Comment by bhawks | Hacker News Reader

Comment by bhawks | Hacker News Reader

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The temporarily embarrassed millionaire meme is a punchline to a joke (look at those stupid greedy people they don't know how stupid they are).

Inheritance taxes don't sit well for many reasons that are actually interesting to discuss

+ People's desire to support friends, families and personal interests is a core reason for an individual to work beyond individual self sufficiency. This makes it very easy to empathize with the millionaire impacted by gift / inheritance taxes that may never be applied to you.

+ Taxes have already been paid on this money - double dipping is very easy to cast as unfair.

+ Clumsy implementations of these types of taxes create situations where small family owned farms and businesses need to be liquidated to cover taxes causing more pain and disruption for families.

+ The constant slippery slope of taxes initially targeted at 'the rich' but over time effecting more and more people due to combinations of inflation and revenue seeking.

+ The simple fact that if the US just seized all the wealth of 800+ billionaires today - it would only be worth 6.2 trillion dollars [1], which doesn't even cover the 6.8 trillion dollars the government spent in 2024. So what do we do next year?

Do we need more revenue? Are we getting the revenue the right way (aka is everyone paying their fair share)? Maybe... But there is certainly a spending problem too.

1: https://inequality.org/article/billionaire-wealth-keeps-grow...

> People's desire to support friends, families and personal interests is a core reason for an individual to work beyond individual self sufficiency.

The fact that the income being taxed is "beyond individual self sufficiency," actually makes it easier to justify taxing. This isn't someone's food budget--it's the extra on top after one's life is fully funded.

> Taxes have already been paid on this money - double dipping is very easy to cast as unfair.

This argument has never made sense. Money gets taxed over and over. It's not like a dollar bill gets taxed once and then you mark it with a pen so it never gets taxed again. Money typically gets taxed when it changes hands: Your company pays you money, it gets taxed. You buy something from a store, that money gets taxed. The store owner issues a dividend to shareholders, it gets taxed. The shareholders get bank interest from that money, it gets taxed. There's nothing unusual about taxing a dollar over and over.

> Clumsy implementations of these types of taxes create situations where small family owned farms and businesses need to be liquidated to cover taxes causing more pain and disruption for families.

This is a sentimental-sounding trope that doesn't really happen in practice. In the USA, inheritance income under $13M doesn't even get taxed at all. This is well outside of the scope of "small farms and businesses." Inheritance, in fact, tends to benefit recipients tax-wise: An heir is allowed to adjust the cost basis of an inherited asset to its market value on the day of the previous owner's death, so that all the previous owner's unrealized capital gains never get taxed. Sitting on $1M of capital gains from your meme stock that you don't want to pay taxes on? Just leave it to your kid in your will--those gains won't be taxed!

The other commenter addressed your other two issues.

I agree with almost all your points, except two:

The US estate tax specifically got basically bigger exemptions every time it was touched (even adjusting for inflation), and returns have been falling precipitously for basically the last 25 years. If you own less than $13M at death, it does not affect you at all right now.

> The simple fact that if the US just seized all the wealth of 800+ billionaires today - it would only be worth 6.2 trillion dollars

Sure-- but I think this is a bit of a strawman. To me, and a lot of people that argue in favor of wealth/estate taxation, the purpose is not to substitute income taxes (like what Trump wants to achieve with tariffs)-- the goal is to get wealth inequality back under control, not to balance the government budget with those tax returns.

Another perspective on wealth distribution is that the top 1% own a third of the country. In my opinion, if you have enough wealth (and liquid enough wealth) to outright buy an average home at sticker price, then you are part of the problem;

I absolutely don't want to compete with people like that on the housing market, and I don't want them to extract excessive rents from people like me (i.e. not-1%ers) either, but thats exactly what happens right now.

> But there is certainly a spending problem too.

I don't really agree with this. I think (expected) government responsibilities have grown tremendously over the last century (mainly for good reason).

I'm confident in saying the the American-favored approach to healthcare ("everyone takes care of it on their own, and negotiates/pays for it by himself") has completely failed for IMO very clear reasons (demand for healthcare is inelastic and only government can force pricing transparency, prevent collusion and a generally fair provider-market in the first place-- obviously).

I'm also confident that shifting back more pension responsibilities onto citizens themselves is also a bad idea, because it creates extremely bad potential outcomes in case of an economic crash. Government providing a survivable social security baseline is just a very clearly good idea to me.

Those two points (healthcare + social security) account for the vast majority of government budget, I think they are basically a good idea, and cutting costs with foreign aid, research funding, environmental regulation/enforcement etc. has IMO neither the potential to save significantly in the first place, nor is it beneficial to do so by itself (I'd even go so far and call the whole doge initiative a thinly veiled propaganda department for the current administration).

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