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A friend who considers himself a "progressive" and lumps both the Democrats and Republicans together under the label of "corporate shills" favors the estate tax

A friend who considers himself a "progressive" and lumps both the Democrats and Republicans together under the label of "corporate shills" favors the estate tax because he fears a concentration of power. If those who inherited billions simply bought lots of houses, cars, and boats, he would have little issue. However, he's concerned that democracy requires a more even wealth distribution. I don't necessarily agree, but I thought his point that a concentration of power is what ought to be feared is worth consideration. A few years ago, my wife and I toured the summer "cottages" of the Vanderbilts and others in Newport, RI. At the turn of the century, they spent millions constructing homes that they planned only to occupy for about three months of the year. Today, Anderson Cooper (son of Gloria Vanderbilt) is probably the richest of the heirs to this fortune -- hardly a great case for the estate tax. In the 70's, there was a Vanderbilt family reunion at Vanderbilt University. Of the 100 or so people who attended, none reported to even to be a millionaire. Perhaps a family tree with many siblings per branch divides wealth faster than it can multiply over time? Until recently, a Rockefeller was the Governor of WV, but no one seemed to care that he was not a self-made man. Surely the majority of West Virgina residents would have little in common with his ancestry. Can anyone cite any cases of old money abusing power? One could point to the Bush family, but I argue that they aren't especially wealthy by current US standards. Didn't "W" claim only $8M in assets at election time? However, He is a third generation elected official. Perhaps power is more easily inherited than wealth?

Locke1689 17y ago
As far as I understand it, the estate tax is meant as a counter to the idle rich. It's also only applied to very large amounts of money and, perhaps more relevantly, to the transfer of that wealth. I remember reading an article on the Economist a while ago about this issue and they noted that people who inherited large amounts of money entered the labor market less often. Edit: I can give you the link, but I can't get you behind the paywall, unfortunately. http://www.economist.com/finance/displaystory.cfm?story_id=10024733 http://www.economist.com/finance/displaystory.cfm?story_id=1...
- anamax 17y ago
  > As far as I understand it, the estate tax is meant as a counter to the idle rich. It's also only applied to very large amounts of money and, perhaps more relevantly, to the transfer of that wealth. Since it doesn't do that, why would you think that it is intended to do so? Yes, I know how it's promoted, but look at the reality. The truely big estates aren't subject to estate tax and never will be. As a general rule, when someone says "this will affect the wealthy in a bad way", they're either lying to you or completely clueless.
  - Locke1689 17y ago
    I'm confused to your point, besides a general helplessness.
    - anamax 17y ago
      > I'm confused to your point, besides a general helplessness. It's not helplessness. It's an awareness of how the world works. (Related example, regulatory capture is as solid a law as gravity. It is foolish to act as if it doesn't exist, even if your scheme won't do what you want if it does.) There aren't that many "really rich" people, but they can apply tremendous pressure, have a lot of resources, and are highly motivated. The folks down a rung or two don't have those advantages. As a result, they're the ones who get hit, mostly because they're hittable but also because their collective wealth is much larger than that of the "really big money" folks.
  - ShabbyDoo 17y ago
    >The truely big estates aren't subject to estate tax and never will be. Huh? Do you mean that very wealthy people are able to pay for tax shelter strategies but those with, say, only a few million will end up getting taxed?
    - anamax 17y ago
      > Do you mean that very wealthy people are able to pay for tax shelter strategies but those with, say, only a few million will end up getting taxed? That's one way. Another way is that such estates can be structured so they aren't owned by someone who dies. Or, they're owned in a friendly jurisdiction. And so on.
walkon 17y ago
If the federal government was truly concerned about a "concentration of power," then why isn't it concerned with itself? It is the most powerful entity on the planet, exercising coercion and destruction on a massive scale. Taxing people's estates at death on money that's already been taxed is preposterous. This is an example of the government using coercion to raise money for itself and nothing more. This is the type power one should be concerned about.
- hassing 17y ago
  It's really not that strange that inheritance is taxed. People get emotional about it because of death is involved. But in the end it's a matter of money changing hands - even if one of them is cold.
  - nazgulnarsil 17y ago
    people get emotional about it because making your childrens' lives better is one of the fundamental human motivations for collecting resources.
    - hassing 17y ago
      That might be. But that still doesn't change the fact that your children aren't you. If you're hire your son or daughter to work for you then they still have to pay taxes. I don't like taxes anymore than the next guy. I just don't like the idea that Mr. X should be better of than Mr. Y because Mr. X's grand parents where more successful. You should be able to provide for your children, but it should not excuse them from participating in society themselves.
      - dantheman 17y ago
        Mr. X will be better off then Mr. Y because his grand parents were concerned with his education, were able to provide guidance, had influence, were well respected, etc. Why do we allow all other forms of inequality than money?
      - 17y ago

Locke1689 17y ago

As far as I understand it, the estate tax is meant as a counter to the idle rich. It's also only applied to very large amounts of money and, perhaps more relevantly, to the transfer of that wealth. I remember reading an article on the Economist a while ago about this issue and they noted that people who inherited large amounts of money entered the labor market less often. Edit: I can give you the link, but I can't get you behind the paywall, unfortunately. http://www.economist.com/finance/displaystory.cfm?story_id=10024733 http://www.economist.com/finance/displaystory.cfm?story_id=1...

anamax 17y ago
> As far as I understand it, the estate tax is meant as a counter to the idle rich. It's also only applied to very large amounts of money and, perhaps more relevantly, to the transfer of that wealth. Since it doesn't do that, why would you think that it is intended to do so? Yes, I know how it's promoted, but look at the reality. The truely big estates aren't subject to estate tax and never will be. As a general rule, when someone says "this will affect the wealthy in a bad way", they're either lying to you or completely clueless.
- Locke1689 17y ago
  I'm confused to your point, besides a general helplessness.
  - anamax 17y ago
    > I'm confused to your point, besides a general helplessness. It's not helplessness. It's an awareness of how the world works. (Related example, regulatory capture is as solid a law as gravity. It is foolish to act as if it doesn't exist, even if your scheme won't do what you want if it does.) There aren't that many "really rich" people, but they can apply tremendous pressure, have a lot of resources, and are highly motivated. The folks down a rung or two don't have those advantages. As a result, they're the ones who get hit, mostly because they're hittable but also because their collective wealth is much larger than that of the "really big money" folks.
- ShabbyDoo 17y ago
  >The truely big estates aren't subject to estate tax and never will be. Huh? Do you mean that very wealthy people are able to pay for tax shelter strategies but those with, say, only a few million will end up getting taxed?
  - anamax 17y ago
    > Do you mean that very wealthy people are able to pay for tax shelter strategies but those with, say, only a few million will end up getting taxed? That's one way. Another way is that such estates can be structured so they aren't owned by someone who dies. Or, they're owned in a friendly jurisdiction. And so on.

walkon 17y ago

If the federal government was truly concerned about a "concentration of power," then why isn't it concerned with itself? It is the most powerful entity on the planet, exercising coercion and destruction on a massive scale. Taxing people's estates at death on money that's already been taxed is preposterous. This is an example of the government using coercion to raise money for itself and nothing more. This is the type power one should be concerned about.

hassing 17y ago
It's really not that strange that inheritance is taxed. People get emotional about it because of death is involved. But in the end it's a matter of money changing hands - even if one of them is cold.
- nazgulnarsil 17y ago
  people get emotional about it because making your childrens' lives better is one of the fundamental human motivations for collecting resources.
  - hassing 17y ago
    That might be. But that still doesn't change the fact that your children aren't you. If you're hire your son or daughter to work for you then they still have to pay taxes. I don't like taxes anymore than the next guy. I just don't like the idea that Mr. X should be better of than Mr. Y because Mr. X's grand parents where more successful. You should be able to provide for your children, but it should not excuse them from participating in society themselves.
    - dantheman 17y ago
      Mr. X will be better off then Mr. Y because his grand parents were concerned with his education, were able to provide guidance, had influence, were well respected, etc. Why do we allow all other forms of inequality than money?
    - 17y ago