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1) It's your money. You should be free to decide what to do with it. 2) If you can't decide what to do with your money, you have less incentive to work hard fo
by pzone 9y ago
1) It's your money. You should be free to decide what to do with it.
2) If you can't decide what to do with your money, you have less incentive to work hard for it.
3) If your choice is either to spend your money frivolously or have it expropriated, you'll spend it frivolously.
4) Distorting savings and investment decisions is one of the most damaging forms of taxation. A tax on inherited wealth is a tax on savings.
5) It's very difficult to write down a theoretical utilitarian welfare model that suggests an estate tax is a good idea. (It's easy to write a model where inheritances are optimally subsidized.)
- platz 9y ago> It's your money. You should be free to decide what to do with it. What about the money that I earn via direct income? Why don't I have a right to all of that as well, considering the payroll tax or income tax? Surely the government has no right to confiscate the direct value I know I've created.
- pzone 9y agoOkay, the way I've stated it applies equally well to all taxes and doesn't specify why the estate tax is especially bad. How about this: it's a form of multiple taxation. You pay income taxes when you earn the money. You pay taxes when you bequeath it to your children. Your children pay VAT taxes when they finally spend it. It's inefficient and unnecessary.
- dragonwriter 9y agoThat, again, doesn't explain anything special about the estate tax (it's also inaccurate in the US, which has no generally applicable VAT). Sure, you can (in a particularly useless way) view any transfer tax as “multiple taxation” on the theory that the money will later go through some other taxed transfer, but that doesn't actually provide a coherent argument as to why a particular transfer, such as inheritance, is especially improper to tax.
- dllthomas 9y agoOne thing that occurred to me about the estate tax is that, to the degree that we can view it as a tax on wealth, the rate may differ quite a bit by demographic. I haven't looked at the numbers (it's not death rates alone, but death rates amongst those wealthy enough to be impacted by the estate tax, which is harder to get at) but that feels like it might be improper.
- chimeracoder 9y ago> it's also inaccurate in the US, which has no generally applicable VAT) All but four states in the US have a general sales tax
- dragonwriter 9y agoSales tax is not VAT, and even what in the US is called a “general” sales tax applied to a far more limited set of end products than a VAT would usually apply to.
- chimeracoder 9y ago> Sales tax is not VAT From an economic standpoint, yes, a sales tax literally is identical to VAT. The difference is in the point at which the payment is collected; the incidence of the tax is absolutely identical. > even what in the US is called a “general” sales tax applied to a far more limited set of end products than a VAT would usually apply to. That's really not true at all.
- ianburrell 9y ago"You pay taxes when you bequeath it to your children." That is the estate tax. If don't have estate tax, then capital gains are never taxed. Currently, the tax basis for capital gains is stepped up to current value when inherited. It would be reasonable to not require capital to be sold to pay estate tax. That could be accomplished by not resetting the basis on inheritance.
- thescribe 9y agoWhat about use taxes? Given it is a voluntary exchange, the government has the right to it, right?