Oh, and pkbites, when it comes to picking on the rich (which I disapprove of as pointless social prejudice, btw), who was it who opined on this very thread that “the only thing worse than a liberal is a rich liberal”? Seems that you yourself have no problem with criticizing the rich more harshly than the non-rich—as long as they disagree with you politically, that is.
The envy and greed stuff I shall leave to pkbites who actually made that claim, and I shall concentrate instead on what I said. (I shall also refrain from trying to get you to defend every statement made by estate tax defenders by saying “you and so-and-so say…”).
A rather simple matter, really. For most issues, you will not find ads taken out signed by a group of people whose common characteristic is the fact that they all happen to be insanely rich. Take abortion, NAFTA, or the latest election fracas - you will not find ads by a bunch of people saying “we’re all extremely rich guys and we feel…” The reason for these guys taking out such ads in this instance, and the reason why this is considered noteworthy (note, for example the title of this thread) is because these people purport to be those who would be most affected by these laws (which they are, in absolute dollars). In sum, these people are not expressing their abstract opinion, which may indeed be, as you say, a purely principled one (also one which no one cares about). They are saying, in effect “even though we are being so hurt by these laws, we still believe that they are good ones, so certainly people who are not affected as much should go along with it”. It is this insinuation that I find objectionable and sanctimonious, as I believe that the absolute effect is greater on someone who is not as wealthy as they are.
I love coming here…so much intellegent debate.
One thing that I’m not sure has been mentioned…the assets that PKBites (or anyone else, not to pick on PK) is due to inherit are not his. His wealthy aunt (or whomever) could lose her shirt playing blackjack in Vegas next week. Or, before she dies, she could change her will and set up a foundation for all the alleycats of Paris. Seems to me that inheriting something after estate taxes is still better than inheriting nothing at all. Yes, even if you have to sell the family farm, you are still getting in excess of 45% of the value - which has to be at least $650,000 before FET kicks in. Most people would love to have that problem (I had that problem, well, not the family farm part, but the subject to estate tax one, wasn’t really tough at all).
As has been pointed out, people do not pay estate taxes, estates do. The person who owned the assets is dead, and isn’t writing any checks, even to the IRS, and the beneficiaries won’t inheirit anything until the estate (including the tax bill) is settled.
A little pre-beddy bye post.
Ahem, no it does not. As a recent poster has indicated, its not your money until the old man, or woman, is dead. Unless we are adopting neo-tribal principals. But then this is rather in conflict with a merit-based free-market system. Equality of opportunity and all that. So, its really not a matter of taxing your money --again, let’s recall the concept rent-seeking behaviour-- but rather maintaining an inter-generational equilibrium.
Moreover, we (in theory at least) allow for government action to maintain a healthy free market. Insofar as action is required to maintain equilibrium --short, medium or long term-- well that seems quite an excellent justification for me. Perhaps, given my experience in places where free markets don’t work (terribly well) I am hyper-sensitive to the subtle factors which maintain their health.
So, once more, I am waiting for an economically based refutation or at the very least something more substantive than the above. Vague moralistic hand-waving strikes me as avoidance.
IzzyR: The reason for these guys [i.e., wealthy opponents of estate tax repeal] taking out such ads in this instance, and the reason why this is considered noteworthy (note, for example the title of this thread) is because these people purport to be those who would be most affected by these laws (which they are, in absolute dollars). In sum, these people are not expressing their abstract opinion, which may indeed be, as you say, a purely principled one (also one which no one cares about).
Huh? How are they not “expressing their abstract opinion” that having an estate tax is better than not having one? If that is indeed an opinion based on principle, why is it something that no one would care about? Yes, they are using the fact that the estate tax personally costs them money to draw attention to their opinion: “‘Please Don’t Cut My Taxes,’ Says Billionaire” is, after all, right up there with “Man Bites Dog” as an attention-getter. But what is necessarily “unprincipled” about that?
They are saying, in effect “even though we are being so hurt by these laws, we still believe that they are good ones, so certainly people who are not affected as much should go along with it”. It is this insinuation that I find objectionable and sanctimonious, as I believe that the absolute effect is greater on someone who is not as wealthy as they are.
You seem to me to be reading a great deal into such statements, and drawing some puzzling conclusions from them. In the first place, I have not seen any such statement that “people who are not affected as much should go along with it.” To say “we are wealthy people who are personally affected by the estate tax, yet we support it because we think it’s beneficial” is not the same thing as to say “therefore nobody else has any right to beef about it.” Not even “in effect”.
In the second place, you seem to be implying that nobody has a right publicly to express support for a measure that would have a bigger personal impact on others less well-off than themselves. I, for example, do not support cutting income taxes on my income bracket: not only do I not feel it’s necessary for my personal financial solvency, but I think there are more productive ways of using the revenue that it would eliminate. Yet there’s no doubt that there are others in my bracket to whom a tax cut would bring some much-needed financial relief: that is, what you call the “absolute effect” of the tax cut decision is greater for them. So is it “objectionable and sanctimonious” for me to express my opposition to a tax cut? Why? Is nobody allowed to support any policy in defiance of their immediate financial advantage unless it will hurt them worse than anyone else?
In the third place, at least some of the wealthy people protesting repeal are the ones hardest hit by the tax. For example, the Call to Preserve the Estate Tax mentioned by jshore is supported by Responsible Wealth, an association of a few hundred people in the wealthiest five percent of the population. Yet as they point out, estate taxes are currently paid only by the wealthiest two percent of families. So, many of the wealthy who oppose repealing the tax seem to be not the super-duper-wealthy whose opposition you consider “sanctimonious”, but instead the “ordinary millionaires”, as it were, who suffer the most from it. And surely they, at least, have a right to express their opinion?
(I apologize, however, for indiscriminately lumping you together with pkbites; I wouldn’t care for that either.)
[QUOTE]
*Originally posted by Collounsbury *
**A little pre-beddy bye post.
Ahem, no it does not. As a recent poster has indicated, its not your money until the old man, or woman, is dead.**
[quote]
Yes, it does. (So there!) The guy is already dead at the point that the government is taxing it.
You can use as many highfalutin’ phrases as you like, but basically the government is interfering with your property in order to achieve a certain social ideal. “Vague moralistic hand-waving”? Whatever.
But Izzy, it isn’t your money. Until the Estate Trustee cuts you the check (which he or she won’t do until the tax bill is settled, as well as paying off any debts the estate has, making any charitible contributions specfied, etc) you cannot spend it, you cannot borrow against it. I don’t see how, until you can either spend it or borrow against it, you can claim it is yours. Until you can do either of these things, it belongs to the Estate (who has no rights to spend it or borrow against it other than its legal obligations).
kimstu
The problem is that the reason why these statements of opinion by these billionaires are thought to be noteworthy (as compared to the opinions of millions of equaly principled other people) is because of the false suggestion that they are the ones who suffer the most.
To use your example, if you were merely expressing your opinion against cutting taxes for your bracket, that is not sanctimonious at all. But if you are saying “hey, even I, kimstu, feel that a tax cut is not necessary for my own bracket” it would be sanctimonious, to the extent that you are not as hard up as others in your bracket (as you say).
I don’t know anything about the “Responsible Wealth” group. I was referring to Buffet and his group of well known billionaires.
Dangerosa
From a legal standpoint, the money is not yours. But a legal distinction is not necessarily a moral one. Surely you would not support a lawyer who embezzled all the money, for example.
Minor nitpick here: unless it’s changed in 20 years, the estate gets a new tax ID (an ‘employer ID’, or EID, for short) of its own. IIRC, it files the decedent’s final 1040 under his SSN, but income and expenses after death go on the 1041, which uses the EID.
I think the comparison going on was about the same dollar being taxed multiple times, to indicate that the estate tax is not alone in taxing dollars that have been taxed before.
FWIW, the reason the FET gets to 55% so quickly is that, IIRC, that’s the same rate table they had 25 years ago. (And who knows how much further back than that.) $3M was a much bigger deal back in 1976 than it is today.
For all the time Congress has upped the unified credit, they’ve not done a thing with the table. Is there a case for changing it? Sure. Which way? We’d probably disagree - and so would the parties in Congress, which is probably why they haven’t tinkered with the rate table.
If they made me emperor for a day, I’d lower the tax rates for estates at the low end of taxability, and have a bunch of higher brackets out there too, raising the rates at exponential intervals such as $10M, $100M, $1B,…$1T. (I figure we never figured anyone would be worth $100B, either, so why not plan ahead?)
But then I believe that it’s legitimate for part of the purpose of the FET to be the prevention of the formation of a hereditary aristocracy, and I don’t expect you do.
Filling out an estate tax return is certainly more complex than the typical upper middle class income tax return with itemized deductions, cap gains, and the like, but not earthshakingly so, unless the decedent held property in complex ways.
I expect that one would need to hire an expert of some sort to put a value on a closely held business, such as the dry-cleaning business you mentioned, for estate tax purposes.
I’m having a hard time understanding how this could be the case. I’m willing to be educated on the subject, but you’ve got to give me at least an approximation of the situation you mention. Given that 55% is the top rate - and has been, for quite some time now - I need an example to understand how a higher effective rate is possible.
It is a confiscatory tax. But that’s not all. It’s also the place where the government can tax with the least consequences to any individual, or the economy as a whole. (At least, that’s what I argued in the previous thread on the subject, quoted on p.1 of the present thread. Reasoned responses and attempts at refutation sought.)
I don’t feel the least bit bitter toward rich people. But this country isn’t just a collection of individuals; it’s a society with rules by which we all work together. To some extent, we all have an obligation to make the whole system work, not just our own little lives. The rich have benefitted more than most from their participation in a lawful society, and can better afford to give back a disproportionate share of their wealth than people further down on the scale can afford to give back a much smaller share - as evidenced by the very fact that the share of wealth owned by the richest 1%, or 10%, of Americans, is still going nowhere but up.
It seems clear to me, having lived at a variety of income levels in recent years, that now that I’m earning an upper middle class income, I can afford that 28% marginal rate far better than I once could afford 15%. That higher rate is less of a burden now, than the lower rate was then. This is an example of what I mean by “taxes that have less impact on the lives of the individuals being taxed are to be preferred to those having greater impact,” and I’m sure that if I was earning enough to be in the 39.8% bracket, it would be even less of a practical imposition to be taxed at that rate than it is to be taxed at 28% now.
I’d contend that the onerous taxes aren’t the estate tax, or the upper brackets of the income tax, but the payroll tax, and the state income and sales taxes. These taxes knock a major hole in the wallets of people who don’t have a whole lot there in the first place.
-
I still need a skeleton of numbers under the flesh of description. As I’ve been saying, I need to understand how the stretched-out payment schedule still fails to help a business such as this. I’m willing to be educated, but without numbers, none of it proves anything.
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I’m willing to grant you that most successful people work pretty hard, but I don’t see the relevance of that. Quite a few unsuccessful people work very hard, as well; you’ve got to work hard when your employer has you over a barrel, and you can’t afford to miss too many paychecks if you wind up fired.
Izzy,
The lawyer would be doing something illegal as well as immoral.
And I don’t think the money is morally yours yet, either. Any debts the deceased left must be taken care of first, for instance, regardless of taxation. If the money were morally yours, the estate wouldn’t need to pay off debts you didn’t accrue.
Well, I am not sure who Buffett is organizing, but the prominent group that includes William Gates Sr., a few of the Rockefellers, George Soros, Paul Neumann… is the group organized by (or in cooperation with) Responsible Wealth. To learn more about it, including the criteria for signing on, go to http://www.responsiblewealth.org/
IzzyR: *The problem is that the reason why these statements of opinion by these billionaires are thought to be noteworthy (as compared to the opinions of millions of equaly principled other people) is because of the false suggestion that they are the ones who suffer the most.
To use your example, if you were merely expressing your opinion against cutting taxes for your bracket, that is not sanctimonious at all. But if you are saying “hey, even I, kimstu, feel that a tax cut is not necessary for my own bracket” it would be sanctimonious, to the extent that you are not as hard up as others in your bracket (as you say).*
Okay, I guess I’d have to see the pronouncement from “Buffet and his billionaires” to know whether it makes a similar claim. The Responsible Wealth declaration I linked to makes no insinuations about claiming to speak for all, or all of the hardest-hit, among those who are affected by estate taxes. And my web search on “Warren Buffett (or Bill Gates) estate tax repeal” has turned up no such insinuations on the part of the superwealthy either. All I can find are repeated citations of quotes from them to the effect that they believe inherited wealth discourages productivity and don’t intend to leave the bulk of their own estates to their kids, which sound like perfectly legitimate statements of their own personal views. Could you link me to, or cite for me, the specific claims by these people that you feel are “sanctimonious” and “false suggestions”?
(Slight hijack: I did, however, find some decidedly bizarre justifications for repealing the estate tax on Biblical grounds! I particularly enjoyed the combination of arguments from the Torah and “Willy Wonka and the Chocolate Factory” to demonstrate that Bill Gates’s plan to leave “only” $10 million to each of his children is eroding the “Bible-based” foundations of our society. :rolleyes: )
As kimstu and I have pointed out, but which bears repeating, those in this thread who have had most of the vitriolic comments toward the wealthy are not those of us who oppose repeal of the estate tax. In fact, some of us who argue most strongly for not decreasing taxation on the rich are much closer (at least in terms of the income percentile into which we fall) to the wealthy end of spectrum than the poor end, and include ourselves amongst those people who we believe should not be getting any tax breaks.
As you know, I like precision. Sometimes that requires a special vocabulary, and I feel the analysis is important.
No, the government is raising taxes to pay for operations. You now seem to be making the argument that you don’t want to pay taxes period, and using the estate tax as a point of entry. Aside from this being IMHO a classic case of free-riding (want benefits, dodge costs) it also seems to be a dodge for dealing with the issue head on.
So, (A) Taxes: necessary to pay for government operations.(*)
(B) Estate Tax does this and also has the side-benefit of achieving certain market-oriented results. Estate tax is primarily to fund, then is also justified by positive economic benefits.
If you feel there is a basis to refute this, on economic terms, please do so. I’m disappointed there have been no meaty critiques so far.
Well, if you would grapple with the concrete issues instead of engaging in appeals to “morality” and “fairness” then I would’t be forced to call you on this.
(*: I am well aware of course of the desire to reduce government expenditures. That is a choice. However, any modern government is going to be funded by taxes since tariffs are right out and in fact not economically efficient. Ergo, even in a libertarian state, Estate Taxes would, one should think, remain in use for the very reasons Buffet has put forth.
It strikes me that much of this opposition is not driven by a rational opposition but an emotional one. Such as the Republican party platform’s utterly irrational call for a return to the gold standard. Desire to reduce government expenditure is rational, hatred of government to the point where one no longer recognizes benefits and needs is not.)
So, everyone in the entire country should retire and move there, right? You mixed in a conversation about old people paying the property tax on their own homes with this debate on estate taxes, then you don’t even remember what you posted.
The final answer is, sometime between now and, oh, I’d say 2015, I’m going to inherit a heck of a lot of money. And though I didn’t earn a penny of it, and though it will be taxed , thanks to some of you, I’m still going to be a millionaire! nah, nah, nah, nah nah!
:rolleyes: Sorry. I just had to do that to bug those of you that hate wealth so much. Goodnight, folks. I’m going to bed.
Shrug. Since those folks seem to exist largely as your straw men… I hardly see the point.
pkbites: *Do I take your asinine post to say let’s tax old folks out of their homes and send them away?[…]
Maybe you forgot what you wrote in your own post. You were talking about people “whinning” about how they were retired and couldn’t pay the PROPERTY taxes on their own homes, remember? […] You mixed in a conversation about old people paying the property tax on their own homes with this debate on estate taxes, then you don’t even remember what you posted. *
Um, pk, RTF was quite clear about stating that he was bringing up this property-tax issue for purposes of comparison, as a “variation on the lament” about the estate tax. You then replied with a barrage of emotional rhetorical questions about both the property-tax and estate-tax issues. When RTF responded to them, he answered one of the property-tax questions as though it were an estate-tax question. That’s a pretty trivial error, and IMHO doesn’t warrant this repeated fretting about it.
And I have to say that your indignation on behalf of elderly people, or their heirs, who are suffering the consequences of drastically increased prosperity is kind of puzzling me. Are you saying that you don’t think the market should be allowed to drive up the prices of people’s homes? Because, of course, taxation (of estates, incomes, property, etc.) is directly linked to market value. Our pragmatic economist types on this thread have given several reasons why that’s an excellent way to fund government. But when you have to face a very simple consequence of that policy—namely, that when market value sharply rises, taxes will go up too—all of a sudden you can’t stand it? Kinda comes with the territory, m’boy.
But if you are so concerned about old people being driven out of their homes, let me ask you this: do you think it’s unfair when booming property values push rents sharply up, and old people can’t afford to go on renting the apartment they’ve lived in all their lives? After all, those people are much worse off than the old homeowners who can no longer afford their increased taxes, since at least they get a sizable increase in the market value of their property and can sell it for more than what they paid for it. Are we going to see some of that admirable compassion of yours spilling over onto the old renters too? Even a proposal for rent controls, maybe?
The final answer is, sometime between now and, oh, I’d say 2015, I’m going to inherit a heck of a lot of money.
So you keep telling us, and I congratulate you on your prospects (although if I were you, I’d cool it on the public speculations about how much better off you may be if “certain relatives die during that time”—not the most graceful attitude in a prospective heir, would you say?).
And though I didn’t earn a penny of it, and though it will be taxed , thanks to some of you, I’m still going to be a millionaire! nah, nah, nah, nah nah!
Honestly, pk, though I know you have a hard time believing it, nobody here—or very few, and certainly not me—is morally opposed to the inheritance of wealth per se. Good for you, honest; it couldn’t have happened to a—um, well, considering that you like to taunt other people with their comparative poverty, speculate to strangers on a message board about your hopes for your relatives’ dying, insist on interpreting your opponents’ arguments in light of the most sordid possible motives, and refuse to consider the larger policy implications of your rantings, I guess it probably could’ve. But heck, congrats again anyway. See, nobody really expects life to be perfectly fair, and very few people make themselves seriously unhappy over the inevitable disparities; as long as we have some leveling forces like the low-impact taxation Collounsbury speaks of to even out the worst of the ruts, we’ve done our duty by society.
Sorry. I just had to do that to bug those of you that hate wealth so much.
Now now, I’ve already assured you more than once that most if not all of us are morally opposed to “hating wealth”. Assuming that rich people are automatically selfish, unprincipled, and incapable of caring about anything but their own immediate interests would be insensitive, bigoted, and inaccurate. The occasional exception notwithstanding.
Dangerosa
Well, I’m not trying to claim that the estate tax is illegal. Almost any law the government passes is by definition legal. So when dwelling on what the government should do, as we are doing here, we must leave legal/illegal out of it and concentrate on what is moral. To this I repeat that your assertion that the estate is not property of the heirs is true in a legal sense, not in a moral one. The example of the embezzling lawyer demonstrates this. Do you think such a thief has not victimized the heirs?
Not at all. The money is yours subject to prior claims on the estate. To the extent that there are prior claims on the deceased, he is lacking in his ability to pass it on to you. This has no bearing on whether the government - at the point of declaring an estate tax - has tampered with private property.
jshore and Kimstu
I don’t know if they’ve overtly said that the significance of them speaking out is their own money. But it’s obvious that this is the intention. There’s no other reason for the singling out of this group, as mentioned. (It is clear from the Responsible Wealth website that they launched their own campaign in conjunction with RW - they did not merely sign up for membership in this group.) This is how it is being reported and this is how it is being perceived. I again draw your attention to the title of this thread.
From the linked article in the OP
From Time.com
Collounsbury
Yes, but sometimes one must resist the urge to get away with adding little of substance by throwing around alot of sophisticated terminology.
Have you read any of the linked material in this thread? (I know you’re big on this concept when it comes to genetics ;)). I’ll help you with some quotes.
From the Washington Post editorial
Reread my earlier post (the first one that you responded to) in which I specifically said that I was responding to this rationale.
Of course I have read the linked materials. And much more. Nor did I misunderstand you. But you continue to confuse an analysis of the tax’s effects with the reason for the tax. Bluntly, as I said above, you’re going to have to accept taxes. Now, then what’s the next step? Well, the creation of a tax structure that produces as many positive economic effects as possible.
Thus the cause of the tax is of course a need to fund spending. The tax is not being adopted willy-nilly. The choice of an estate tax is shaped by a desire to produce positive economic results. Your position seems to bizarely require that one ignore the effects of a tax or not mention them. I hardly see the point of this.
So, again, for clarity.
(a) Tax required to fund operations.
(b) Tax should be shaped to have positive market effects to the greatest extent possible.
© Estate tax fulfills a and b.
I don’t see any other relevant points. As far as I am concerned, everything else is a red-herring.
Now, arguing point A is another debate.
Arguing point B or C is relevant, I think, here. I believe that those in support of an estate tax have already put forth support, or at least a refutable argument for both points. I’m waiting to see that addressed.
Izzy,
We are going to have to agree to disagree. You seem to see taxes as some form of highway robbery. I see taxes as a responsibility I am happy to undertake for the privledge of making a great society greater (or at least I hope we can keep a good society stable). Regarding the morality of taxes, my morals are obviously not yours. I’m not going to convince you to see things my way (although you might want to try it for a day if you never have, just for a fresh perspective), nor will you convince me to see it your way (I have tried it, made me a less happy person)