• This is a political forum that is non-biased/non-partisan and treats every persons position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!
  • Welcome to our archives. No new posts are allowed here.

Should there be an inheritance tax?

Iriemon

DP Veteran
Joined
Aug 10, 2005
Messages
19,405
Reaction score
2,187
Location
Miami
Gender
Undisclosed
Political Leaning
Undisclosed
The estate tax, or the "death tax" as President Bush like to call it, is a tax on the estate of a deceased. Under the tax reforms passed by the Republicans in Bush's first term the estate tax is slowly being eliminated (by increasing the exemption level, now at $1.5 million per parent, I believe) until the end of the decade when the tax will disappear. This elimination, however, has a sunset clause and the tax will come back into existance unless the repeal is made permanent.

This topic was discussed somewhat in the "flat tax" thread, but I think deserves a thread of its own. I didn't see a thread on this previously, so started this new one.

Should estates be taxed? Or to put it another way, should people inherit assets tax free?
 

Iriemon

DP Veteran
Joined
Aug 10, 2005
Messages
19,405
Reaction score
2,187
Location
Miami
Gender
Undisclosed
Political Leaning
Undisclosed
Originally Posted by Iriemon
Why is it a horrendous practice for Paris Hilton to inherit $28 million income and not pay a dime of tax, so that someone who works for and earns their income pays MORE tax?
edb19 said:
Look - I criticize the media more than anyone I know for the attention Paris Hilton receives. Without question, she's a bimbo and an embarassment to hard working women who manage both a home and a job. However, her grandfather worked hard, made good investments and left his family an incredible trust fund.

The practice of inheritance tax is bad because it punished him (Conrad Hilton) for all his hard work. Here in Toledo there was a locally owned grocery chain (founded in the 20's I believe) - 4 stores. They offered outstanding customer service and great products - including things the national chains didn't. The founder/owner died about 6 years ago. His heirs had to sell the stores because of inheritance taxes. That's a loss to the community. As an aside - the national chain they sold to just closed all their Toledo area stores. I grew up in a farming family. Many family farms are sold to pay inheritance taxes. I know of several small family business owners that worry about what will happen to their business when they pass away.

Seems to me that the Paris Hilton's are the exception and the small business owners are the rule.

Personally, I don't agree with income tax either. The founding fathers never intended an income tax - heck, the constitution needed to be amended to allow for it. I work extremely hard - generally 45-50 hours at the office plus I bring work home. The government doesn't deserve one red cent of what I've earned.

I'd like to see us go back to the days when serving in Congress was a part time job, when representatives and senators had real jobs that occupied their lives for 9-10 months of the year, when they didn't have expense accounts and staffs larger than the one at my office. We live in a free market society and personally I think the private sector can do a better job of managing the country, providing education, building roads and bridges, taking care of the national parks and such than the government does. The government's role in our lives should be extremely limited.
Let me address your points in somewhat reverse order.

Your last two paragraphs attacked the issue of whether there should be any tax. That is a different (and somewhat hypothetical subject). The fact is we have a Govt that likes to spend money, primarily on social welfare, military and wars, and interest on the debt it has accumulated. The question is, given that, there must be some form of tax. Given that -- does it make sense that people who inherit money pay NO tax (as the Republicans propose), such that people who work must pay a HIGHER tax. That is the issue.

You argue that "Paris Hiltons" are the exception, and that the tax really hurts small businesses.

Let me address the Paris Hiltons first. It is true I used Paris Hilton (who probably actually had some tax taken out of what she inherited, because the tax is not fully repealed, yet) because she is the perfect symbol of why I think an inheritance tax is fair. My point is pretty basic. I bust my ass to earn my salary. It pisses me off to think I have to pay taxes, and the Parises can inherit money tax free for the hard work and talent of picking the right womb to be born. Why do I have to pay MORE tax so Paris pays NO tax?

There are many scores of thousands of Parises out their, trust fund babies who inherit or stand to inherit huge sums of money. Should people who work pay MORE tax so those folks pay NO tax?

You argue that an inheritance tax is unfair to Paris' dad. I don't see the point. He's dead. He's not keeping anything. If what you are saying is that since he paid a tax on what he earned, Paris should not, I don't see the logic in that either. Using that same theory, the person who pays me for my services paid a tax on their money, so why should I have to pay a tax on it?

Finally, you argument that an inheritance tax hurts small businesses doesn't fly either. The businesses aren't taxed, the persons inheriting the shares are. Before the repeal, the exemption was $600k per parent, so that was $1.2 million, and then the taxes didn't really kick in for another couple million or so, so heirs inheriting businesses worth less than several million dollars weren't taxed -- most of your "small businesses" were not affected.

You gave an example of a retail business. If an heir wanted to keep a business, most times they could borrow the money to pay the tax and keep the business. My guess is what happens in most cases is that multiple kids receive the stock, cannot agree on how to run the business, or do not want to and just want the $$$, and that is why they sell.

Down here in Miami, we did have a business that was sold to pay the estate tax (they said), the Miami dolphins. Joe Robbie's heirs had to sell the team to pay the tax. But somehow, I don't shed too many tears for them, they still inherited multi-millions each, and I am not willing to pay MORE tax so they can inherit multi-millions tax FREE. Nor do I think that is fair.

As for that farms, we heard Bush and the Republicans trumpet the theme of family farms being lost. I've done research and have not found one case where this actually happened. Family fams are being lost, but because of the Govt subsidized big farm businesses in bed with the red state Republicans. Not because of the estate tax.
 
Last edited:

128shot

DP Veteran
Joined
Jul 19, 2005
Messages
1,258
Reaction score
31
Gender
Male
Political Leaning
Independent
Bush is using it all as an excuse so we all can have a loophole in the tax system now, ya!


Not, I'd be a hell of alot more gleeful if he'd get rid of that damn income tax, but nooooo...we can't quit spending.

I hate taxes, I hate the feds, anarchy rules!

Anyway.....I think there should be no estate tax as long as the rest of us don't pay more taxes.
 

Alan Ryan

Member
Joined
Jul 28, 2005
Messages
51
Reaction score
0
Location
Lincolnshire, England.
Gender
Male
Political Leaning
Undisclosed
Iriemon said:
Should estates be taxed? Or to put it another way, should people inherit assets tax free?
All questions about taxation are ultimately moral questions. A tax on inherited wealth is justified by notions of social and economic justice.

Unregulated economic privilege would result from the abolition of the inheritance tax, and confer advantage through the happy accident of having affluent parents. Without some redistributive levy on the fortunes of the wealthy, in a couple of generations vast accumulations of capital would be in the hands of a small number of "lucky" individuals. This is the route to a plutocracy that would result in a social aristocracy entirely alien to American concepts of success on merit.
 

edb19

Member
Joined
May 31, 2005
Messages
122
Reaction score
0
Location
Sylvania, Ohio
Gender
Female
Political Leaning
Conservative
I guess I'm just anti-taxation.

I work extremely hard for MY MONEY - without question, I EARN every dime. I don't believe that the government should get a portion of MY income before I even see it. Along the same line - the money I've worked hard for since the age of 16 (and paid taxes on) shouldn't be taxed a second time because I died. My husband, children, grandchildren (or whomever I decide to leave my money to) shouldn't be penalized because I planned ahead and didn't spend every cent of MY MONEY.

Again - the public sector in a free market society could provide many of the same services and do them better than the government does. I've read (sorry, don't remember the source) that the government is the largest employer in the country - sorry, but that strikes me as wrong. They perpetuate themselves in order to justify their existence.
 

cnredd

Major General Big Lug
DP Veteran
Joined
Jul 5, 2005
Messages
8,682
Reaction score
262
Location
Philadelphia,PA
Gender
Male
Political Leaning
Slightly Conservative
edb19 said:

I work extremely hard for MY MONEY
Dude...seriously....If I got Donna Summer going through my head for the next two days, you are SO dead!:?
 

edb19

Member
Joined
May 31, 2005
Messages
122
Reaction score
0
Location
Sylvania, Ohio
Gender
Female
Political Leaning
Conservative
cnredd said:
Dude...seriously....If I got Donna Summer going through my head for the next two days, you are SO dead!:?

I'm so sorry - didn't even occur to me:3oops: . It's just that I'm having my first vacation days in over a year - this past work year has been really heavy duty.
 

deadroses

New member
Joined
Jul 30, 2005
Messages
47
Reaction score
0
Gender
Female
Political Leaning
Liberal
I like taxes.. i know crazy thing to say around here.. I agree with the inheritence tax.. aww go whine to your mummy and da because you will be taxed on what you really didn't earn in the first place.. whether or not they did...

and for income taxes... hell..if you want to see your money before the government does... well. plan on spending more on your water, roads, gas, cars, properties, heat, electricity, cable..... privitation my friend... higher costs... hell who cares about the poor.. they don't need water.. oh you work hard at mininum wage.. have two kids.. screw you.. i earned my money.. i don't want to help you...

yeah. that would be a great society( or lack there of) to live in

:roll:
 

128shot

DP Veteran
Joined
Jul 19, 2005
Messages
1,258
Reaction score
31
Gender
Male
Political Leaning
Independent
lets just not have an ounce of truth in our posts anymore huh deadroses ?
 

Hume

New member
Joined
Aug 12, 2005
Messages
19
Reaction score
0
Gender
Male
Political Leaning
Conservative
deadroses said:
I like taxes.. i know crazy thing to say around here.. I agree with the inheritence tax.. aww go whine to your mummy and da because you will be taxed on what you really didn't earn in the first place.. whether or not they did...

and for income taxes... hell..if you want to see your money before the government does... well. plan on spending more on your water, roads, gas, cars, properties, heat, electricity, cable..... privitation my friend... higher costs... hell who cares about the poor.. they don't need water.. oh you work hard at mininum wage.. have two kids.. screw you.. i earned my money.. i don't want to help you...

yeah. that would be a great society( or lack there of) to live in

:roll:
As to the first paragraph:

If, as you imply, I don't have any claim to the money my "mummy and da" earned, what claim does the government have to it over me? Ok, the money was given to me, but I didn't earn it; but the government didn't either, nor did the poor guy in the next paragraph, so why the hell should they get it? It was my parents; they have to right to give it as they see fit. They worked hard so that I could live a good life; hopefully I'll do something with the money, but if I want to sit around, that's my decision. It's not what I want to do with the money; I didn't earn it. It's what my parents wwanted to do with it, because it was their money.

As to the second paragraph:

Nothing that you mentioned has to do with income tax. You pay taxes on roads,water, police, etc. Electricity, gas, and heat; what does that have to do with anything? You pay for these separately. If you're suggesting they're always positively influenced by government activity, look at Iraq and gas.

Again, its my income; why should anyone else receive what I earned? If some guys poor because he refuses to work or refused to go to school, why should he get my money that I earned through working in school and now? What claim does anyone else have on that money?
 

edb19

Member
Joined
May 31, 2005
Messages
122
Reaction score
0
Location
Sylvania, Ohio
Gender
Female
Political Leaning
Conservative
Hume - I think I like you. Couldn't have said it better myself. ;)
 

Iriemon

DP Veteran
Joined
Aug 10, 2005
Messages
19,405
Reaction score
2,187
Location
Miami
Gender
Undisclosed
Political Leaning
Undisclosed
Alan Ryan said:
All questions about taxation are ultimately moral questions. A tax on inherited wealth is justified by notions of social and economic justice.

Unregulated economic privilege would result from the abolition of the inheritance tax, and confer advantage through the happy accident of having affluent parents. Without some redistributive levy on the fortunes of the wealthy, in a couple of generations vast accumulations of capital would be in the hands of a small number of "lucky" individuals. This is the route to a plutocracy that would result in a social aristocracy entirely alien to American concepts of success on merit.
Aside from the "fairness" issue of people who work having to pay tax while people who inherit do not; your post raises a broader, social policy issue.

Do we want to encourage wealth staying in families by eliminating a tax on intergenerational transfers and taxing people who work more to make up the difference? What social good is created by that policy? Such a policy doesn't seem to reward merit, hard work and talent to me.
 

Iriemon

DP Veteran
Joined
Aug 10, 2005
Messages
19,405
Reaction score
2,187
Location
Miami
Gender
Undisclosed
Political Leaning
Undisclosed
Hume said:
As to the first paragraph:

If, as you imply, I don't have any claim to the money my "mummy and da" earned, what claim does the government have to it over me? Ok, the money was given to me, but I didn't earn it; but the government didn't either, nor did the poor guy in the next paragraph, so why the hell should they get it? It was my parents; they have to right to give it as they see fit. They worked hard so that I could live a good life; hopefully I'll do something with the money, but if I want to sit around, that's my decision. It's not what I want to do with the money; I didn't earn it. It's what my parents wwanted to do with it, because it was their money.
What claim does the government have on money I eaned over me? I work hard so that I can live a good life with my family; hopefully I'll do something with the money I earned, but if I want to sit around, that is my decision.

Why does the government have a greater claim over money I worked for and earned, compared to money Paris Hilton inherited for the talent of being born to a wealthy family?

As to the second paragraph:

Nothing that you mentioned has to do with income tax. You pay taxes on roads,water, police, etc. Electricity, gas, and heat; what does that have to do with anything? You pay for these separately. If you're suggesting they're always positively influenced by government activity, look at Iraq and gas.

Again, its my income; why should anyone else receive what I earned? If some guys poor because he refuses to work or refused to go to school, why should he get my money that I earned through working in school and now? What claim does anyone else have on that money?
This goes to the issue of whether there should be a tax at all as opposed to what should be taxed, or not, which is a completely different issue. That is a nice hypothetical issue, but given we do have a Govt and a populace that likes its entitlement, the question is, why should someone who works pay MORE of that tax so Paris can pay NO tax on money she inherits?
 

Iriemon

DP Veteran
Joined
Aug 10, 2005
Messages
19,405
Reaction score
2,187
Location
Miami
Gender
Undisclosed
Political Leaning
Undisclosed
128shot said:
Bush is using it all as an excuse so we all can have a loophole in the tax system now, ya!

Anyway.....I think there should be no estate tax as long as the rest of us don't pay more taxes.
It is a zero sum game. If Paris pays NO tax on money she inherits, other taxpayers must pay MORE to make up the difference.

Of course, there is a way we can give Paris her $28 million tax free, and cut taxes on everyone else, and fight two wars, and increase the defense budget by a third, and give prescription drug benefits.

Can anyone figure out how we could do all this? :)
 

Iriemon

DP Veteran
Joined
Aug 10, 2005
Messages
19,405
Reaction score
2,187
Location
Miami
Gender
Undisclosed
Political Leaning
Undisclosed
edb19 said:
I guess I'm just anti-taxation.

I work extremely hard for MY MONEY - without question, I EARN every dime. I don't believe that the government should get a portion of MY income before I even see it. Along the same line - the money I've worked hard for since the age of 16 (and paid taxes on) shouldn't be taxed a second time because I died. My husband, children, grandchildren (or whomever I decide to leave my money to) shouldn't be penalized because I planned ahead and didn't spend every cent of MY MONEY.

Again - the public sector in a free market society could provide many of the same services and do them better than the government does. I've read (sorry, don't remember the source) that the government is the largest employer in the country - sorry, but that strikes me as wrong. They perpetuate themselves in order to justify their existence.
How are you going to pay for the defense at $400+ billion a year? Volunteer force based on volunteer donations? How are you going to pay for fighting 2 wars at about $100 billion a year? How are you going to pay interest ($320 billion) on the Republican debt? Default on the notes?

And that's if you don't mind seeing starving old folks and kids lined up at stoplights begging for something to eat.
 

LaMidRighter

Klattu Verata Nicto
DP Veteran
Joined
May 19, 2005
Messages
30,534
Reaction score
10,682
Location
Louisiana
Gender
Male
Political Leaning
Libertarian - Right
Iriemon said:
How are you going to pay interest ($320 billion) on the Republican debt?
Stop right there, that is complete liberal:spin: and the biggest load of horse**** I have ever heard, not necessarily your fault, but just from people who don't face historical fact. Borrowing was increased during LBJ's "Great Society" and Carter extended those social programs, the U.S. has had a deficit going since at least the mid-sixties, yes, Nixon was guilty too, this was a period when the Democratic party had a deathgrip on the House and Senate(the branch responsible for budgets). Thank you for your time.
Sorry, I get frustrated at that idea that Republicans ran up the national debt.
Back on topic though, estate taxes boil down to double taxation which is just plain wrong, period.
 

Hume

New member
Joined
Aug 12, 2005
Messages
19
Reaction score
0
Gender
Male
Political Leaning
Conservative
Iriemon said:
This goes to the issue of whether there should be a tax at all as opposed to what should be taxed, or not, which is a completely different issue. That is a nice hypothetical issue, but given we do have a Govt and a populace that likes its entitlement, the question is, why should someone who works pay MORE of that tax so Paris can pay NO tax on money she inherits?
My dad got taxed when he earned the money, he'll be taxed again if he spends it; now he can't even give it to his son without some guy coming and taking another unearned portion of it?

And stop using the Paris Hilton example, its extreme and stupid. She has also built an empire out of herself and makes tons of money modelling, selling products, advertising, etc. She pays money on all of that, and by economic measures contributes more to America than most other Americans.

Inheritance shouldn't be taxed because its money that already has been. Why should someone else be taxed twice so you can not be taxed at all?
 

Hume

New member
Joined
Aug 12, 2005
Messages
19
Reaction score
0
Gender
Male
Political Leaning
Conservative
Iriemon said:
How are you going to pay for the defense at $400+ billion a year? Volunteer force based on volunteer donations? How are you going to pay for fighting 2 wars at about $100 billion a year? How are you going to pay interest ($320 billion) on the Republican debt? Default on the notes?

And that's if you don't mind seeing starving old folks and kids lined up at stoplights begging for something to eat.
That is the one thing the government was created for; protection of the people! The American government was created to defend America, and all taxes were to serve this purpose. I have no problem with paying for the military.

And stop trying to draw sympathy by bringing up poor kids and starving "old folks"; its pathetic and everytime you say it you said like a four year old whining to their mother about donating to charity. No matter how much they starve, it still doesn't give you a right to take my money.
 

Iriemon

DP Veteran
Joined
Aug 10, 2005
Messages
19,405
Reaction score
2,187
Location
Miami
Gender
Undisclosed
Political Leaning
Undisclosed
LaMidRighter said:
Stop right there, that is complete liberal:spin: and the biggest load of horse**** I have ever heard, not necessarily your fault, but just from people who don't face historical fact. Borrowing was increased during LBJ's "Great Society" and Carter extended those social programs, the U.S. has had a deficit going since at least the mid-sixties, yes, Nixon was guilty too, this was a period when the Democratic party had a deathgrip on the House and Senate(the branch responsible for budgets). Thank you for your time.
Sorry, I get frustrated at that idea that Republicans ran up the national debt.
And I get frustrated with the idea that the Republicans are no more to blame for our huge national debt than the Democrats.

The US debt in 1980 was $1 trillion, 1.8x greater than revenues. By the time Clinton came into office 12 years later, the debt was at 4 trillion, 3.7x reveneues. When Clinton left office, the debt was at 5.7 trillion, 2.8X revenues. Now the debt is at 7.9 trillion, and it is 3.9x revenues.

You can get the numbers from the Congressional Budget Office; CBO.gov, and the Department of the Treasury (http://www2.publicdebt.treas.gov/opd/opd.htm). Or I can post them.

Of the $7.8 trillion US debt, $1 trillion existed before Reagan came into office, $1.7 trillion growth occurred during the Clinton administration and the balance, 5.1 trillion, is thanks to our Republican leaders. From 1980-2005, Republicans were in the WH 68% of the time, and account for 75% of the growth in debt during that period.

While it is true that some of the debt growth (1.7 trillion) occurred during the Clinton administration, he inherited a $340 billion deficit budget. The debt has grown by 2.2 trillion under Bush II (so far); and he inherited a budget that was in surplus.

Numbers don't spin. It is completely fair to call it the "Republican debt." That is the the Reagan-Bush legacy -- the "pass the buck" generation.

Back on topic though, estate taxes boil down to double taxation which is just plain wrong, period.
The person who pays me for services has already paid taxes on the money he pays me. So why isn't it wrong, period, why I pay double taxation?
 
Last edited:

Iriemon

DP Veteran
Joined
Aug 10, 2005
Messages
19,405
Reaction score
2,187
Location
Miami
Gender
Undisclosed
Political Leaning
Undisclosed
Hume said:
My dad got taxed when he earned the money, he'll be taxed again if he spends it; now he can't even give it to his son without some guy coming and taking another unearned portion of it?

And stop using the Paris Hilton example, its extreme and stupid. She has also built an empire out of herself and makes tons of money modelling, selling products, advertising, etc. She pays money on all of that, and by economic measures contributes more to America than most other Americans.
Your dad should not get taxed for spending it, there is no federal sales tax. There may be a state sales tax, but that is not federal tax policy.

Your dad can do whatever he wants for it. It is the son that receives the income that should pay the tax on what is "income" to him.

If I perform services for your dad, why shouldn't he be able to pay me without "some guy coming and taking another unearned portion of it"?

Why should he be able to give the money to you tax free but not me tax free?

I don't have any problem with Paris earning lots of money. She pays taxes on that. I have a problem with Paris inheriting $28 million and not having to pay a dime on that. I don't understand the logic of "she contributes more to America" (a debatable proposition) and therefore shouldn't have to pay tax. Are you proposing that the tax rate be set based upon how much someone "contributes" to America? How has a trust fund baby who inherits 20 million contributing more to American than someone who works?

Inheritance shouldn't be taxed because its money that already has been. Why should someone else be taxed twice so you can not be taxed at all?
Everything is taxed twice. The guy who pays me has paid a tax, so that money is being taxed twice too. That is not a rationale for exempting inheritance, or nobody would have to pay a tax.

Where did I write or imply I thought I should have to pay no tax? I just do not want to pay MORE tax so that the Parises can pay NO tax.
 
Last edited:

Iriemon

DP Veteran
Joined
Aug 10, 2005
Messages
19,405
Reaction score
2,187
Location
Miami
Gender
Undisclosed
Political Leaning
Undisclosed
Hume said:
That is the one thing the government was created for; protection of the people! The American government was created to defend America, and all taxes were to serve this purpose. I have no problem with paying for the military.

And stop trying to draw sympathy by bringing up poor kids and starving "old folks"; its pathetic and everytime you say it you said like a four year old whining to their mother about donating to charity. No matter how much they starve, it still doesn't give you a right to take my money.
What can I say? You are entitled to your view -- it is a minority. Most Americans have decided they don't want to live in a Dickenesque type of society.

BTW, I wasn't trying to draw sympathy for the poor. I personally do not want to live in an America were grandmas are begging for food at a street corner. Whether it is because they are poor, stupid, or unlucky. The reason we don't have that in America is because of things like Social Security -- a program you would do away with.

I agree SS has its problems. I can see no reason why we have the likes of Warren Buffet on the SS dole, for example.
 

128shot

DP Veteran
Joined
Jul 19, 2005
Messages
1,258
Reaction score
31
Gender
Male
Political Leaning
Independent
The irony being, we want SS, but I can walk into the street corner down town and find at least 10 people who would abolish welfare on the spot.



Just sayin...
 

Iriemon

DP Veteran
Joined
Aug 10, 2005
Messages
19,405
Reaction score
2,187
Location
Miami
Gender
Undisclosed
Political Leaning
Undisclosed
128shot said:
The irony being, we want SS, but I can walk into the street corner down town and find at least 10 people who would abolish welfare on the spot.

Just sayin...
I agree, it is an irony. SS is really a form of welfare for the elderly. Conservatives complain about socialism all the time, but in fact we live in a socialist society, and if you asked the question: "Should we abolish SS?" I'd be surprised if you get more than 10% affirmative response.

People, especially conservatives, rail at the thought of national health, but we have had a national healthcare system for decades. It's called medicare. You just have to be over 65 (or whatever the age limite is) to qualify.

Another irony is that we give these freebies and entitlements to the eldery, representing a huge transfer or wealth, but asset-wise, the elderly are the richest group of Americans.

"Welfare", as the concept of a government dole being paid indefinitely to able bodied people under 65, was dramatically scaled back in 1997.

I agree you could find a lot of people who would say we should get rid of welfare. But if you asked them whether the Govt should provide a safety net of temporary unemployment payments for people who lost their jobs, the overwhelming majority would say "yes."
 

Alan Ryan

Member
Joined
Jul 28, 2005
Messages
51
Reaction score
0
Location
Lincolnshire, England.
Gender
Male
Political Leaning
Undisclosed
Iriemon said:
Aside from the "fairness" issue of people who work having to pay tax while people who inherit do not; your post raises a broader, social policy issue.

Do we want to encourage wealth staying in families by eliminating a tax on intergenerational transfers and taxing people who work more to make up the difference? What social good is created by that policy? Such a policy doesn't seem to reward merit, hard work and talent to me.
The short answer to your questions is No. If enormous fortunes are allowed to accumulate because inheritance tax doesn't redistribute some of the wealth, a situation will arise (pretty quickly) in which the already privileged will buy more privileges that will indemnify the plutocracy against its social dues. In other words, the gap between rich and poor will widen and incentives to succeed on merit will be weakened. As you say, people will have to work harder to make up the difference, and will they be motivated to do this in a society that encourages the growth of a leisured class of conspicuous consumers ?
 

Iriemon

DP Veteran
Joined
Aug 10, 2005
Messages
19,405
Reaction score
2,187
Location
Miami
Gender
Undisclosed
Political Leaning
Undisclosed
Alan Ryan said:
The short answer to your questions is No. If enormous fortunes are allowed to accumulate because inheritance tax doesn't redistribute some of the wealth, a situation will arise (pretty quickly) in which the already privileged will buy more privileges that will indemnify the plutocracy against its social dues. In other words, the gap between rich and poor will widen and incentives to succeed on merit will be weakened. As you say, people will have to work harder to make up the difference, and will they be motivated to do this in a society that encourages the growth of a leisured class of conspicuous consumers ?
Well, people will be incentivized to be conceived into the right womb. I've been studying and working hard, but so far I haven't found any billionaires who are willing to adopt me and bequeath their fortune to me, so I can earn that privileged tax free status along with the Paris Hiltons out there.
 
Top Bottom