The point is that even the super rich like the Rolling Stones are willing to go to great lengths such as moving to another country to pay less tax. If they are willing to move possibly they would be willing to work less as well. There are probably plenty of inframarginal cases but that does not mean we should stop thinking on the margin. On the margin the higher the estate tax the more people will do to get around it. There is no way to know if 50% is an acceptable rate so that enough rich people do not alter their behavior to get around it.
So, once you get past a certain level of wealth, the descendants aren’t being stewards, they are the leisure class, they don’t have to satisfy anyone or anything. I mean we’re talking about estates in excess of $10 million/couple at the low end. Their assets are managed.
Society is not giving billions of dollars to Paris Hilton. Her grandfather would have been the one to give her any money. Since it is his money, it is his value that must be taken into account.
If an heir succeeds in growing or maintaining wealth, that is a demonstrated value for consumers. If an heir loses wealth, it is redistributed to people who are satisfying consumer desires. Allowing large inheritances is a no loss proposition.
Not true. Your savings provides capital for banks to recognize potential consumer satisfiers. IOW, you left it to the experts. If your inheritance was confiscated, it would likely no longer be available for experts to invest. It would instead go to families or individuals who have shown no history of satisfying consumer desires.
Whereas if it’s collected in estate taxes, the government just burns the money or buries it deep in the earth’s molten core or does some damn thing that prevents it from ever entering the banking system. It clearly doesn’t satisfy consumer desires, as no consumer anywhere has ever desired a road upon which to transport his goods or police to keep his goods from being stolen or firemen to keep his goods from burning up or any of that stuff.
That’s Farnabynomics 101.
If Hilton leaves her money with wise managers, they identify opportunities for profit (ie opportunities to satisfy desires at lower cost inputs).
Would you rather investors with a track record of identifying opportunities to satisfy consumer desires manage the money or the people who haven’t? That is the choice.
Remember that investment in capital results in higher production possibilities (More food).
The fact that there is a leisure class is offensive to our Protestant sensibilities, but there is no harm to society.
If they were Americans, moving would not be enough, they would have to renounce citizenship. There are tax consequences to renouncing citizenship.
Are we still talking about the estate tax? Or have we moved onto the income tax?
You are basically making an argument for getting rid of all estate taxes. That is of course ridiculous (even if that exactly what the Republican tax plan does).
Some of the effects you are talking about here are extremely marginal and you would basically give up taxation to avoid those marginal cases.
I have yet to see any cite that estate taxes on estates in excess of $10,000,000 has any effect on the lifetime income of the decedent.
How is the value of your road demonstrated? Value can only be demonstrated through voluntary exchange.
And what is the benefit to society in letting her grandfather give her all that money free of taxes? It is no longer his money once it is taxed. Its kind of the big issue that some people have with taxes, its not theirs after it is taxed.
There is opportunity cost in giving the capital to an incompetent heir rather than a competent capitalist.
What makes the heirs any better repositories for that wealth than you or me? From a societal perspective we no longer need dynastic accumulations of wealth like we did during the early years of capitalism to fund enterprises. We have this thing called the capital markets now and the market decides who would best grow and maintain that capital. We no longer rely on business acumen being a heritable trait.
There is NOTHING about free markets that favors large transfers of dynastic wealth to people who won the genetic lottery. The argument seems to mostly rise from partisan aversion to taxes generally.
I have yet to see a cite that lifetime productivity is influenced by an estate tax on assets over $10,000,000.
I don’t think anyone’s making the claim that the benefit is to society. Letting individuals keep more of their money is a good thing in my eyes, but it’s a good thing for those individuals, not society at large.
So why does the benefit of that interest have to go to the heirs. Would you feel better if the federal government couldn’t use the estate tax money to feed poor children and had to use it to fund the SBA, and other federal elements of the US economic infrastructure (perhaps federal science grants for basic scientific research)? Or is it really because you think grandpa Hilton is getting ripped off if his money doesn’t go to Paris?
We are talking about estate taxes. The people with a track record of managing money are D-E-D dead. Do you believe that ghosts communicate with the living?
Simple. Lie down in the middle of it. If the road has no value, you will be able to take a nap and then get up and go about your business. If it does have value, the results for you will be… less pleasant.
Once again, our capitalistic system no longer requires dynastic wealth. You don’t need to give the money to Paris to get the money into the hands of those managers especially if Paris gets to pick the managers.
What track record does Paris have?
Sometimes you are pushing a rope on capital investment. There is no shortage of capital in a sub 5% prime rate environment.
It offensive to meritocratic sensibilities.
How many high school graduates know what Net Worth is?
I don’t even know if my high school had an accounting course when I was there. I was put in College Prep and that was that.
Double-entry accounting was 400 years old when Adam Smith was born and 500 years old when Marx was born. But we don’t hear Capitalists, Communists or Socialists suggesting that it be mandatory in our schools. So what would the distribution of wealth be if it had been mandatory in high school since 1960?
A Swedish high school teacher who claimed he was a Socialist told me that he objected to the idea on the grounds that, “the math would make capitalism seem logical to the students.”
ROFLMAO
But then capitalists should be in favor of the idea, right? 
The “smart” people that believe in ideologies want other people kept ignorant for their own good.
:smack:
Wait, you’re not saying that roads have no value are you?
Yes, and public policy should be based on what is good for society tempered by a healthy respect for individual rights. The individuals in this case are dead. The dead deserve to be treated with dignity but not over the welfare of the living, do they?
I agree that double entry accounting and basic statistics would be very valuable additions to the high school curriculum (much more useful that trigonometry or calculus in 99% of cases) but WTF are you talking about?
Are you in the right thread?