7 ms·

They don't have to be. A "death tax" for example that takes 100% of a persons estate at death would be both simple, non distortive, and in terms of equality lev

by erentz 9y ago

They don't have to be. A "death tax" for example that takes 100% of a persons estate at death would be both simple, non distortive, and in terms of equality level the playing field every generation.

esarbe 9y ago
Why does this get down voted? Even if you don't agree with the idea; it has been proposed in a calm and reasonable manner. Care to explain?
- erentz 9y ago
  It's pretty hard to discuss such things without people getting emotional and defensive. I think people look at something like this and say "but that's not fair I earned all my money"[1]. They don't look at it and think about what the world would look like in such a scenario, how they might have lived differently, how they would instead spend their money before death (perhaps making the world a better place), or how they might have less concerns about needing to pass on money to their children because their children would be "just fine" in the society they created under this system. [1] ignoring the whole subject about luck and what it means to earn something when two equivalent folks just have different dice rolls go their way, etc. Or especially in the context what it means to earn something when you just inherited it. (I have a bunch of friends who have inheritance coming their way and just totally expect it, they lead very different lives because of that than those I know who don't have that.)
- humanrebar 9y ago
  It wouldn't actually work. Rich people end up finding loopholes to any tax scheme. Even if that loophole is expatriating. It would have negative consequences besides that. Many, many people do things for "legacy". It's a powerful motivator. Taking away all wealth would eliminate something that encourages good long-term decision making. It would hurt people who aren't the rich people. What would happen if Sam Walton's net worth was taxed when he died? Massive disruption to Walmart employees at a minimum. How would the net worth be calculated? Well, given his net worth, he'd be irresponsible not to have an army of lawyers and lobbyists making sure the number is as small as possible. So, given the above, the idea isn't that simple. Finally, there are ethical implications to that sort of policy. It implies that citizens earn at the pleasure of the government, not that the government rules by the consent of its citizens.
nnfy 9y ago
Yes, I look forward to being barred from sharing the wealth that I've accumulated with my children and other loved ones. Why should they have any advantage, right? After all, you probably think I didnt do anything myself, right? Who are you to make that decision for someone? And, frankly, you're delusional if you think an estate tax is non distortive. The entire meaning of wealth would change for the elderly. One cannot treat wealth like a zero sum game. More importantly, we need to rid ourselves of this growing crabs in a bucket mentality, because we all suffer when we hold society's best back. Is it "fair" in the sense of absolute wealth? No, but people shouldn't be so focused on their neighbor's plate then theirs is full enough that they can spend hours complaining online about how much more money the 1% have. Perhaps we should redefine fair wealth distribution to rightfully consider merit, which is shockingly absent from the majority view here.
- erentz 9y ago
  This thought experiment isn't about looking at your neighbors plate, it's about incentives for us as a society. I think the question to answer for yourself is whether you think everyone should start with a fair playing field or not and the implications such a tax would have on how you structure society to ensure that everyone gets the same shots at a good life.
  - nnfy 9y ago
    There is substantially more value for all of us in allowing more resources to be distributed to those who are able to do more with them. And your definition of "fair playing field" is skewed because, again, you treat economics as a zero sum game. You are making the classic mistake of conflating equality of outcome with equality of opportunity. In any case, this class warfare inspired policy of exhaustively taxing wealth won't fix a mismanaged budget or a broken scholarly culture. You are simply punishing the people who seem to have benefited most in the context of the system while ignoring merit. Further, it is absolutely absurd to suggest that modern people in poverty dont live "good" lives. They have refrigeration, air conditioning, entertainment, access to the internet, emergency healthcare, they live like kings once did. Once again this is a problem of looking at other peoples' lives and concluding that only in comparison you deserve more for simply existing. Taxation will not fix what is fundamentally a cultural problem. Aside: Look at how absurd the entire argument is! We dont question in absolute terms how our poor are living, we focus entirely on the fact that the wealth is distributed unevenly. Like children complaining that their classmates have extra candy. The whole mindset is petty.
Turing_Machine 9y ago
Hmm... wouldn't that just result in people transferring the assets to their heirs before they died?
- erentz 9y ago
  Could do. That might be captured sufficiently by the gift tax though. A bigger issue could be evasion through establishing trusts and the like.
  - humanrebar 9y ago
    Then you just donate the money to institutions your progeny would just happen to enjoy: your alma mater, the country club, private schools, etc. Segregation would still be maintained through astronomical real estate prices.
    - frgtpsswrdlame 9y ago
      Your position is that increasing the estate tax would do nothing to help segregation? Or that it wouldn't do enough and we should also do more?
      - humanrebar 9y ago
        I'm not confident enough to make a definite prediction, but it seems plausible that it could make some forms of inequality worse. Attempts to level out education, for example, have resulted in the truly wealthy finding other outlets (private schools, expensive zip codes) to create the educational experience they want for their children.
        frgtpsswrdlame 9y ago
        In education we never actually integrated though. A few locations were integrated but only for a little while. It seems more like that the truly wealthy found those outlets regardless of what else was happening in education. It also seems strange to say: we shouldn't tax rich people because somehow, through a plausible method that I can't explain or predict, it will make rich people better off and poor people worse off.
deleted 9y ago
[deleted]
mnglkhn2 9y ago
With the assumption that the State is the best ward for your money. Do you fully trust the State to be willing and able to stamp out inequality?
- frgtpsswrdlame 9y ago
  Why must we 'fully' trust the state? We just have to trust it more than the markets.
  - ams6110 9y ago
    States have killed many more people than markets have.
    - chipotle_coyote 9y ago
      This strikes me as too facile to be particularly useful. First, it's much easier to get a rough idea of how many people states have killed than markets, to be sure. But many wars are fought and nations are conquered (and, for that matter, created) for market-driven reasons: oil, tea, diamonds, slaves, to name a few egregious examples off the top of my head. Millions of people have died throughout history that would not have if states were not acting to protect, expand, or create markets. Second, while it's probably harder to get a rough idea of how many people states have saved than markets have, the number is not inconsequential. I certainly wouldn't suggest states are forces for unrequited good--there's copious valid criticism of them across the political spectrum--but I would suggest that they're hardly forces for unrequited evil, either.
  - mnglkhn2 9y ago
    We first need to know that the current taxes are fully spent on the right things and that the "pork" spending is not actually larger than the amount needed to satisfy the needs expressed by the current movement.
surfmike 9y ago
"Non distortive" You can't imagine a way a tax like that would change people's behavior? People would give their money to their children before they die, or spend it all on themselves, and maybe some would work less because they were previously motivated by building up assets to give to their children.
- dlp211 9y ago
  I never understand why someone working less is considered a bad thing. If a person works less that leaves a vacuum for their services which will then be filled by another market actor.
  - flyinglizard 9y ago
    On an individual level - correct. On a society level - not true anymore as you are reducing the effective size of the workforce.
  - surfmike 9y ago
    If you think the economy is a zero-sum game then it's not a bad thing. If you think wealth can be created and that society benefits from a population with a high labor force participation (like Scandinavia for instance), then it's a bad thing.
conanbatt 9y ago
Two arguments against a death tax: the inability to apply it, and the results of an effective one: In Argentina, the state collects a heft tax on property transfers when the propietor dies. So basically all property is donated from parents to children in-life. Poorer property owners that cant afford or dont know better, or people stricken with tragedy in an early death are likely the ones that pay the most of that tax. Conclusion, 'death taxes' are paid by the poorer half and hence worsens inequality. On results: lets say that I were to tell you that all the money in your bank account is going to be worth 0 tomorrow. Are you going to invest that money in long term capital growth? Are you going to donate it to the government? I'd say the most reasonable reaction is drugs and hookers all the way! The latter is definitely not great economic policy.
- frgtpsswrdlame 9y ago
  Actually forcing people to spend their money before death would be really good for the economy (despite you picking illegal activities for the negative connotation.) And the real solution isn't a 100% tax but 100% tax over some lower amount, say $50,000 along with lowering the yearly gift tax exemption. Inherited wealth is anathema to meritocracies.
  - conanbatt 9y ago
    > Actually forcing people to spend their money before death would be really good for the economy (despite you picking illegal activities for the negative connotation.) Well, this is were we clearly disagree. I am very certain that if i knew that i was going to die in 6 months, id be burning all my money into some kickass 6 months with "Burguers" and "Premium Tinder accounts". Consumption vs Investment is a core battle between Keynesian and Chicago School economics, so it depends on which you subscribe. > meritocracies. I actually do wonder who argues in favor of meritocracies. Sure as hell not liberal-economics. "Get what we deserve? I hope to god we don't get what we deserve" - Milton Friedman. > And the real solution isn't a 100% tax but 100% tax over some lower amount, say $50,000 along with lowering the yearly gift tax exemption. This just compromises the original concept of equality of opportunity: if you do that, anyone below 50k will be in an unfavourable position relatively. So what you did with that limit is imposing something on a group, intended to be a minority that wouldnt be able to repeal such rule. The fact that these rules end up like this has been extensively exposed by people like MF.

by erentz 9y ago

They don't have to be. A "death tax" for example that takes 100% of a persons estate at death would be both simple, non distortive, and in terms of equality level the playing field every generation.

esarbe 9y ago

Why does this get down voted? Even if you don't agree with the idea; it has been proposed in a calm and reasonable manner. Care to explain?

erentz 9y ago
It's pretty hard to discuss such things without people getting emotional and defensive. I think people look at something like this and say "but that's not fair I earned all my money"[1]. They don't look at it and think about what the world would look like in such a scenario, how they might have lived differently, how they would instead spend their money before death (perhaps making the world a better place), or how they might have less concerns about needing to pass on money to their children because their children would be "just fine" in the society they created under this system. [1] ignoring the whole subject about luck and what it means to earn something when two equivalent folks just have different dice rolls go their way, etc. Or especially in the context what it means to earn something when you just inherited it. (I have a bunch of friends who have inheritance coming their way and just totally expect it, they lead very different lives because of that than those I know who don't have that.)
humanrebar 9y ago
It wouldn't actually work. Rich people end up finding loopholes to any tax scheme. Even if that loophole is expatriating. It would have negative consequences besides that. Many, many people do things for "legacy". It's a powerful motivator. Taking away all wealth would eliminate something that encourages good long-term decision making. It would hurt people who aren't the rich people. What would happen if Sam Walton's net worth was taxed when he died? Massive disruption to Walmart employees at a minimum. How would the net worth be calculated? Well, given his net worth, he'd be irresponsible not to have an army of lawyers and lobbyists making sure the number is as small as possible. So, given the above, the idea isn't that simple. Finally, there are ethical implications to that sort of policy. It implies that citizens earn at the pleasure of the government, not that the government rules by the consent of its citizens.

nnfy 9y ago

Yes, I look forward to being barred from sharing the wealth that I've accumulated with my children and other loved ones. Why should they have any advantage, right? After all, you probably think I didnt do anything myself, right? Who are you to make that decision for someone? And, frankly, you're delusional if you think an estate tax is non distortive. The entire meaning of wealth would change for the elderly. One cannot treat wealth like a zero sum game. More importantly, we need to rid ourselves of this growing crabs in a bucket mentality, because we all suffer when we hold society's best back. Is it "fair" in the sense of absolute wealth? No, but people shouldn't be so focused on their neighbor's plate then theirs is full enough that they can spend hours complaining online about how much more money the 1% have. Perhaps we should redefine fair wealth distribution to rightfully consider merit, which is shockingly absent from the majority view here.

erentz 9y ago
This thought experiment isn't about looking at your neighbors plate, it's about incentives for us as a society. I think the question to answer for yourself is whether you think everyone should start with a fair playing field or not and the implications such a tax would have on how you structure society to ensure that everyone gets the same shots at a good life.
- nnfy 9y ago
  There is substantially more value for all of us in allowing more resources to be distributed to those who are able to do more with them. And your definition of "fair playing field" is skewed because, again, you treat economics as a zero sum game. You are making the classic mistake of conflating equality of outcome with equality of opportunity. In any case, this class warfare inspired policy of exhaustively taxing wealth won't fix a mismanaged budget or a broken scholarly culture. You are simply punishing the people who seem to have benefited most in the context of the system while ignoring merit. Further, it is absolutely absurd to suggest that modern people in poverty dont live "good" lives. They have refrigeration, air conditioning, entertainment, access to the internet, emergency healthcare, they live like kings once did. Once again this is a problem of looking at other peoples' lives and concluding that only in comparison you deserve more for simply existing. Taxation will not fix what is fundamentally a cultural problem. Aside: Look at how absurd the entire argument is! We dont question in absolute terms how our poor are living, we focus entirely on the fact that the wealth is distributed unevenly. Like children complaining that their classmates have extra candy. The whole mindset is petty.

Turing_Machine 9y ago

Hmm... wouldn't that just result in people transferring the assets to their heirs before they died?

erentz 9y ago
Could do. That might be captured sufficiently by the gift tax though. A bigger issue could be evasion through establishing trusts and the like.
- humanrebar 9y ago
  Then you just donate the money to institutions your progeny would just happen to enjoy: your alma mater, the country club, private schools, etc. Segregation would still be maintained through astronomical real estate prices.
  - frgtpsswrdlame 9y ago
    Your position is that increasing the estate tax would do nothing to help segregation? Or that it wouldn't do enough and we should also do more?
    - humanrebar 9y ago
      I'm not confident enough to make a definite prediction, but it seems plausible that it could make some forms of inequality worse. Attempts to level out education, for example, have resulted in the truly wealthy finding other outlets (private schools, expensive zip codes) to create the educational experience they want for their children.
      - frgtpsswrdlame 9y ago
        In education we never actually integrated though. A few locations were integrated but only for a little while. It seems more like that the truly wealthy found those outlets regardless of what else was happening in education. It also seems strange to say: we shouldn't tax rich people because somehow, through a plausible method that I can't explain or predict, it will make rich people better off and poor people worse off.

deleted 9y ago

[deleted]

mnglkhn2 9y ago

With the assumption that the State is the best ward for your money. Do you fully trust the State to be willing and able to stamp out inequality?

frgtpsswrdlame 9y ago
Why must we 'fully' trust the state? We just have to trust it more than the markets.
- ams6110 9y ago
  States have killed many more people than markets have.
  - chipotle_coyote 9y ago
    This strikes me as too facile to be particularly useful. First, it's much easier to get a rough idea of how many people states have killed than markets, to be sure. But many wars are fought and nations are conquered (and, for that matter, created) for market-driven reasons: oil, tea, diamonds, slaves, to name a few egregious examples off the top of my head. Millions of people have died throughout history that would not have if states were not acting to protect, expand, or create markets. Second, while it's probably harder to get a rough idea of how many people states have saved than markets have, the number is not inconsequential. I certainly wouldn't suggest states are forces for unrequited good--there's copious valid criticism of them across the political spectrum--but I would suggest that they're hardly forces for unrequited evil, either.
- mnglkhn2 9y ago
  We first need to know that the current taxes are fully spent on the right things and that the "pork" spending is not actually larger than the amount needed to satisfy the needs expressed by the current movement.

surfmike 9y ago

"Non distortive" You can't imagine a way a tax like that would change people's behavior? People would give their money to their children before they die, or spend it all on themselves, and maybe some would work less because they were previously motivated by building up assets to give to their children.

dlp211 9y ago
I never understand why someone working less is considered a bad thing. If a person works less that leaves a vacuum for their services which will then be filled by another market actor.
- flyinglizard 9y ago
  On an individual level - correct. On a society level - not true anymore as you are reducing the effective size of the workforce.
- surfmike 9y ago
  If you think the economy is a zero-sum game then it's not a bad thing. If you think wealth can be created and that society benefits from a population with a high labor force participation (like Scandinavia for instance), then it's a bad thing.

conanbatt 9y ago

Two arguments against a death tax: the inability to apply it, and the results of an effective one: In Argentina, the state collects a heft tax on property transfers when the propietor dies. So basically all property is donated from parents to children in-life. Poorer property owners that cant afford or dont know better, or people stricken with tragedy in an early death are likely the ones that pay the most of that tax. Conclusion, 'death taxes' are paid by the poorer half and hence worsens inequality. On results: lets say that I were to tell you that all the money in your bank account is going to be worth 0 tomorrow. Are you going to invest that money in long term capital growth? Are you going to donate it to the government? I'd say the most reasonable reaction is drugs and hookers all the way! The latter is definitely not great economic policy.

frgtpsswrdlame 9y ago
Actually forcing people to spend their money before death would be really good for the economy (despite you picking illegal activities for the negative connotation.) And the real solution isn't a 100% tax but 100% tax over some lower amount, say $50,000 along with lowering the yearly gift tax exemption. Inherited wealth is anathema to meritocracies.
- conanbatt 9y ago
  > Actually forcing people to spend their money before death would be really good for the economy (despite you picking illegal activities for the negative connotation.) Well, this is were we clearly disagree. I am very certain that if i knew that i was going to die in 6 months, id be burning all my money into some kickass 6 months with "Burguers" and "Premium Tinder accounts". Consumption vs Investment is a core battle between Keynesian and Chicago School economics, so it depends on which you subscribe. > meritocracies. I actually do wonder who argues in favor of meritocracies. Sure as hell not liberal-economics. "Get what we deserve? I hope to god we don't get what we deserve" - Milton Friedman. > And the real solution isn't a 100% tax but 100% tax over some lower amount, say $50,000 along with lowering the yearly gift tax exemption. This just compromises the original concept of equality of opportunity: if you do that, anyone below 50k will be in an unfavourable position relatively. So what you did with that limit is imposing something on a group, intended to be a minority that wouldnt be able to repeal such rule. The fact that these rules end up like this has been extensively exposed by people like MF.