What does the estate tax do that's better than an equivalent increase on the highest brackets in income tax?
This is a false dichotomy, but:
It broadens the tax base and methods of revenue generation. If you only have one method of taxation, it is easier to avoid and has very singular incentives.
Most people who are extremely rich would be more subject to capital gains tax, not income tax.
The estate tax can help mitigate cases where the wealth has already been generated and prevent that from being hoarded in a dynasty. The income tax cannot; if somebody has created a dynasty, it is eternal barring negligence. (This is not to argue the current or any estate tax is singularly responsible for or capable of eliminating dynasties).
I didn't argue against taxes on capital. The piece I was referring to was the underlying logic that the state must raise funds in order to spend them; doubly so on social welfare programs.
Yes, through debt(tax later), inflation(tax on currency holders), or tax.
Your source is a conservative think piece blog. It thinks Brexit is a great idea. More to the point it doesn't actually provide any data, aside from noting that Sweden has a wealth tax...which the US does not. It also provides examples which indicate Sweden's tax was nothing like this US.
Yea, but it still does a decent job of going into he international macro implications, and the thought behind repealing it.
It says literally nothing about macro implications of the tax let alone international macro implications of the tax. It does have a blind and unsupported claim about tax revenues. But if that was evidence of what they claim it's evidence of then we would have heard about it because it would have been the most important economic find ever.
You're right it might be his book I was thinking of that went into a bit more detail, or one of the other pieces I've read or linked. I'll try to find better academic lit on the macro if you want when I get a chance, but the basis of the international issues is in price theory.
The most relevant bit from that article:
The major problem with inheritance tax arose in family businesses in connection with intergenerational succession. These problems had much more profound consequences upon society in general and the Swedish economy. The basis for taxation, even with the relief rules introduced on several occasions specifically to lighten the burden on small and family businesses, often consisted of tied assets. Business owners were compelled to withdraw liquid assets from the business. The income, taxed as dividends, was then used to pay inheritance tax. Even if the company had prepared for the distribution of the estate, tax planning takes time, energy and sometimes money away from the core operations of the business. It was not unusual that inheritance tax drained companies of so much capital that their future development was endangered.
Families like the Wallenbergs changed their core business into a foundation to secure its future. Others simply left the country, taking their fortunes and businesses with them. Tetra Pak founder Ruben Rausing, IKEA founder Ingvar Kamprad and industrialist Fredrik Lundberg all chose to emigrate, mainly due to Swedish tax policy.
What does the estate tax do that's better than an equivalent increase on the highest brackets in income tax?
This is a false dichotomy, but:
It broadens the tax base and methods of revenue generation. If you only have one method of taxation, it is easier to avoid and has very singular incentives.
Most people who are extremely rich would be more subject to capital gains tax, not income tax.
The estate tax can help mitigate cases where the wealth has already been generated and prevent that from being hoarded in a dynasty. The income tax cannot; if somebody has created a dynasty, it is eternal barring negligence. (This is not to argue the current or any estate tax is singularly responsible for or capable of eliminating dynasties).
Please give me some examples of these eternal dynasties and citations for that last bit.
What does the estate tax do that's better than an equivalent increase on the highest brackets in income tax?
This is a false dichotomy, but:
It broadens the tax base and methods of revenue generation. If you only have one method of taxation, it is easier to avoid and has very singular incentives.
Most people who are extremely rich would be more subject to capital gains tax, not income tax.
The estate tax can help mitigate cases where the wealth has already been generated and prevent that from being hoarded in a dynasty. The income tax cannot; if somebody has created a dynasty, it is eternal barring negligence. (This is not to argue the current or any estate tax is singularly responsible for or capable of eliminating dynasties).
Please give me some examples of these eternal dynasties and citations for that last bit.
"Barring negligence" was the key point there. Dynasties are not eternal, but if there is no way to tax them once they have generated their wealth, then they can only lose their money by their own hand. That ties into having broad sources of revenue generation. You switched from asking a theoretical question to requesting specific practical examples.
And the more important point is still that this is a false dichotomy; there is no need to have a higher income tax or a more effective estate tax; you can have both!
If you are going to suggest things like "higher income tax and no estate tax", then you cannot continue to argue changes to the estate tax will not happen under this legislature or do not fit into the executive's priorities. Because that suggestion does not align with their priorities either; your own backup argument defeats you.
What does the estate tax do that's better than an equivalent increase on the highest brackets in income tax?
This is a false dichotomy, but:
It broadens the tax base and methods of revenue generation. If you only have one method of taxation, it is easier to avoid and has very singular incentives.
Most people who are extremely rich would be more subject to capital gains tax, not income tax.
The estate tax can help mitigate cases where the wealth has already been generated and prevent that from being hoarded in a dynasty. The income tax cannot; if somebody has created a dynasty, it is eternal barring negligence. (This is not to argue the current or any estate tax is singularly responsible for or capable of eliminating dynasties).
Please give me some examples of these eternal dynasties and citations for that last bit.
"Barring negligence" was the key point there. Dynasties are not eternal, but if there is no way to tax them once they have generated their wealth, then they can only lose their money by their own hand. You switched from asking a theoretical question to requesting specific practical examples. That ties into having broad sources of revenue generation.
And the more important point is still that this is a false dichotomy; there is no need to have a higher income tax or a more effective estate tax; you can have both!
So you're defense is based around the fear of something without an example in all of history to prevent something that's completely hypothetical. We have antitrust laws for a reason, and running afoul of those is not just because of negligence.
Price theory is a microcnomnic concept, not a macroeconomic concept. There are some macro people who claim to be working under a "price theory" but its not at all what you're claiming and frankly probably should not be dignified with an academic response*.
*Not because its useless but because its formulation as something new and important is dumb and wrong. Simple models to deal with complex systems are the norm, and a "backed out" approach is motherfucking Keynesian. And while it certainly have value post-lucas it is not some magical breakthrough.
edit: And i am pretty sure that the new "price theorists" consider themselves microeconomists.
What does the estate tax do that's better than an equivalent increase on the highest brackets in income tax?
This is a false dichotomy, but:
It broadens the tax base and methods of revenue generation. If you only have one method of taxation, it is easier to avoid and has very singular incentives.
Most people who are extremely rich would be more subject to capital gains tax, not income tax.
The estate tax can help mitigate cases where the wealth has already been generated and prevent that from being hoarded in a dynasty. The income tax cannot; if somebody has created a dynasty, it is eternal barring negligence. (This is not to argue the current or any estate tax is singularly responsible for or capable of eliminating dynasties).
Please give me some examples of these eternal dynasties and citations for that last bit.
"Barring negligence" was the key point there. Dynasties are not eternal, but if there is no way to tax them once they have generated their wealth, then they can only lose their money by their own hand. You switched from asking a theoretical question to requesting specific practical examples. That ties into having broad sources of revenue generation.
And the more important point is still that this is a false dichotomy; there is no need to have a higher income tax or a more effective estate tax; you can have both!
So you're defense is based around the fear of something without an example in all of history to prevent something that's completely hypothetical. We have antitrust laws for a reason, and running afoul of those is not just because of negligence.
I would say that the power of dynastic wealth is trivially obvious to see, and far more of a concern than that people with 8 digit wealth are taxed unfairly relative to people with 11 digit wealth.
Give me an example of one dynasty our estate tax has broken up.
I can give several examples of formerly massively wealthy capitalist families that suddenly decided to get into politics once the enactment of it was thus. I can also give several examples of families that's fortunes have been amassed almost completely based around political service The estate tax increases the level of inequality and agency the wealthiest have over power and capital, not decrease it.
Give me an example of one dynasty our estate tax has broken up.
I can give several examples of formerly massively wealthy capitalist families that suddenly decided to get into politics once the enactment of it was thus. I can also give several examples of families that's fortunes have been amassed almost completely based around political service The estate tax increases the level of inequality and agency the wealthiest have over power and capital, not decrease it.
No.
We will not give an example, because the lack of examples is evidence that the law needs reform.
Further, your last sentence does not follow from the rest of the paragraph.
That politics benefits the rich does not imply an estate tax benefits the rich.
Give me an example of one dynasty our estate tax has broken up.
I can give several examples of formerly massively wealthy capitalist families that suddenly decided to get into politics once the enactment of it was thus. I can also give several examples of families that's fortunes have been amassed almost completely based around political service The estate tax increases the level of inequality and agency the wealthiest have over power and capital, not decrease it.
Your conclusion is still completely unsupported and absurd.
I will not engage in citation wars for you to nitpick specifics in a theoretical discussion. Beyond that, my point is and has been that the estate tax needs to be stronger and cannot be the only way to mitigate dynastic wealth. You are asking for citations for a point I am not making. If there was an example of the estate tax cleanly ending a dynasty, I would not be arguing it should be stronger (and that would be absurd).
Price theory is a microcnomnic concept, not a macroeconomic concept. There are some macro people who claim to be working under a "price theory" but its not at all what you're claiming and frankly probably should not be dignified with an academic response*.
*Not because its useless but because its formulation as something new and important is dumb and wrong. Simple models to deal with complex systems are the norm, and a "backed out" approach is motherfucking Keynesian. And while it certainly have value post-lucas it is not some magical breakthrough.
edit: And i am pretty sure that the new "price theorists" consider themselves microeconomists.
There is very much price theory with regards to international capital.
There are also plenty of other ways to tax wealth once it's been gained as income. Sales tax, luxury and sin tax, inflation.
You are proposing regressive consumption taxation to tax the wealthy. That is not a good idea.
I did no such thing. Please quit putting words in my mouth or I'm going to quit responding. I gave examples of hypothetical ways you can tax wealth. They are all not innately regressive.
There are also plenty of other ways to tax wealth once it's been gained as income. Sales tax, luxury and sin tax, inflation.
You are proposing regressive consumption taxation to tax the wealthy. That is not a good idea.
I did no such thing. Please quit putting words in my mouth or I'm going to quit responding. I gave examples of hypothetical ways you can tax wealth. They are all not innately regressive.
Consumption taxes are innately regressive, yes. They cannot be progressive in your formulation where the estate tax is regressive due to hitting the 0.0001% less hard than the 0.1%
There is a "progressive" consumption tax but it's generallya libertarian fantasy that assumes an end-year rebate on a high consumption tax does not impact the poor.
If you are going to suggest things like "higher income tax and no estate tax", then you cannot continue to argue changes to the estate tax will not happen under this legislature or do not fit into the executive's priorities. Because that suggestion does not align with their priorities either; your own backup argument defeats you.
And again it doesn't. I'm just not for being needlessly obstructionist and I am convinced by the international economics of the viability of the plan. I am also convinced that if it is bad, remedying it would be relatively easy once a more progressive administration is in place. The only people that'd be harmed by the estate tax being repealed now are the Republicans, and the wealthy elderly that'll be subjected to some perverted calculus once a superior estate tax is enacted.
Price theory is a microcnomnic concept, not a macroeconomic concept. There are some macro people who claim to be working under a "price theory" but its not at all what you're claiming and frankly probably should not be dignified with an academic response*.
*Not because its useless but because its formulation as something new and important is dumb and wrong. Simple models to deal with complex systems are the norm, and a "backed out" approach is motherfucking Keynesian. And while it certainly have value post-lucas it is not some magical breakthrough.
edit: And i am pretty sure that the new "price theorists" consider themselves microeconomists.
There is very much price theory with regards to international capital.
What the goose does that even mean? Sure there is a theory of price for capital given international constraints. But that does not mean that this is a macroeconomic concept. Nor does it mean that it is specifically "price theory" nor does that mean that "price theory" is a macroeconomic construct which has anything to do with anything you're claiming.
If you are going to suggest things like "higher income tax and no estate tax", then you cannot continue to argue changes to the estate tax will not happen under this legislature or do not fit into the executive's priorities. Because that suggestion does not align with their priorities either; your own backup argument defeats you.
And again it doesn't. I'm just not for being needlessly obstructionist and I am convinced by the international economics of the viability of the plan. I am also convinced that if it is bad, remedying it would be relatively easy once a more progressive administration is in place. The only people that'd be harmed by the estate tax being repealed now are the Republicans, and the wealthy elderly that'll be subjected to some perverted calculus once a superior estate tax is enacted.
Give me an example of one dynasty our estate tax has broken up.
I can give several examples of formerly massively wealthy capitalist families that suddenly decided to get into politics once the enactment of it was thus. I can also give several examples of families that's fortunes have been amassed almost completely based around political service The estate tax increases the level of inequality and agency the wealthiest have over power and capital, not decrease it.
No.
We will not give an example, because the lack of examples is evidence that the law needs reform.
Further, your last sentence does not follow from the rest of the paragraph.
That politics benefits the rich does not imply an estate tax benefits the rich.
There are other ways to be rich than having high amounts of priceable liquid assets.
There are also plenty of other ways to tax wealth once it's been gained as income. Sales tax, luxury and sin tax, inflation.
None of those taxes tax wealth.
They tax expenditure.
Or in the case of inflation, they tax dollars, not assets and therefore wealth.
You can structure the policy for all of those taxes as to not target the middle classes with a strong social safety net.
A tax policy needs be holistic if it is to be effective. I am not advocating for any one of those in isolation, and the combination of luxury tax (ie capital gains, yacht and other asset classes only the insanely wealthy qualify), inflation and property tax in conjunction target all forms of disposable capital and excess wealth you would care to target. All more effectively and with more innate link to the social goods desired.
0
Options
AstaerethIn the belly of the beastRegistered Userregular
As we've learned from the last 7 years of Republicans in Congress, "repeal and replace" plans are bullshit--heavy on the repeal and half-assed on the replace. Give us 90% top bracket income taxes and UBI and then we can look at repealing the estate tax. Tax cuts are always going to have more political viabilty than tax increases or even spending increases, so you have to eat your vegetables first.
As we've learned from the last 7 years of Republicans in Congress, "repeal and replace" plans are bullshit--heavy on the repeal and half-assed on the replace. Give us 90% top bracket income taxes and UBI and then we can look at repealing the estate tax. Tax cuts are always going to have more political viabilty than tax increases or even spending increases, so you have to eat your vegetables first.
The estate tax as enacted in the federal government is unfair and regressive on those that have to pay it. The money that is generated from the estate tax doesn't innately do any social good, and depleting rich families of liquid capital on its face does nothing for the poverty level. For all the protections it has under law, the money can go to Trump re-sodding Mar-a-lago every day of his administration.
I also do not agree that it is innately a social good, even if we removed all the exemptions. Think of the incentives and head in a fuckin' fishbowl that induces for the elderly wealthy. Being in favor of it, without it having enumerated links to social safety nets or an isolationist economy, is just bad policy for the federal government.
One of the main justifications for Thaler's and Sunstein's endorsement of libertarian paternalism in Nudge draws on facts of human nature and psychology. The book is critical of the homo economicus view of human beings "that each of us thinks and chooses unfailingly well, and thus fits within the textbook picture of human beings offered by economists."[7]
They cite many examples of research which raise "serious questions about the rationality of many judgments and decisions that people make".[8] They state that, unlike members of homo economicus, members of the species homo sapiens make predictable mistakes because of their use of heuristics, fallacies, and because of the way they are influenced by their social interactions.
When you die, your family gets to keep 5 million dollars in assets and there are exceptions for all sorts of things like real estate and art collections.
Obviously, very wealthy families pay the very best accountants and lawyers to make sure as little of this stuff is taxed as possible, where simply "slightly wealthy" families end out paying more taxes than some believe is fair. People with lower total wealth aren't impacted at all.
I feel like some people are arguing this in terms of twisted version of the argument against the war on drugs. It doesn't work, enforcement is impossibly expensive and wasteful and it hurts millions. I can actually understand the sentiment, but it requires that you ignore things like the IRS is one of the most cost effective agencies in the government and has an incredible return for each dollar invested in enforcement. The estate tax also doesn't hurt anyone, it simply doesn't catch some people that it should.
Were you to invest the entirety of the estate tax revenue back into the IRS for further enforcement, I would be willing to bet you'd come up with all sorts of money after 2-3 tax cycles. You can't spend decades gutting agencies you don't like because they work so that you can claim they're a waste of time, insolvent and dysfunctional. The Postal Service, IRS, FDA, EPA etc all have tremendous flaws, mostly due to budgeting and lawmakers eroding their authority by playing politik with them.
The estate tax is a fine tax. I'd also be fine with the maximum amount of wealth transfer between generations being 5 million dollars in assets and a family home with a 90% tax on everything above that.
The people who pay it should in theory be the most able to pay. That it only mostly works this way doesn't make it regressive, it makes it poorly enforced.
Edit: I get that the entire thing feels wrong. As though some sort of punishment to people of wealth for having it but I think that has more to do with cultural framing of wealth as a virtue over the last 45 years or so.
Edit2: This entire thing has been remarkably civil, too. I don't know much about taxes except the instinctive wince when hearing the word tax. D&D has been super classy lately.
Oh and another example I can give a government-business and fiscal dynasty (in fact the richest man in the world at one point and current largest philanthropist) Warren Buffet's father was a Senator, and a large portion of his wealth originates from his acquisition of a formerly government owned insurance company you might've heard of; GEICO.
As we've learned from the last 7 years of Republicans in Congress, "repeal and replace" plans are bullshit--heavy on the repeal and half-assed on the replace. Give us 90% top bracket income taxes and UBI and then we can look at repealing the estate tax. Tax cuts are always going to have more political viabilty than tax increases or even spending increases, so you have to eat your vegetables first.
The estate tax as enacted in the federal government is unfair and regressive on those that have to pay it. The money that is generated from the estate tax doesn't innately do any social good, and depleting rich families of liquid capital on its face does nothing for the poverty level. For all the protections it has under law, the money can go to Trump re-sodding Mar-a-lago every day of his administration.
I also do not agree that it is innately a social good, even if we removed all the exemptions. Think of the incentives and head in a fuckin' fishbowl that induces for the elderly wealthy. Being in favor of it, without it having enumerated links to social safety nets or an isolationist economy, is just bad policy for the federal government.
The estate tax as enacted in the federal government is fair and progressive on those that have to pay it. The money that is generated from the estate tax does social good in the same proportion that any revenue does social good and the value that we place on the tax is therefore dependent solely on the value as incidence or value as behavioral modification.
Depleting rich families of liquid capital does as much for the poverty level as the difference between the progressive taxation of the estate tax and the regressive taxation of sales or consumption taxes. The incentives and "head in a fuckin' fishbowl" that this induces for the elderly wealthy are not particularly concerning. Arguments that it is unfair to people who do not plan are dumb(as people who do not plan are therefore not responding to any incentives or heads in fuckin' fishbowls). Arguments to behavior modification are similarly dumb (we want people to break up their estates, and while paying accountants to avoid the tax is not ideal, its still better than nothing)
Being in favor of it, without any links to social safety nets or an isolationist economy makes no goddamn difference because money is fungible. And the second part makes literally, literally zero sense. It also does not matter if the money would go to trump resurfacing mar-a-lago because the protection against Trump embezzling is to prevent trump embezzling. It is not to remove specific revenue sources which have no relation to whether or not Trump embezzles.
So long as there is an incentive to remove generational wealth or to produce a more progressive tax code there is a reason to support the policy. And the reasons for this are many; labor inducement, power diffusion, smaller incidence of the tax code on GDP...
And yes its not perfect, but maybe we should make it more perfect instead of making it worse then?
Oh and another example I can give a government-business and fiscal dynasty (in fact the richest man in the world at one point and current largest philanthropist) Warren Buffet's father was a Senator, and a large portion of his wealth originates from his acquisition of a formerly government owned insurance company you might've heard of; GEICO.
Yes, and clearly the only thing that made him what he was to day was the fact that when his father died a good portion of that estate was taxed and Warren was unable to mobilize the extra capital into outsized investment returns. If Warren Buffet had only more money when he started, surely he would have less money now.
Goumindong on
+6
Options
AstaerethIn the belly of the beastRegistered Userregular
As we've learned from the last 7 years of Republicans in Congress, "repeal and replace" plans are bullshit--heavy on the repeal and half-assed on the replace. Give us 90% top bracket income taxes and UBI and then we can look at repealing the estate tax. Tax cuts are always going to have more political viabilty than tax increases or even spending increases, so you have to eat your vegetables first.
The estate tax as enacted in the federal government is unfair and regressive on those that have to pay it.
So what? Lots of things aren't fair. Millionaires can deal. You haven't convinced me why I should care.
The money that is generated from the estate tax doesn't innately do any social good,
No taxation innately does anything, but in order for the government to spend money on anything, including good things, it has to take in revenue.
and depleting rich families of liquid capital on its face does nothing for the poverty level.
Nobody said it does.
For all the protections it has under law, the money can go to Trump re-sodding Mar-a-lago every day of his administration.
Taxes in this country are almost never linked directly to expenditures. Trump can use income tax revenue to re-sod Mar-a-lago too, if he wants.
I also do not agree that it is innately a social good, even if we removed all the exemptions. Think of the incentives and head in a fuckin' fishbowl that induces for the elderly wealthy.
Millionaires can deal. If evading the tax is too stressful for them they can always fucking pay it.
Being in favor of it, without it having enumerated links to social safety nets or an isolationist economy, is just bad policy for the federal government.
Taxes are almost never linked directly to expenditures. Nor should they be.
As we've learned from the last 7 years of Republicans in Congress, "repeal and replace" plans are bullshit--heavy on the repeal and half-assed on the replace. Give us 90% top bracket income taxes and UBI and then we can look at repealing the estate tax. Tax cuts are always going to have more political viabilty than tax increases or even spending increases, so you have to eat your vegetables first.
The estate tax as enacted in the federal government is unfair and regressive on those that have to pay it. The money that is generated from the estate tax doesn't innately do any social good, and depleting rich families of liquid capital on its face does nothing for the poverty level. For all the protections it has under law, the money can go to Trump re-sodding Mar-a-lago every day of his administration.
I also do not agree that it is innately a social good, even if we removed all the exemptions. Think of the incentives and head in a fuckin' fishbowl that induces for the elderly wealthy. Being in favor of it, without it having enumerated links to social safety nets or an isolationist economy, is just bad policy for the federal government.
The estate tax as enacted in the federal government is fair and progressive on those that have to pay it. The money that is generated from the estate tax does social good in the same proportion that any revenue does social good and the value that we place on the tax is therefore dependent solely on the value as incidence or value as behavioral modification.
Depleting rich families of liquid capital does as much for the poverty level as the difference between the progressive taxation of the estate tax and the regressive taxation of sales or consumption taxes. The incentives and "head in a fuckin' fishbowl" that this induces for the elderly wealthy are not particularly concerning. Arguments that it is unfair to people who do not plan are dumb(as people who do not plan are therefore not responding to any incentives or heads in fuckin' fishbowls). Arguments to behavior modification are similarly dumb (we want people to break up their estates, and while paying accountants to avoid the tax is not ideal, its still better than nothing)
Being in favor of it, without any links to social safety nets or an isolationist economy makes no goddamn difference because money is fungible. And the second part makes literally, literally zero sense. It also does not matter if the money would go to trump resurfacing mar-a-lago because the protection against Trump embezzling is to prevent trump embezzling. It is not to remove specific revenue sources which have no relation to whether or not Trump embezzles.
So long as there is an incentive to remove generational wealth or to produce a more progressive tax code there is a reason to support the policy. And the reasons for this are many; labor inducement, power diffusion, smaller incidence of the tax code on GDP...
And yes its not perfect, but maybe we should make it more perfect instead of making it worse then?
Oh and another example I can give a government-business and fiscal dynasty (in fact the richest man in the world at one point and current largest philanthropist) Warren Buffet's father was a Senator, and a large portion of his wealth originates from his acquisition of a formerly government owned insurance company you might've heard of; GEICO.
Yes, and clearly the only thing that made him what he was to day was the fact that when his father died a good portion of that estate was taxed and Warren was unable to mobilize the extra capital into outsized investment returns. If Warren Buffet had only more money when he started, surely he would have less money now.
The bold is incorrect. Many bills of revenue are explicitly linked to certain sources of expenditure. Your social security, and employment tax supposed to pay for social security, Medicare and unemployment and specifically enumerating in the laws enacted the tax. While it is true that the federal government can borrow this money against these social safety nets and operate at a deficit, that requires further legislative action. As the estate tax currently functions within the federal government, it was first and foremost a source of military investment and secondly a slush fund for various executive decrees.
One of the main justifications for Thaler's and Sunstein's endorsement of libertarian paternalism in Nudge draws on facts of human nature and psychology. The book is critical of the homo economicus view of human beings "that each of us thinks and chooses unfailingly well, and thus fits within the textbook picture of human beings offered by economists."[7]
They cite many examples of research which raise "serious questions about the rationality of many judgments and decisions that people make".[8] They state that, unlike members of homo economicus, members of the species homo sapiens make predictable mistakes because of their use of heuristics, fallacies, and because of the way they are influenced by their social interactions.
And what exactly do you think "nudging" accomplishes?
Further, dampening the power of families is pretty much the opposite of patriarchal, as it reduces their ability to pass power on.
Much like the term "regressive", words have a meaning, not just a feeling attached to them.
And wait. Why do we want people to break up their estates? I know with the threshold of the current estate tax it's not really a concern, but doesn't this just innately make our citizens further reliant on our government and hence our most elite? Again, this seems to bolster class inequality, not promote it.
And wait. Why do we want people to break up their estates? I know with the threshold of the current estate tax it's not really a concern, but doesn't this just innately make our citizens further reliant on our government and hence our most elite? Again, this seems to bolster class inequality, not promote it.
"Be like water" is solid advice for martial arts, but not for argument. You've both argued that the ultra-rich are "aristocrats" and are now arguing that it's actually the government that is the most elite. Your position on who is in power and who is further entrenched by the estate tax shifts with every post.
E: But no, the people arguing for higher government revenues are not going to accept the tired "reliance" argument and suddenly realize, wait, we don't actually want higher government revenues.
And wait. Why do we want people to break up their estates? I know with the threshold of the current estate tax it's not really a concern, but doesn't this just innately make our citizens further reliant on our government and hence our most elite? Again, this seems to bolster class inequality, not promote it.
Breaking up estates is key to decelerating the growth of wealth inequality. A major driver of wealth inequality is its ability to accumulate over very long spans of time due to inheritance. If large estates were forcibly liquidated upon the holder's death, the money gets spread around, and government programs are the most efficient tool of wealth redistribution we have (the second tool being philanthropy, and philanthropy to a 501c3, to a non-political organization, meeting a certain expense ratio would be another acceptable way to liquidate large estates).
The goal is to take the wealth generated by the assets of the richest, and give it to somebody else. Estates that fall under the threshold would be more likely to survive, so that middle-class wealth better endures while upper-class wealth is broken down every generation (although short of an 80% tax would allow the gap to continue to widen).
I am trying to make it more perfect as well. We just fundamentally disagree on the role of the government in general, as well as on the existence of types of capital outside of taxable assets that generate inequality. We also disagree on the impact the estate tax has on foreign investment, and capital flight; that taxes on estates incentivize bi-national extended family units to park wealth outside of the scope of the US tax code, while doing nothing to prevent them living an obscenely lavish and unrelatable existence compared to the majority of Americans.
Why exactly do you feel an estate tax imposed by the federal government encourages any investment in social welfare programs with our current administration? Why exactly do you think it's impossible to reenact it; as I noted up thread, the estate tax was 0% for 2010.
Posts
This is a false dichotomy, but:
You're right it might be his book I was thinking of that went into a bit more detail, or one of the other pieces I've read or linked. I'll try to find better academic lit on the macro if you want when I get a chance, but the basis of the international issues is in price theory.
The most relevant bit from that article:
Please give me some examples of these eternal dynasties and citations for that last bit.
"Barring negligence" was the key point there. Dynasties are not eternal, but if there is no way to tax them once they have generated their wealth, then they can only lose their money by their own hand. That ties into having broad sources of revenue generation. You switched from asking a theoretical question to requesting specific practical examples.
And the more important point is still that this is a false dichotomy; there is no need to have a higher income tax or a more effective estate tax; you can have both!
If you are going to suggest things like "higher income tax and no estate tax", then you cannot continue to argue changes to the estate tax will not happen under this legislature or do not fit into the executive's priorities. Because that suggestion does not align with their priorities either; your own backup argument defeats you.
So you're defense is based around the fear of something without an example in all of history to prevent something that's completely hypothetical. We have antitrust laws for a reason, and running afoul of those is not just because of negligence.
*Not because its useless but because its formulation as something new and important is dumb and wrong. Simple models to deal with complex systems are the norm, and a "backed out" approach is motherfucking Keynesian. And while it certainly have value post-lucas it is not some magical breakthrough.
edit: And i am pretty sure that the new "price theorists" consider themselves microeconomists.
I would say that the power of dynastic wealth is trivially obvious to see, and far more of a concern than that people with 8 digit wealth are taxed unfairly relative to people with 11 digit wealth.
I can give several examples of formerly massively wealthy capitalist families that suddenly decided to get into politics once the enactment of it was thus. I can also give several examples of families that's fortunes have been amassed almost completely based around political service The estate tax increases the level of inequality and agency the wealthiest have over power and capital, not decrease it.
No.
We will not give an example, because the lack of examples is evidence that the law needs reform.
Further, your last sentence does not follow from the rest of the paragraph.
That politics benefits the rich does not imply an estate tax benefits the rich.
Your conclusion is still completely unsupported and absurd.
I will not engage in citation wars for you to nitpick specifics in a theoretical discussion. Beyond that, my point is and has been that the estate tax needs to be stronger and cannot be the only way to mitigate dynastic wealth. You are asking for citations for a point I am not making. If there was an example of the estate tax cleanly ending a dynasty, I would not be arguing it should be stronger (and that would be absurd).
You are proposing regressive consumption taxation to tax the wealthy. That is not a good idea.
There is very much price theory with regards to international capital.
None of those taxes tax wealth.
They tax expenditure.
Or in the case of inflation, they tax dollars, not assets and therefore wealth.
I did no such thing. Please quit putting words in my mouth or I'm going to quit responding. I gave examples of hypothetical ways you can tax wealth. They are all not innately regressive.
Consumption taxes are innately regressive, yes. They cannot be progressive in your formulation where the estate tax is regressive due to hitting the 0.0001% less hard than the 0.1%
There is a "progressive" consumption tax but it's generallya libertarian fantasy that assumes an end-year rebate on a high consumption tax does not impact the poor.
And again it doesn't. I'm just not for being needlessly obstructionist and I am convinced by the international economics of the viability of the plan. I am also convinced that if it is bad, remedying it would be relatively easy once a more progressive administration is in place. The only people that'd be harmed by the estate tax being repealed now are the Republicans, and the wealthy elderly that'll be subjected to some perverted calculus once a superior estate tax is enacted.
Also none of those are wealth taxes. They're consumption taxes and liquidity taxes. Guess which class can afford to be the least liquid?
What the goose does that even mean? Sure there is a theory of price for capital given international constraints. But that does not mean that this is a macroeconomic concept. Nor does it mean that it is specifically "price theory" nor does that mean that "price theory" is a macroeconomic construct which has anything to do with anything you're claiming.
The bolded is bonkers.
There are other ways to be rich than having high amounts of priceable liquid assets.
Sales tax on cigarettes and yachts is the same for the poor and wealthy alike.
You can structure the policy for all of those taxes as to not target the middle classes with a strong social safety net.
A tax policy needs be holistic if it is to be effective. I am not advocating for any one of those in isolation, and the combination of luxury tax (ie capital gains, yacht and other asset classes only the insanely wealthy qualify), inflation and property tax in conjunction target all forms of disposable capital and excess wealth you would care to target. All more effectively and with more innate link to the social goods desired.
The estate tax as enacted in the federal government is unfair and regressive on those that have to pay it. The money that is generated from the estate tax doesn't innately do any social good, and depleting rich families of liquid capital on its face does nothing for the poverty level. For all the protections it has under law, the money can go to Trump re-sodding Mar-a-lago every day of his administration.
I also do not agree that it is innately a social good, even if we removed all the exemptions. Think of the incentives and head in a fuckin' fishbowl that induces for the elderly wealthy. Being in favor of it, without it having enumerated links to social safety nets or an isolationist economy, is just bad policy for the federal government.
Yes, but those taxes also incentivize or decentivize certain behaviors. I'm big on the government being less patriarchal and more of a "nudge"er.
https://en.m.wikipedia.org/wiki/Nudge_(book)
Obviously, very wealthy families pay the very best accountants and lawyers to make sure as little of this stuff is taxed as possible, where simply "slightly wealthy" families end out paying more taxes than some believe is fair. People with lower total wealth aren't impacted at all.
I feel like some people are arguing this in terms of twisted version of the argument against the war on drugs. It doesn't work, enforcement is impossibly expensive and wasteful and it hurts millions. I can actually understand the sentiment, but it requires that you ignore things like the IRS is one of the most cost effective agencies in the government and has an incredible return for each dollar invested in enforcement. The estate tax also doesn't hurt anyone, it simply doesn't catch some people that it should.
Were you to invest the entirety of the estate tax revenue back into the IRS for further enforcement, I would be willing to bet you'd come up with all sorts of money after 2-3 tax cycles. You can't spend decades gutting agencies you don't like because they work so that you can claim they're a waste of time, insolvent and dysfunctional. The Postal Service, IRS, FDA, EPA etc all have tremendous flaws, mostly due to budgeting and lawmakers eroding their authority by playing politik with them.
The estate tax is a fine tax. I'd also be fine with the maximum amount of wealth transfer between generations being 5 million dollars in assets and a family home with a 90% tax on everything above that.
The people who pay it should in theory be the most able to pay. That it only mostly works this way doesn't make it regressive, it makes it poorly enforced.
Edit: I get that the entire thing feels wrong. As though some sort of punishment to people of wealth for having it but I think that has more to do with cultural framing of wealth as a virtue over the last 45 years or so.
Edit2: This entire thing has been remarkably civil, too. I don't know much about taxes except the instinctive wince when hearing the word tax. D&D has been super classy lately.
The estate tax as enacted in the federal government is fair and progressive on those that have to pay it. The money that is generated from the estate tax does social good in the same proportion that any revenue does social good and the value that we place on the tax is therefore dependent solely on the value as incidence or value as behavioral modification.
Depleting rich families of liquid capital does as much for the poverty level as the difference between the progressive taxation of the estate tax and the regressive taxation of sales or consumption taxes. The incentives and "head in a fuckin' fishbowl" that this induces for the elderly wealthy are not particularly concerning. Arguments that it is unfair to people who do not plan are dumb(as people who do not plan are therefore not responding to any incentives or heads in fuckin' fishbowls). Arguments to behavior modification are similarly dumb (we want people to break up their estates, and while paying accountants to avoid the tax is not ideal, its still better than nothing)
Being in favor of it, without any links to social safety nets or an isolationist economy makes no goddamn difference because money is fungible. And the second part makes literally, literally zero sense. It also does not matter if the money would go to trump resurfacing mar-a-lago because the protection against Trump embezzling is to prevent trump embezzling. It is not to remove specific revenue sources which have no relation to whether or not Trump embezzles.
So long as there is an incentive to remove generational wealth or to produce a more progressive tax code there is a reason to support the policy. And the reasons for this are many; labor inducement, power diffusion, smaller incidence of the tax code on GDP...
And yes its not perfect, but maybe we should make it more perfect instead of making it worse then?
Yes, and clearly the only thing that made him what he was to day was the fact that when his father died a good portion of that estate was taxed and Warren was unable to mobilize the extra capital into outsized investment returns. If Warren Buffet had only more money when he started, surely he would have less money now.
So what? Lots of things aren't fair. Millionaires can deal. You haven't convinced me why I should care.
No taxation innately does anything, but in order for the government to spend money on anything, including good things, it has to take in revenue.
Nobody said it does.
Taxes in this country are almost never linked directly to expenditures. Trump can use income tax revenue to re-sod Mar-a-lago too, if he wants.
Millionaires can deal. If evading the tax is too stressful for them they can always fucking pay it.
Taxes are almost never linked directly to expenditures. Nor should they be.
The bold is incorrect. Many bills of revenue are explicitly linked to certain sources of expenditure. Your social security, and employment tax supposed to pay for social security, Medicare and unemployment and specifically enumerating in the laws enacted the tax. While it is true that the federal government can borrow this money against these social safety nets and operate at a deficit, that requires further legislative action. As the estate tax currently functions within the federal government, it was first and foremost a source of military investment and secondly a slush fund for various executive decrees.
And what exactly do you think "nudging" accomplishes?
Further, dampening the power of families is pretty much the opposite of patriarchal, as it reduces their ability to pass power on.
Much like the term "regressive", words have a meaning, not just a feeling attached to them.
"Be like water" is solid advice for martial arts, but not for argument. You've both argued that the ultra-rich are "aristocrats" and are now arguing that it's actually the government that is the most elite. Your position on who is in power and who is further entrenched by the estate tax shifts with every post.
E: But no, the people arguing for higher government revenues are not going to accept the tired "reliance" argument and suddenly realize, wait, we don't actually want higher government revenues.
No need to make announcements like this in the thread. And try not to dominate a page with quad posts.
Breaking up estates is key to decelerating the growth of wealth inequality. A major driver of wealth inequality is its ability to accumulate over very long spans of time due to inheritance. If large estates were forcibly liquidated upon the holder's death, the money gets spread around, and government programs are the most efficient tool of wealth redistribution we have (the second tool being philanthropy, and philanthropy to a 501c3, to a non-political organization, meeting a certain expense ratio would be another acceptable way to liquidate large estates).
The goal is to take the wealth generated by the assets of the richest, and give it to somebody else. Estates that fall under the threshold would be more likely to survive, so that middle-class wealth better endures while upper-class wealth is broken down every generation (although short of an 80% tax would allow the gap to continue to widen).
Why exactly do you feel an estate tax imposed by the federal government encourages any investment in social welfare programs with our current administration? Why exactly do you think it's impossible to reenact it; as I noted up thread, the estate tax was 0% for 2010.