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I think spending money on your children shouldn't be culled. There's a good amount of benefit to society in entrepreneurs investing fiscally in their families.

I think spending money on your children shouldn't be culled. There's a good amount of benefit to society in entrepreneurs investing fiscally in their families. Sure, it might not be fair from a cosmic level, but creating new businesses and expanding the private sector is better than feeding the bloated government bureaucracies. This is especially true because the social bonds and exchange of values and information that happen between someone who is successful and their family is more likely to be successful than the average person. In other words, while it might seem like nepotism from an outward perspective, it could be merit in actuality. Instead, I'd support very high luxury taxes. Tax heavily lavish private jets, yachts, and mansions. These are the types of goods that will rapidly drain the funds of a rich trust fund kid who offers little to society. Don't take their startup investment.

deleted 7y ago
[deleted]
ip26 7y ago
A wealth tax doesn't prevent spending money on your children, it attenuates it. For a toy example, imagine a logarithmic estate tax. If you make ten times as much as everybody else, you can give your kids twice as much as everybody else. You're still giving them a big leg up, but for the dynasty to continue they have to make something of themselves.
- gnicholas 7y ago
  A wealth tax encourages spending, for example on private school tuition, SAT tutors, and other things that can help your kids. It only hits the money/assets you have left at the end of the year. It's also likely unconstitutional in the US (despite being backed by an HLS professor, who you'd think would know better). Andrew Yang is backing a heavy consumption tax, which would be used to give cash to all adult Americans. This would have the opposite effect, since it would encourage savings over spending.
  - arcticbull 7y ago
    To my knowledge just giving people who need it money doesn’t encourage them to save it, but rather to spend it on what they need, which actually stimulates the economy. This is far more beneficial than leaving it as idle capital or in a savings account.
    - gnicholas 7y ago
      You're right that the propensity to spend is higher among low-earners, so if you're trying to stimulate the economy it makes sense to allocate there (all other things equal). But my point was about the futility of trying to use a wealth tax to cut down on generational transfers of wealth/advantage. If you tax wealth, that encourages people to spend instead of save. And if their concern is keeping their family in the top 5%, 1%, or .1%, there are plenty of ways for them to spend it in order to achieve that end.
      - deleted 7y ago
        [deleted]
mikepurvis 7y ago
"... better than feeding the bloated government bureaucracies." I think this is probably the core of most of these disagreements. If you approach taxation with the assumption that it's mostly just money going to waste, then yeah, you're not going to be very supportive of taxation, especially high tax rates for high income, high net-worth people. But even if you come at it from that point of view, it has to be acknowledged that there are certain kinds of services which are almost impossible to deliver other than via the government. The private sector will not give you healthcare for all, or any meaningful mass transit (much less HSR), or properly maintained roads and bridges, or a military, or any of a thousand other things that your multiple levels of government spend money on. Yes there is some waste due to corruption or bad decisions, but for most people that is an accepted cost to getting the services that can't be had any other way.
- tomp 7y ago
  But most taxation does go to waste... if we define "waste" as "whatever elected officials fancy". It's fairly easy to devise a system where taxation is fair (or at least more fair), e.g. by having "pots" - e.g. tax sugar drinks, but that tax revenue goes into the healthcare pot and can be used only for that purpose. If the ostensible reason for taxing rich people is "more equality", then that money should go into the "helping poor people" pot and be used only for that purpose (scholarships, financial aid / basic income, etc.). Obviously, there's a reason politicians don't want to do that... because that would mean they no longer have control over money and can't spend/waste it as they want.
  - mikepurvis 7y ago
    I don't really agree. There's a lot of value in having general revenue that can be directed toward the needs and priorities of the day— making these decisions is what our elected officials are there for. Especially when you consider the kinds of broad benefits that certain policies can have— for example, consider the billions needed for something like a new rapid transit line. Where should that come from, given that it offers mobility to people without cars, stimulates construction and job growth along the line, etc? It has a lot of broad-reaching benefits and knock-on effects that are hard to even completely quantify (think stuff like public health impacts due to air quality improvement and people making short walks to the station a part of their daily trips). The other issue with the pots system is that it can give people a false sense of entitlement about things which benefit them. For example, consider the commonly-held belief that gas taxes pay for all road and highway infrastructure, and that roads and bridges wouldn't be falling apart if the government would stop "raiding" the gas tax pot to pay for other things. This is trivially googleable as untrue, but the pervasiveness of this belief blinds motorists to the reality of how much their preferred mode of transport is subsidized. So people in this mindset approach a discussion about something like subsidized train fare and it's hard for them understand why it's a good deal for society.

deleted 7y ago

[deleted]

ip26 7y ago

A wealth tax doesn't prevent spending money on your children, it attenuates it. For a toy example, imagine a logarithmic estate tax. If you make ten times as much as everybody else, you can give your kids twice as much as everybody else. You're still giving them a big leg up, but for the dynasty to continue they have to make something of themselves.

gnicholas 7y ago
A wealth tax encourages spending, for example on private school tuition, SAT tutors, and other things that can help your kids. It only hits the money/assets you have left at the end of the year. It's also likely unconstitutional in the US (despite being backed by an HLS professor, who you'd think would know better). Andrew Yang is backing a heavy consumption tax, which would be used to give cash to all adult Americans. This would have the opposite effect, since it would encourage savings over spending.
- arcticbull 7y ago
  To my knowledge just giving people who need it money doesn’t encourage them to save it, but rather to spend it on what they need, which actually stimulates the economy. This is far more beneficial than leaving it as idle capital or in a savings account.
  - gnicholas 7y ago
    You're right that the propensity to spend is higher among low-earners, so if you're trying to stimulate the economy it makes sense to allocate there (all other things equal). But my point was about the futility of trying to use a wealth tax to cut down on generational transfers of wealth/advantage. If you tax wealth, that encourages people to spend instead of save. And if their concern is keeping their family in the top 5%, 1%, or .1%, there are plenty of ways for them to spend it in order to achieve that end.
    - deleted 7y ago
      [deleted]

mikepurvis 7y ago

"... better than feeding the bloated government bureaucracies." I think this is probably the core of most of these disagreements. If you approach taxation with the assumption that it's mostly just money going to waste, then yeah, you're not going to be very supportive of taxation, especially high tax rates for high income, high net-worth people. But even if you come at it from that point of view, it has to be acknowledged that there are certain kinds of services which are almost impossible to deliver other than via the government. The private sector will not give you healthcare for all, or any meaningful mass transit (much less HSR), or properly maintained roads and bridges, or a military, or any of a thousand other things that your multiple levels of government spend money on. Yes there is some waste due to corruption or bad decisions, but for most people that is an accepted cost to getting the services that can't be had any other way.

tomp 7y ago
But most taxation does go to waste... if we define "waste" as "whatever elected officials fancy". It's fairly easy to devise a system where taxation is fair (or at least more fair), e.g. by having "pots" - e.g. tax sugar drinks, but that tax revenue goes into the healthcare pot and can be used only for that purpose. If the ostensible reason for taxing rich people is "more equality", then that money should go into the "helping poor people" pot and be used only for that purpose (scholarships, financial aid / basic income, etc.). Obviously, there's a reason politicians don't want to do that... because that would mean they no longer have control over money and can't spend/waste it as they want.
- mikepurvis 7y ago
  I don't really agree. There's a lot of value in having general revenue that can be directed toward the needs and priorities of the day— making these decisions is what our elected officials are there for. Especially when you consider the kinds of broad benefits that certain policies can have— for example, consider the billions needed for something like a new rapid transit line. Where should that come from, given that it offers mobility to people without cars, stimulates construction and job growth along the line, etc? It has a lot of broad-reaching benefits and knock-on effects that are hard to even completely quantify (think stuff like public health impacts due to air quality improvement and people making short walks to the station a part of their daily trips). The other issue with the pots system is that it can give people a false sense of entitlement about things which benefit them. For example, consider the commonly-held belief that gas taxes pay for all road and highway infrastructure, and that roads and bridges wouldn't be falling apart if the government would stop "raiding" the gas tax pot to pay for other things. This is trivially googleable as untrue, but the pervasiveness of this belief blinds motorists to the reality of how much their preferred mode of transport is subsidized. So people in this mindset approach a discussion about something like subsidized train fare and it's hard for them understand why it's a good deal for society.