Why is it so good?
Why is it necessary?
Full Version: Why is an estate tax(a high one at that) a good idea?
Taking money from the rich is good.
Though I am mostly a democrat, I have mixed feelings about this. The last thing we want after a loved one dies is a tax, but taxes are neccecary things. I'm not familiar with tax law, so some of these things might already be in the law, I'm not sure.
First off, if a goverment worker dies on the job, no estate tax.
Second, estate tax must only effect the VERY wealthy.
First off, if a goverment worker dies on the job, no estate tax.
Second, estate tax must only effect the VERY wealthy.
Because 99% of the wealth is possessed by 1% of the population. Now, you may say "they earned and deserve that wealth." That's debatable, but that's another topic all together.
Assuming it's true, however, say there's a rich man. He started a business when he was young, and through hard work, skill, and, don't kid yourself, probably fucking a lot of people over, he earns a great fortune. When he dies, he gives the money to, we'll say, his first born son. That kid didn't do shit, he just happens to be the rich guy's son. In essence, he got a handout from his rich dad. He didn't earn that money, his dad did. So now there's a kid with a lot of money that he did absolutely nothing to earn. He may continue his father's business, but then again, he also has the power to just retire and live from what he has of his dad's money for the rest of his life, and he'd be able to do it with very much luxury.
Assuming he continues the business, when he dies, he'll pass the money on to his son, too. Assume this chain continues either until the business goes under Once again, this person did nothing to earn it, but now he has a boatload of money. Even if everybody all the way down the line continues the business, they still started with a fortune they did nothing to earn. They didn't "build a business from the bottom up like a good, hard-working American" like so many supporters of capitalist economics are quick to point out as a strength of capitalist economies. He had a very, very large head start.
And estate tax would e a way of saying "that's not fair, but it also wouldn't be fair if we just took everybody's assets, and would likely discourage people from starting businesses because they know it would just die with them. So, what we're going to do instead is take some of that money and put it into funding for the military, social services, education, etc. That way somebody else may learn the skills necessary to build a fortune."
And, not that this is a valid argument at all, but it strikes me as funny that most of the people who oppose estate taxes also oppose welfare, social security, etc. because those programs are "just giving people a handout instead of making them earn their money."
Assuming it's true, however, say there's a rich man. He started a business when he was young, and through hard work, skill, and, don't kid yourself, probably fucking a lot of people over, he earns a great fortune. When he dies, he gives the money to, we'll say, his first born son. That kid didn't do shit, he just happens to be the rich guy's son. In essence, he got a handout from his rich dad. He didn't earn that money, his dad did. So now there's a kid with a lot of money that he did absolutely nothing to earn. He may continue his father's business, but then again, he also has the power to just retire and live from what he has of his dad's money for the rest of his life, and he'd be able to do it with very much luxury.
Assuming he continues the business, when he dies, he'll pass the money on to his son, too. Assume this chain continues either until the business goes under Once again, this person did nothing to earn it, but now he has a boatload of money. Even if everybody all the way down the line continues the business, they still started with a fortune they did nothing to earn. They didn't "build a business from the bottom up like a good, hard-working American" like so many supporters of capitalist economics are quick to point out as a strength of capitalist economies. He had a very, very large head start.
And estate tax would e a way of saying "that's not fair, but it also wouldn't be fair if we just took everybody's assets, and would likely discourage people from starting businesses because they know it would just die with them. So, what we're going to do instead is take some of that money and put it into funding for the military, social services, education, etc. That way somebody else may learn the skills necessary to build a fortune."
And, not that this is a valid argument at all, but it strikes me as funny that most of the people who oppose estate taxes also oppose welfare, social security, etc. because those programs are "just giving people a handout instead of making them earn their money."
^ Well said.
QUOTE(The Clown @ Dec 3 2006, 09:32 PM) 
Because 99% of the wealth is possessed by 1% of the population. Now, you may say "they earned and deserve that wealth." That's debatable, but that's another topic all together.
Assuming it's true, however, say there's a rich man. He started a business when he was young, and through hard work, skill, and, don't kid yourself, probably fucking a lot of people over, he earns a great fortune. When he dies, he gives the money to, we'll say, his first born son. That kid didn't do shit, he just happens to be the rich guy's son. In essence, he got a handout from his rich dad. He didn't earn that money, his dad did. So now there's a kid with a lot of money that he did absolutely nothing to earn. He may continue his father's business, but then again, he also has the power to just retire and live from what he has of his dad's money for the rest of his life, and he'd be able to do it with very much luxury.
Assuming he continues the business, when he dies, he'll pass the money on to his son, too. Assume this chain continues either until the business goes under Once again, this person did nothing to earn it, but now he has a boatload of money. Even if everybody all the way down the line continues the business, they still started with a fortune they did nothing to earn. They didn't "build a business from the bottom up like a good, hard-working American" like so many supporters of capitalist economics are quick to point out as a strength of capitalist economies. He had a very, very large head start.
And estate tax would e a way of saying "that's not fair, but it also wouldn't be fair if we just took everybody's assets, and would likely discourage people from starting businesses because they know it would just die with them. So, what we're going to do instead is take some of that money and put it into funding for the military, social services, education, etc. That way somebody else may learn the skills necessary to build a fortune."
And, not that this is a valid argument at all, but it strikes me as funny that most of the people who oppose estate taxes also oppose welfare, social security, etc. because those programs are "just giving people a handout instead of making them earn their money."
Your point goes to those who will have a "lazy" son. You neglect the fact that they'll probably have very good schooling.
Anyways, If I save up my money to buy a really nice watch, and want to pass it down to my son someday (even though he might hawk it for some coke) I should have that right. Same with the wealth I created. I'm not only working hard for myself, I'm also working hard for my future family and their future. I oppose estate tax. Even if the rich get a free pass (when they die of course), it's their money. I am for welfare (one that is closely monitored) and social security (a reformed one at that). Tax the living according to their income. Yet when they die, don't give them the disrespect of doing it again.
Also, a counter argument from MyHeritage.org
QUOTE
Myth: Death tax repeal only benefits the wealthy
Liberal myth
Death tax repeal will benefit only the very wealthiest Americans.
The facts
Repealing the immoral death tax will benefit all Americans. The death tax:
* Punishes hard work by small business owners and hurts their families
* Affects the millions of Americans who are employed by small businesses
Economically unsound
The death tax is a poor tax policy because it:
* Discourages savings and investment—the tax urges consumption today to avoid taxes later
* Undermines job creation and wage growth—the tax costs between 170,000 and 250,000 potential jobs each year
* Prevents the economy from achieving its full potential—by discouraging investment, prosperity is curtailed
* Contradicts the central promise of American life: wealth creation—Americans cannot pass on their prosperity to others
Punishing Americans
The death tax is immoral because it punishes those people who tax policy is intended to help.
* Women and minority small-business owners—the financial legacy of their hard work, which they hoped to pass on to their children, instead will fall victim to confiscatory taxation and liquidation
* Farmers—family farms are disappearing because the federal government heavily taxes the estates of people who invested most of their earnings back into their farms and had only meager liquid savings
* Workers—ordinary workers can lose their jobs as small and medium-sized businesses are liquidated to pay death taxes
* Low-income people—America’s most vulnerable are hurt not only when they lose jobs but also because the death tax discourages savings and encourages consumption
Regressive taxation
The death tax is in many ways a regressive tax, since the wealthiest Americans can end up paying less.
* Taxpayers who cannot pay tax-planning fees frequently lose more of their estates to death taxes than do wealthier taxpayers
* The use of legal mechanisms to avoid high death tax liabilities is closely related to the amount of fees taxpayers are able to pay for expensive tax-planning advice
No small business or family farm has ever lost their estate to the tax, look it up. It was made for the wealthy.
Death tax seems like such a strange way to put it. We have inheritance tax here and to most minds it is a tax on the wealthy. I don't recall much argument about it. There are some complaints but there are ways of reducing it so most people probably can afford to pay someone to edge round it. Sharing the wealth I suppose.
Redistribution of wealth, ye old democrat credo
Eh. I don't really care either way, but the people that this tax effects get so many tax breaks and incentives from national, state, and local governments as it is.
MyHeritage.org is a bunch of morons. The estate tax only applies if your estate is worth much more than any individually-owned business is worth. NO MIDDLE-CLASS AMERICAN WILL EVER GET FUCKED BY THE ESTATE TAX. EVER.
In fact, taken from THE IRS ITSELF, the Estate Tax affects less than 2% of Americans.
Your estate must be worth a certain amount for it to even apply;
2,000,000$ is a lot of stuff if you consider..
Deductions
1. Marital Deduction: One of the primary deductions for married decedents is the Marital Deduction. All property that is included in the gross estate and passes to the surviving spouse is eligible for the marital deduction. The property must pass "outright." In some cases, certain life estates also qualify for the marital deduction.
2. Charitable Deduction: If the decedent leaves property to a qualifying charity, it is deductible from the gross estate.
3. Mortgages and Debt.
4. Administration expenses of the estate.
5. Losses during estate administration.
Only the obscenely wealthy stand to lose from the Estate Tax. Everyone else is just fooled by people richer than they.
Although, for the record, as a Canadian I disagree with the ESSENCE of the estate tax, as it is a non-taxable transfer between particuliars much like a lottery win. Then again, canadian and american tax laws are quite different
In fact, taken from THE IRS ITSELF, the Estate Tax affects less than 2% of Americans.
Your estate must be worth a certain amount for it to even apply;
QUOTE
For 2006 through 2008, the amount is raised to $2,000,000.
2,000,000$ is a lot of stuff if you consider..
Deductions
QUOTE
1. Marital Deduction: One of the primary deductions for married decedents is the Marital Deduction. All property that is included in the gross estate and passes to the surviving spouse is eligible for the marital deduction. The property must pass "outright." In some cases, certain life estates also qualify for the marital deduction.
2. Charitable Deduction: If the decedent leaves property to a qualifying charity, it is deductible from the gross estate.
3. Mortgages and Debt.
4. Administration expenses of the estate.
5. Losses during estate administration.
Only the obscenely wealthy stand to lose from the Estate Tax. Everyone else is just fooled by people richer than they.
Although, for the record, as a Canadian I disagree with the ESSENCE of the estate tax, as it is a non-taxable transfer between particuliars much like a lottery win. Then again, canadian and american tax laws are quite different
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