A friend who considers himself a "progressive" and lumps both the Democrats and Republicans together under the label of "corporate shills" favors the estate tax because he fears a concentration of power. If those who inherited billions simply bought lots of houses, cars, and boats, he would have little issue. However, he's concerned that democracy requires a more even wealth distribution. I don't necessarily agree, but I thought his point that a concentration of power is what ought to be feared is worth consideration.
A few years ago, my wife and I toured the summer "cottages" of the Vanderbilts and others in Newport, RI. At the turn of the century, they spent millions constructing homes that they planned only to occupy for about three months of the year. Today, Anderson Cooper (son of Gloria Vanderbilt) is probably the richest of the heirs to this fortune -- hardly a great case for the estate tax. In the 70's, there was a Vanderbilt family reunion at Vanderbilt University. Of the 100 or so people who attended, none reported to even to be a millionaire. Perhaps a family tree with many siblings per branch divides wealth faster than it can multiply over time?
Until recently, a Rockefeller was the Governor of WV, but no one seemed to care that he was not a self-made man. Surely the majority of West Virgina residents would have little in common with his ancestry. Can anyone cite any cases of old money abusing power? One could point to the Bush family, but I argue that they aren't especially wealthy by current US standards. Didn't "W" claim only $8M in assets at election time? However, He is a third generation elected official. Perhaps power is more easily inherited than wealth?
If the federal government was truly concerned about a "concentration of power," then why isn't it concerned with itself? It is the most powerful entity on the planet, exercising coercion and destruction on a massive scale. Taxing people's estates at death on money that's already been taxed is preposterous. This is an example of the government using coercion to raise money for itself and nothing more. This is the type power one should be concerned about.
It's really not that strange that inheritance is taxed. People get emotional about it because of death is involved. But in the end it's a matter of money changing hands - even if one of them is cold.
That might be. But that still doesn't change the fact that your children aren't you. If you're hire your son or daughter to work for you then they still have to pay taxes.
I don't like taxes anymore than the next guy. I just don't like the idea that Mr. X should be better of than Mr. Y because Mr. X's grand parents where more successful. You should be able to provide for your children, but it should not excuse them from participating in society themselves.
Mr. X will be better off then Mr. Y because his grand parents were concerned with his education, were able to provide guidance, had influence, were well respected, etc. Why do we allow all other forms of inequality than money?
yes, it should excuse them. if someone wants to bust their ass and make enough money that their children don't have to work hard that is their prerogative, one I would not try to take away from them.
the whole point of productive labor is that it excuses you from certain responsibilities. you choose to work above and beyond subsistence to excuse yourself from future work no? investment is deferred consumption. as PG says, starting a business is like compressing your whole working life into a few years. what is this if not excusing yourself from future responsibilities?
I find the whole notion of social contract theory to be deeply flawed, but that is a very long conversation.
As far as I understand it, the estate tax is meant as a counter to the idle rich. It's also only applied to very large amounts of money and, perhaps more relevantly, to the transfer of that wealth.
I remember reading an article on the Economist a while ago about this issue and they noted that people who inherited large amounts of money entered the labor market less often.
> As far as I understand it, the estate tax is meant as a counter to the idle rich. It's also only applied to very large amounts of money and, perhaps more relevantly, to the transfer of that wealth.
Since it doesn't do that, why would you think that it is intended to do so?
Yes, I know how it's promoted, but look at the reality. The truely big estates aren't subject to estate tax and never will be.
As a general rule, when someone says "this will affect the wealthy in a bad way", they're either lying to you or completely clueless.
> I'm confused to your point, besides a general helplessness.
It's not helplessness. It's an awareness of how the world works. (Related example, regulatory capture is as solid a law as gravity. It is foolish to act as if it doesn't exist, even if your scheme won't do what you want if it does.)
There aren't that many "really rich" people, but they can apply tremendous pressure, have a lot of resources, and are highly motivated.
The folks down a rung or two don't have those advantages. As a result, they're the ones who get hit, mostly because they're hittable but also because their collective wealth is much larger than that of the "really big money" folks.
>The truely big estates aren't subject to estate tax and never will be.
Huh? Do you mean that very wealthy people are able to pay for tax shelter strategies but those with, say, only a few million will end up getting taxed?
> Do you mean that very wealthy people are able to pay for tax shelter strategies but those with, say, only a few million will end up getting taxed?
That's one way. Another way is that such estates can be structured so they aren't owned by someone who dies. Or, they're owned in a friendly jurisdiction. And so on.
I would be supremely interested to see a Nate Silver style analysis of deaths of wealthy persons during 2010, to see if there is a statistically significant jump.
Personally speaking, I'm split on my opinion of the estate tax. On one hand, it helps fulfill the mostly empty promise of a true meritocracy. But considering the various horrors associated with the spending of taxpayer money, I'm fully sympathetic with those who are opposed to the tax.
The estate tax would likely be more acceptable if the deceased were able to provide some amount of direction in their wills about the use of the collected tax revenue, but I suppose that would open up a whole can of worms.
The estate tax would likely be more acceptable if the deceased were able to provide some amount of direction in their wills about the use of the collected tax revenue, but I suppose that would open up a whole can of worms.
Actually, they can do exactly that by donating their estate to charity instead of bequeathing it to their heirs.
A few years ago, my wife and I toured the summer "cottages" of the Vanderbilts and others in Newport, RI. At the turn of the century, they spent millions constructing homes that they planned only to occupy for about three months of the year. Today, Anderson Cooper (son of Gloria Vanderbilt) is probably the richest of the heirs to this fortune -- hardly a great case for the estate tax. In the 70's, there was a Vanderbilt family reunion at Vanderbilt University. Of the 100 or so people who attended, none reported to even to be a millionaire. Perhaps a family tree with many siblings per branch divides wealth faster than it can multiply over time?
Until recently, a Rockefeller was the Governor of WV, but no one seemed to care that he was not a self-made man. Surely the majority of West Virgina residents would have little in common with his ancestry. Can anyone cite any cases of old money abusing power? One could point to the Bush family, but I argue that they aren't especially wealthy by current US standards. Didn't "W" claim only $8M in assets at election time? However, He is a third generation elected official. Perhaps power is more easily inherited than wealth?