes your money (a.k.a. capital) is working away, providing others with jobs or funds to expand or whatever. Like I said, whether you are invested in stocks, mutual funds, bonds or whatever, that capital is working even if you aren’t…and We, The People get our cut of it. Even while you are skiing.

-XT

[Shodan]

@spoke-

Your argument has been that most of the wealthy are self-made. If that is so, what difference will it make if estates are taxed? The cream will rise to the top anyway, right? They have no need of inherited wealth to make their fortunes.

But the government has no more right to grab earned money than it does inherited money.

Now the truth is I doubt your “studies,” since they seem to rely entirely on self-reporting by the wealthy. I’ve never met a rich person yet, even those who inherited chunks of money, who didn’t believe in their hearts they were self-made.

So, you believe that your personal experience of the wealthy people you have met is valid, and the study of 1500 of them is not. Well, OK.

Since you want to cast the debate in moral terms, what moral right do heirs have to an inheritance? How did they earn it?

Well, as pointed out by Sinaijon, strangers have that much less right to money they have not earned than the heirs do. Are you saying that poor people earned the money that is transferred to them by the government?

The other part is the part I mentioned earlier. It is not the case (in my view) that an estate belongs to the government by default, unless the heirs can show otherwise. The money belongs to the ones who earned it, and does so until the government can show that it does not. That’s what I meant by saying that the default is not ‘the government owns this until proven otherwise’.

People earn money. Therefore, it belongs to them. The government has to justify its actions if it wants to take that money.

And part of owning something is the ability to decide how to dispose of it. If I own $100 but the government says I cannot give it to my children, but must donate it to the poor, then I don’t really own it in the sense that I would if I could spend it on whatever I wanted.

And why shouldn’t it be taxed, same as any other income?

It is.

The issue is, the fact that I own a lot more than you does not create any right on your part to receive any of it.

There are two ideas here that are being conflated.

One is, the government needs X amount of money to perform its necessary functions. How then can we extract X from the society with minimal impact on its members and wealth-generating capacity. That is certainly an idea that lends itself to progressive taxation systems. However -

The second idea doesn’t start with any definite amount X at all. It assumes that the needs of government is infinite. It looks around. If he has a lot more than me, then the government should take it away from him and give it to me, because it’s “not fair” that he has more than me.

That’s the part I object to.

Children of the wealthy have no moral claim on those assets. They didn’t earn them. And the rich dude who did is dead.

Well, then lawyers who steal from an estate, or nursing home employees who steal the belongings of the recently deceased, really have nothing to be ashamed about, do they? Cite. Cite. Cite.

[Algher]

Result: The creation of the mother-of-all tax avoidance schemes.

Estate tax, for example. I own a fairly large plot of land. I purchased it after it was clear-cut. It currently serves as the retirement home for my parents, and as a playground for me, my siblings and our children. I have very carefully paid a large amount of money to have this sitting in a series of convulted trusts and limited partnerships to ensure that zero estate tax and zero liability can hit this property. You see, while it was cheap when purchased - it has gone up significantly in value (“they ain’t making much more forested countryside”). If I left this in one name, there is a high probability that it would hit the estate tax limit when added into other assets that I own. My kids would have the choice of clear cutting it to pay the taxes, or selling the property, or borrowing against it for the taxes. To prevent that, I hired lawyers. GOOD lawyers.

Now - I am far from being in the top tier of the nation, yet I was able to get that done. I promise that you will see the equivalent occur across the nation. Paris Hilton will suddenly get “paid” by daddy’s firm. She will also get paid by a foundation. She will get 1% loans to make amazingly brilliant purchases. Baron Von Hilton WILL make sure that Paris gets the maximum amount of money. You might get a little more cash, but the biggest beneficiaries will be the attorneys and accountants.

[Spoke]

@Rand_Rover

Well what about the incentive of those whose wealth exceeds the cap? And what about the incentive of those who would receive distributions of others’ wealth under this plan?

Who’s talking about “distributions”? We’re talking about infrastructure improvements. Or just maybe paying our debts instead of borrowing from China (and thus mortgaging our future). Nobody is talking about handouts.

[Spoke]

@xtisme

And unless you are planning to spend every waking moment and all your assets skiing your life away, while you are enjoying the slopes your money (a.k.a. capital) is working away, providing others with jobs or funds to expand or whatever.

I get really tired of this argument. Look at the plot of land Algher bought. That investment is just sitting there appreciating (or perhaps, in this market, depreciating). It isn’t creating jobs, or spurring our economy, or keeping Tinkerbell alive. It’s just sitting there.

[Algher]

@spoke-

I get really tired of this argument. Look at the plot of land Algher bought. That investment is just sitting there appreciating (or perhaps, in this market, depreciating). It isn’t creating jobs, or spurring our economy, or keeping Tinkerbell alive. It’s just sitting there.

Actually, it is growing and changing Carbon into Oxygen. It is my own private carbon sink. You want me to develop it into houses? Fuck - then let’s pay off the national debt by clearcutting all of the forests in America, and sell off all of the National Parks.

[Xema]

@gonzomax

Yes Paris Hilton did a good job of being born.

She might not be the very best example of inherited wealth. Yes, she has it and it’s how she got going. But her career as a ‘professional celebrity’ currently yields an income of something like $5 - $6M a year. So she’s now just another hard-working gal.

[Xema]

@spoke-

Who’s talking about “distributions”?

The OP?

[Algher]

@spoke-

I get really tired of this argument. Look at the plot of land Algher bought. That investment is just sitting there appreciating (or perhaps, in this market, depreciating). It isn’t creating jobs, or spurring our economy, or keeping Tinkerbell alive. It’s just sitting there.

Taking this on again, because I think that your misunderstanding of the economics really does show the problem with “soak the rich” taxation.

I made a purchase of something that I like. I could have bought a TV, or a boat, or many trips toe ski slopes. Instead, I bought land that, at the time, had been harvested.

My money paid off the loans of a logger, plus helped him profit. He went off and bought another plot of land, cut down the trees, and sold it to another Californian who wanted a piece of open property. The lumber went to the mill where it was turned into fence posts, log cabins and pulped for paper.

My purchase spurred many jobs. Taxing me will not create any additional jobs, it will just ensure that my land goes to someone a bit wealthier who can afford the taxes.

[Spoke]

@Xema

The OP?

Granted, but the remark wasn’t directed at the OP, it was directed at me, and I haven’t advocated for redistribution except in a very indirect way.

[Spoke]

@Algher

Taking this on again, because I think that your misunderstanding of the economics really does show the problem with “soak the rich” taxation.

Try again without the condescension, please.

And don’t try to bullshit me, because I own land myself. Several parcels, in fact. I have no illusions that by owning this property I am somehow stimulating the economy or that my owning investments is somehow a virtue unto itself. The land just sits there appreciating (lucky for me). It doesn’t create a single job or perform magic tricks for sick children or do anything else that benefits society. It benefits me and me alone.

[Xema]

Note that history provides examples of what the OP has proposed. Robert Mugabe is the architect of a recent such scheme.

[Spoke]

History also provides examples of stratification of wealth. It leads to such things as the Russian Revolution.

So you have to ask, should you wait for the balloon to burst, or let some of the air out?

[Algher]

@spoke-

Try again without the condescension, please.

And don’t try to bullshit me, because I own land myself. Several parcels, in fact. I have no illusions that by owning this property I am somehow stimulating the economy or that my owning investments is somehow a virtue unto itself. The land just sits there appreciating (lucky for me). It doesn’t create a single job or perform magic tricks for sick children or do anything else that benefits society. It benefits me and me alone.

No, my purchase DID stimulate the economy by provided needed capital to a logger to be able to purchase additional property to continue working. The fact that my land is now providing housing for my parents apparently slipped your attention as well. The improvements have generated appropriate additional property taxes as well.

Why don’t you try again without the slam.

[XT]

@spoke-

I get really tired of this argument. Look at the plot of land Algher bought. That investment is just sitting there appreciating (or perhaps, in this market, depreciating). It isn’t creating jobs, or spurring our economy, or keeping Tinkerbell alive. It’s just sitting there.

I’m sorry that you are getting tired of the argument, but it’s how it works. The vast majority of capital doesn’t just sit around doing nothing. Even if the rich are idle their MONEY isn’t.

Take your land example. Certainly if someone invests money in real estate it can just sit there doing nothing for long periods (especially right now…though normally this wouldn’t be the case)…except that the land is considered an asset and is taxed. So…We the People get our cut still, even if the Worthless Rich Bastard(all rights reserved) invests in something that is totally useless.

But you have to admit that such investments are going to be the exception, by and large, instead of the rule…right? Rich folks are not going to STAY rich if they invest badly…and if they DO invest badly then it’s sort of like wealth redistribution right there, ehe? And it has the added benefit that the government didn’t have to stick it’s gun to the head of the rich guy and steal his money…the rich guy became a poor guy all on his own!

-XT

[Spoke]

@Algher

Why don’t you try again without the slam.

Algher, I apologize. My tone was unnecessarily hostile. My annoyance is not with you but with a libertarian line of argument I just don’t buy, which somehow elevates passive investors into noble benefactors of society simply by virtue of the fact that they own stuff.

[XT]

Well, if that was directed at me, then I’ll simply point out I never attempted to portray investors as ‘noble benefactors’, selflessly doing what they do for the good of society…that’s more your sides position after all. What I did say is it’s stupid to attempt to loot the rich as the OP is positing. I also attempted to explain WHY it’s stupid to attempt to do so…and why perhaps attempting to swipe the loot for the good of The People™ from the grasping clutches of their children might not be the optimal course to take.

-XT

[Rand_Rover]

@spoke-

Algher, I apologize. My tone was unnecessarily hostile. My annoyance is not with you but with a libertarian line of argument I just don’t buy, which somehow elevates passive investors into noble benefactors of society simply by virtue of the fact that they own stuff.

You need to broaden your definition of the term “investment.” A person invests not only when they buy stocks, bonds, and raw land, but when they finance a manufacturing operation, a film, a plumbing business, whatever. It is easier to see how this type of investment creates jobs, but the more passive type does also.

[Grumman]

@spoke-

History also provides examples of stratification of wealth. It leads to such things as the Russian Revolution.

So you have to ask, should you wait for the balloon to burst, or let some of the air out?

Ah, the “Give them your stuff, or they’ll kill you” rebuttal. Well played.

[Clothahump]

@Critical1

would this be a good thing long term or no?

Not just no, but hell no.