After all it's new income for them.
And if it did, then taxes would have been done a long time ago, because money in its endless circulation pays taxes all the time.
To emphasise this point, when an employer pays an employee wages, they pay it with a dollar that someone else earned (and paid tax on) and paid to them (and likely paid sales tax on). Money isn’t taxed, and neither are people; transactions are. An estate transfer is a transaction.
A house isn’t a person. Saying transactions, not people, are taxed doesn’t mean that only transactions are taxed.
* state sales sax on car * future city property tax on car * fed dividend tax on money used to pay for car * apple already paid state and fed corp income tax on money used to pay dividend * some person already paid income tax on money used to buy iphones/macs/chargers etc.
Is your position that the estate tax in particular is egregious or that all taxes are egregious? If you only want money to be taxed once then you'd have to redo all the taxes no?
If it is possible for taxation to be egregious, then at some point there must be a boundary which is crossed. How can we define what is a just amount of property to confiscate with our subjective judgment?
It is a moral issue in principle. In practice it amounts to whatever politicians can get away with. Ideologues present wealth as evidence of greed. Envy is celebrated. The person with a bigger slice of pie is blamed for other's perceptions of insufficient portions, as if markets represent a zero-sum game.
Cries of, "You didn't build that" are overly simplistic and misleading. If they were valid, collectives and central planners could produce surpluses without need for individualized incentives. Yet history tells us a different story.
That slice of pie which so many here seem unhappy with is much bigger than what was eaten in years before. This is the result of individual profit incentives, competition and innovation, not taxation or central planning.
If it is to be a moral issue, perhaps we should start from the point of not coercing others or violating their property rights?
> not coercing others or violating their property rights
Property rights always involve coercion, at least when you get beyond the basics of personal property. How does, say, Jeff Bezos own a variety of lavish properties across the country [1] when a half-million people in the US are homeless?
The short answer is that he depends on coercion. He expects that both private and state actors will coerce people into staying away from stuff he has claimed. Violently if necessary. And we're not even getting into the many flavors of coercion that underlie his enormous wealth.
The fundamentalist libertarian position always ends up in these sorts of incoherencies, because it makes ardent demands of a society it wants no part of otherwise.
[1] https://www.businessinsider.com/jeff-bezos-owns-five-massive...
As for Amazon, maybe look more closely at the government interventions in the financial markets. Yes, Bezos is an entrepreneurial figure. He is also symptomatic of an artificially supported economic system. The central bank injects liquidity. Financial markets acquire it first, and consumers are left with the inflation.
I would argue that large concerns like Amazon are enabled by the current paradigm. We could describe it as a tax by other means and price fixing of interest rates.
https://www.nasdaq.com/articles/amazon-borrows-%2410-billion...
As for libertarianism, observing that adds no more to the conversation than me calling you a socialist, statist or authoritarian.
Jokes aside, the rules of property are set up by society to encourage certain jointly beneficial outcomes. Money itself is an inherently social construct. (Imagine how far you'd get creating your own private currency that only you used.) And we are all temporary beings, here a little while and gone. Yes, some of the rules designate some of the property as yours to dispose of for the duration. Which is great! But make no mistake that these rules are contingent.
If tomorrow I hacked all the banks and land registries so I owned everything, people wouldn't say, "Well, I guess that's how it is now." The same is true if I did it technically within the rules. Everybody would make new rules. And they'd be right to. In the phrasing of James Carse, the current rules are the finite game, but like all finite games, the rules are generated by what he calls the infinite game: https://en.wikipedia.org/wiki/Finite_and_Infinite_Games
Coinbase and other places seem to facilitate private currencies.
To me it's silly to see how much unused land there is in the USA but people aren't allowed to use it because a few people showed up 150 years ago and claimed it for themselves. And when they did they stole it from other people. Now people are just supposed to respect that forever?
The rule against perpetuities only prevents you from constructing a zombie legal entity which outlives you permanently. Some places have a fixed, high time limit; many merely have the non-onerous rule that you can only leave it to people who were alive at the time of your death.
Maybe we can compromise on you taking yourself to some remote spot cut off from a society and generating your wealth there? Then we can all be sure your gains are truly yours, and so nobody will mind you hoarding them.
This is nothing but double taxation. Ie highway robbery.
But yes, when a rich person gives their money to another person, that other person now has to pay tax. An estate, gift, or income tax.
Many rich people pay their employees, some don't; wage theft is very popular, as are other forms of labor exploitation. But an educated, healthy, available labor force is a very expensive asset to create. We all invest in creating that through things like paying for schools, health care, and raising children. One of the ways we pay for creating that asset is taxes. Rich people, as the ones most benefiting from society, and also as the ones with the most spare money, should pay their fair share for that.
EDIT: the point of raising it is in the context of this discussion, we are talking about the very wealthy. A $15,000 gift to their children isn't very much of a transfer as a percentage. To hand off large amounts of wealth to the next generation, for sure the annual gift exclusion isn't nearly enough to avoid inheritance taxes.
I was under the impression there's a large exemption for inheritances under a few million and then it's still a number lower than income tax on the rest.
Philosophically, you don't own anything after you're dead. Someone else, alive, is getting income in the form of an inheritance.
In any case, in the US the estate tax and the gift tax are basically the same thing, so rich people can give the same millions to their kids either before or after they die and pay basically the same taxes: https://www.cbo.gov/publication/57272
Similarly, the rich person paid taxes and then their rich kids pay taxes on their inheritance.
No more double taxation, and everyone gets to do whatever they want with their post-tax income!
The reason they can build modern stuff is due to the work of billions of people networked in space and time (knowledge, processes & culture, tools, infrastructure) to which the "self-made rich person" has the extreme fortune to be able to build on (even today most people are born in places too far away to benefit equally from that network and are only able to access a tiny part of it, so no matter their own contribution they are lacking the base).
Tell me, why would a person whose accomplishments are ~99.99999% based on the work and accomplishments of others be allowed to monopolize it as if they were truly responsible for everything?
As far as I'm concerned the government should truly not be allowed to tax your entirely self-made mud hut disconnected from infrastructure in the middle of nowhere.
For all else, you benefit from gigantic network effects (in space: all other people alive making things, in time: everything we got from previous generations) and should pay your dues. Given that, even a very high tax rate especially after death is extremely generous. The descendants had even less to do with anything the person that sat in a perfect place in the human network accomplished by making use of their advantageous position (to be exact, zero). At most, their contribution is to be able to use said network very well - although it also happens a lot that they did so by preventing others from using it.
Wealth is the incentive for the wealth creation you're observing here.
In some cases it does make sense for employers to increase compensation. Especially when productivity is high. Usually productivity gains are a result of innovation, which is incentivized by the profit motive.
https://www.npr.org/2014/01/27/267145552/the-middle-class-to...
This just isn't true. I have entrepreneurs on both sides of family going back at least 3 generations. Many of them were happy just to create something and make a decent living.
As an example, look at Bob's Red Mill, a 500+ person company in Oregon. The owner recently turned the whole thing over to his employees: https://www.oregonlive.com/clackamascounty/2010/02/bobs_red_...
You could also look at worker-owned co-ops. In SF, Arizmendi is a very successful string of worker-owned bakeries: https://arizmendibakery.com/faq
Or take a look at the Zingerman's community of businesses in Ann Arbor, MI: https://www.zingermanscommunity.com/about-us/a-bit-of-zinger...
The founder, Ari Weinzweig very clearly doesn't give a shit about the profit incentive. I recommend his book, "A Lapsed Anarchist's Approach to Building a Great Business": https://www.zingermans.com/Product/zingermans-guide-to-good-...
I grant that part of corporate America's civic religion is pretending that greed is the only possible motivator for anything good. And maybe that's true for some people. But if you talk with actual entrepreneurs, especially ones outside the tech filter bubble, their true motivations are rarely about a chance at vast riches.
Keep in mind that death taxes may apply not only to what is inherited by family members, but charitable foundations created as well. Charity starts with the possibility of abundance.
That's definitely not true. The great bulk of people, who do the great bulk of the work of value creation, can't possibly be motivated by wealth, because definitionally they won't receive it.
There's also no reason to think that the ecommerce revolution wouldn't have happened without Bezos or some other person becoming a zillionaire. There are plenty of entrepreneurs who are happy as long as they get to make things happen and make decent money.
Absurd levels of wealth are an incentive for wealth concentration, not wealth creation. The creation of value would certainly happen without that. And generally happens better without it, which is why we have things like antimonopoly laws.
Ultimately, it's not a question of how deserving billionaires are (they obviously aren't). It's more a question of how to best advance the interests of our species as a whole.
Where do you see "two wrongs"? I don't understand this reply at all. I don't see the connection to what I actually wrote.
> Ultimately, it's not a question of how deserving billionaires are (they obviously aren't). It's more a question of how to best advance the interests of our species as a whole.
I agree, and I don't see any connection to what I wrote here either, meaning how this is supposed to be a contradiction to my point?
The Crown Estate is not the personal property of the monarch, it's essentially just government assets. Who is the Crown Estate going to pay taxes to, itself?
Here is a better discussion of the details around the queen's estate tax exemption: https://www.townandcountrymag.com/society/money-and-power/a3...
Pretty ingenious way to allow "families to pass wealth from generation to generation, indefinitely, without estate taxes at each death". The UK should do something about that. I hear significant estate taxes are important to a democracy to prevent the rise of a noble class.
I'm curious if anyone knows how or why The Duchy of Lancaster[2] was not included in the The Crown Estate?
[1] https://www.bbc.com/news/explainers-57559653
[2] https://www.lancastercastle.com/history-heritage/duchy-of-la...
[3] https://www.standard.co.uk/insider/royals/queen-elizabeth-ne...
(and yes obviously the hereditary monarchy and peerages do not belong in the modern era let alone the 21st century, but changing that in a not especially democratic country is hard)
It isn’t some zero sum game, where there is some limited amount of wealth, and by them having it others must be destitute.
I’d be curious if those with several children feel differently than those with none. I love the idea of my sacrifices today one day benefitting my grandchildren’s’ grandchildren in a material way. I feel like if more people lived with the thoughts of how they can improve their own descendants lives over improving their own the world would be a better place.
If you disagree, you can demonstrate your commitment by giving me unlimited power of attorney. I'll use that to your assets and income to my accounts and I'll give you back whatever's truly best for you. I am obviously good, so you can trust me on this.
What is also true is there are those who are weak.
And everyone will have some little power at least, and some amount of weakness.
While Marx thinks it is only used to oppress, that is just what he would do with it. I’d say for every person there is an amount of power they can wield for good, and past that they will use it to oppress.
The most wicked can’t even use their smallest bits of power for good. The best of us at some point would start to use our power to oppress.
There is no neutral ground though, you will use your power (be it physical, emotional, sociological, spiritual), to oppress the weak, or to lift them up.
Because in order to have power in one area (e.g. you’re highly educated, speak well, or wealthy), there is someone else who must be weak (uneducated, stammers, or poor).
To say power is intrinsically bad, is to say being weak is intrinsically bad, because being weak means someone else has power over you. “blessed are the meek” is true, but that is because someone powerful took the side of the weak, and defends them.
The problem today is we have a ruling aristocracy, and they’re not noble and good, but oppressive and evil.
Tuberculosis is natural. Tooth decay is natural. If you believe what's natural is what's good, go hang out with people coughing their lungs out. Stop brushing your teeth. Refuse to take antibiotics. Have your next of kin let me know how long you survive in your immersion in utter facts of nature.
Similarly, if you think power over people is good, prove it. Send me all your money. Sign a power of attorney. I'm good, I promise.
(You also have a lot of fantasies about intrinsic goodness/badness. That may work in particularly Manichean novels involving wizards and whatnot. But please recognize that's the inside of your head leaking out, and not what's actually happening in the world.)
Power over people can be used for good, and can be used for evil.
I would give all my money to that which is good.
Where do you think goodness comes from? You said it is not from nature? So you believe things exist outside of the material world?
Those stories are the way we describe what some material thing is doing. They most certainly exist and not just in my head, they’re just not material.
I’d hope my grandchildren are so well off that they can go get a higher education and get a liberal arts degree for the love of learning. Study history, philosophy, sociology, these are all great fields of study, they just don’t pay well. That they could just be intellectuals and not laborers would be great. After a few generations of just being intellectuals or less if they live lavishly, they will have to return to labor, and that ok.
There is nothing wrong with folks like me getting an engineering degree because they want to work and make money, but it doesn’t seem like a bad desire to hope that your children will not have to labor because you did.
I want my children to be able to do what they want. However, I want to raise productive, functioning adults.
I wish people could study the liberal arts or sciences freely to expand knowledge, not for the sake of money. This is a privilege only provided to those whose parents leave them a large inheritance.
The reason that people have the idea that "unless you get paid to do something it isn’t worthwhile" is because getting paid for something is reasonable evidence that you're creating value for others. That's important to do if you will be consuming the value created by others. Children raised without that feedback loop can easily be not so functional, in that will focus on serving themselves, not others.
If you have enough money to fund things like socially beneficial research, then you should just fund that. The MacArthur Genius Grants are a good example of that. There's no particular reason to think that your particular children are the best ones to be doing that, especially if they've been raised in an environment where their wealth has let them avoid serving others.
Take a look at some of the recent "Who owns Britain" exposés, which looks at land ownership in Britain. Last I checked they weren't making any more land, and a huge percentage of British land is held by nobility who passed it down from the times of William the Conqueror. Am I supposed to think it "just" that someone never has to work a day in their life, while their tenant farmers toil to pay rent, because their great great ... great great grandaddy was friends with a French king?
Sure, early on in the system it's possible for it to be fairly competitive. You have a mix of responsible and irresponsible families passing down wealth, and the ones that do it best will retain their wealth the longest. But over time it becomes a very different game. Take a look through history; the stories it tells don't look good for the bulk of the working class.
It's one thing to be able to leave your wealth to your children, it's another thing to have a completely protected trust that is exempt taxes. The longer this runs, the less money forced back into the economy and through compounding interest it becomes impossible for a new set of "nobility" to reasonable ever achieve the same status.
It is a zero sum game, as there is effectively a limited amount of wealth. And the more it becomes centralized around a noble class the less everyone else has.
You can leave money to your children today, it's not like that's not possible. So I am not sure what you're on about. The loophole being discussed here is doing it free from taxes. Like Elon Musk won't need to shelter his kids kids kids from taxes on his billions. If you make enough money that can be true for you too. But yeah, you might need to teach your kids proper financial skills so that they don't blow through what you leave them so it reaches your grandchildren.
You can already setup a trust today for your kids. You can leave your kids shares in a brokerage account and that has some pretty solid tax advantages. There are a ton of ways to leave behind your wealth that doesn't require completely untaxed assets.
When I die and give my home to my kid that’s not a transaction that a family home going to family.
Or are you arguing that when a husband dies the wealth should be taxed before going to the surviving spouse?
Or if you pay for your kids education (say college - they’re an adult) should that money be taxed?
That's a ridiculous point, by the way. All money is taxed repeatedly. Hand it to a store. Sales tax. Report it as profit. Corporate tax. Pay it to employees. Income tax. Hand it to a different store... There's no "moral" calculus here. We tax economic activity. If you give money to someone else, be it for a candy bar or in an inheritance, that's economics and the apropriate place for government to take a cut is on something that sales linearly with the economy.
"Hey, that's already been taxed!" does have some intuitive appeal, but honestly I think that intuition comes from the game of Tag or something.
But money, being fungible, in constant circulation, and yielding assets and profits from re-investment, has many points at which it might feel fair to tax it.
It might not feel fair, but at least there's more there to discuss.
Same also goes for taxes on real property. My land had already been taxed long before I bought it.
Do you think that all of those taxes are also immoral?