Comment by wtbob | Hacker News Reader

Comment by wtbob | Hacker News Reader

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> Almost all taxation occurs when the money changes hands. I don't see why massive estate transactions should be exempted.

Currently, yes. There's no reason why we couldn't have wealth taxes or land-value taxes rather than transaction taxes, of course.

It's also offensive that the estate tax is punitive: I believe that current tax is 40% on everything over a certain amount. That is, IMHO, insane: the State is declaring that it has a 40% stake in all of someone's financial success, despite having taxed every penny of that when it was earned in the first place.

Finally, you're missing the point: we tax money at transactions because it's at those transactions that value is created: I pay you $25 for dinner, and I get $25+x value from that meal, while you pay $25-y to create it, leaving the economy $x+y better. I think it's reasonable to attempt to capture some of the value of those transactions to fund the government whose security & stability make them possible (e.g. your restaurant need not hire guards, because we have police; I need not pay for a road from my house to your restaurant, because one has been provided, &c.). But there's no value created at death: it's just a transfer, and to tax it (particularly at punitive rates) just seems like grasping greed.

> I have no problem paying my share of the national bills; I'd be ashamed to try to shift my share onto others.

I really hate this tone from supporters of high taxation, for two reasons: first, at least this proponent of changing our tax system doesn't object to paying his share; second, I believe many tax supporters want to raise taxes on somebody else.

We tax money because we have services to pay for which are important enough that no individual or corporation alone should have exclusive control over, or more commonly, for "the common good". We as a voting people decide (via elected representatives) how we want to raise this money. We do it in a way that seems least painful for (hopefully) the largest number of people.

The exact definition of what's a good trade-off between services afforded and who to tax how much differs from one person to another, and one government to another. The common undercurrent, though, is that there is stuff to pay for, and that the decision lies with the people (via elected representatives) and not some arbitrary set of principles such as "because value is created".

We adopt laws based on such principles because they seem like a good enough solution that many can agree on. Many can also agree that taking money from someone who's dead is doing less harm than taking more money from someone who's still alive or cutting services (which also amounts to taking from people who are still alive). Many also agree that the deceased should have some say, pre-mortem, in how their legacy gets allocated.

That's why you have the right to bestow money upon your chosen heirs at all, rather than it all going to the state, or the king, or the first rando who happens to loot your home. Not because we follow unchangable principles, but because enough of us agree that it's the right thing to do. It's a subtle distinction.

A constitution is the lowest common denominator that a large enough majority of people can agree on. The US Constitution does not go into detail about what to tax and why. If there is a subsequent decision by the Supreme Court that acts as authoritative source for your argument, I'm happy to see it. Otherwise, your interpretation is just that, an opinion that people may agree with or disagree.

If, collectively, the people decide that the dead person's untaxed non-charitable donation rights are more important than the living's tax rates and/or services, I'm sure we can find a way to reduce or eliminate estate taxes.

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