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Really bad idea. That would encourage people to consume wealth over 5 to 10 million during their lifetimes, i.e. destroy real wealth, instead of investing it in

Really bad idea. That would encourage people to consume wealth over 5 to 10 million during their lifetimes, i.e. destroy real wealth, instead of investing it in productive enterprises, i.e. building real wealth. You want a situation where wealthy people build a lot more wealth than they consume. The last thing you want is for them to consume their wealth, making themselves better off but the society overall much, much poorer.

jessaustin 8y ago
Lots of rich people madly spending their wealth would be great for GDP. The luxury industries would prosper, and those who work in those industries would also accumulate wealth to spend madly. Those who truly have a vision for improving the world would still get to do that. Or, maybe... if there were less of an advantage to accumulating wealth, we wouldn't destroy ourselves and the environment quite so madly while doing so. Great fortunes would not be generated, because what would the point be? ISTM that a rich person who doesn't want her estate to be confiscated upon her death could just divide it among many heirs? If the progressive tax is not levied on the heir rather than the estate, then maybe it should be. Intentional division would destroy dynastic family wealth without wasting it on the frivolous spending of the state.
- agent008t 8y ago
  1. GDP is not a great measure. If a rich person consumes capital by buying a yacht and then burning it, the world is now poorer - resources (human and material) went into building the yacht, and now they are gone. Wealth has been consumed, yet GDP showed an increase. 2. If the world is poorer, it will be able to afford to protect the environment less, not more. The wealthier a nation, or a neighbourhood is, the more it cares about protecting its local environment. For example, as China gets wealthier, it cares more about having cleaner air. 3. Wealth concentration in the right hands is not necessarily a bad thing. Increasing taxation is just concentrating more wealth in the hands of parliaments/governments, which they are unlikely to spend too effectively given that they are spending someone else's money, but yet which still results in some great outcomes (scientific advancements, until recently space flight etc.). Wealth concentration means that great leaps forward can happen in areas that at first are going to be very expensive (medical/longevity research, grand projects like SpaceX, even originally mobile phones etc.) If you want to tax anything, it is probably better to tax (frivolous) consumption, i.e. wealth destruction, instead of wealth creation.
  - jessaustin 8y ago
    If you want to tax anything, it is probably better to tax (frivolous) consumption, i.e. wealth destruction, instead of wealth creation. Sure, I agree, but we're talking about estate tax ITT. It's nice to imagine that switching from income taxes to VAT (with appropriate progressive adjustments for the poor) would allow the merely hardworking rather than just the lucky and unscrupulous to accumulate wealth, but it's not clear that would be the case.
dragonwriter 8y ago
> That would encourage people to consume wealth over 5 to 10 million during their lifetimes, No, it would encourage people to conceal wealth transfers as consumptive spending. (Just like existing dedicated wealth transfer taxes—gift and estate taxes—do, but more strongly, and we've seen what people dedicated to transferring wealth, like Fred Trump, already do.)
- agent008t 8y ago
  Of course - people will try to avoid the tax. I was talking about what would happen if the tax functioned as intended.

jessaustin 8y ago

Lots of rich people madly spending their wealth would be great for GDP. The luxury industries would prosper, and those who work in those industries would also accumulate wealth to spend madly. Those who truly have a vision for improving the world would still get to do that. Or, maybe... if there were less of an advantage to accumulating wealth, we wouldn't destroy ourselves and the environment quite so madly while doing so. Great fortunes would not be generated, because what would the point be? ISTM that a rich person who doesn't want her estate to be confiscated upon her death could just divide it among many heirs? If the progressive tax is not levied on the heir rather than the estate, then maybe it should be. Intentional division would destroy dynastic family wealth without wasting it on the frivolous spending of the state.

agent008t 8y ago
1. GDP is not a great measure. If a rich person consumes capital by buying a yacht and then burning it, the world is now poorer - resources (human and material) went into building the yacht, and now they are gone. Wealth has been consumed, yet GDP showed an increase. 2. If the world is poorer, it will be able to afford to protect the environment less, not more. The wealthier a nation, or a neighbourhood is, the more it cares about protecting its local environment. For example, as China gets wealthier, it cares more about having cleaner air. 3. Wealth concentration in the right hands is not necessarily a bad thing. Increasing taxation is just concentrating more wealth in the hands of parliaments/governments, which they are unlikely to spend too effectively given that they are spending someone else's money, but yet which still results in some great outcomes (scientific advancements, until recently space flight etc.). Wealth concentration means that great leaps forward can happen in areas that at first are going to be very expensive (medical/longevity research, grand projects like SpaceX, even originally mobile phones etc.) If you want to tax anything, it is probably better to tax (frivolous) consumption, i.e. wealth destruction, instead of wealth creation.
- jessaustin 8y ago
  If you want to tax anything, it is probably better to tax (frivolous) consumption, i.e. wealth destruction, instead of wealth creation. Sure, I agree, but we're talking about estate tax ITT. It's nice to imagine that switching from income taxes to VAT (with appropriate progressive adjustments for the poor) would allow the merely hardworking rather than just the lucky and unscrupulous to accumulate wealth, but it's not clear that would be the case.

dragonwriter 8y ago

> That would encourage people to consume wealth over 5 to 10 million during their lifetimes, No, it would encourage people to conceal wealth transfers as consumptive spending. (Just like existing dedicated wealth transfer taxes—gift and estate taxes—do, but more strongly, and we've seen what people dedicated to transferring wealth, like Fred Trump, already do.)

agent008t 8y ago
Of course - people will try to avoid the tax. I was talking about what would happen if the tax functioned as intended.