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I've never understood why people think that just because, e.g., their parents created a business worth millions of dollars, they should get that for free.
by dhosek 6y ago
I've never understood why people think that just because, e.g., their parents created a business worth millions of dollars, they should get that for free.
- jokit 6y agoYour position is that everyone but the family of those who built wealth should "get it for free"?
- soccerdave 6y agoI've never understood why the government thinks that just because someone has died, they deserve 40+% of money that has already been taxed.
- wrren 6y agoBecause we live in a society.
- rs999gti 6y agoWhat the government gives it must first take away
- happytoexplain 6y agoThis is a poor argument - it contains no distinction from any taxed transaction. All money changing hands has "already been taxed" in the way you are using the phrase. Unless you are saying that all tax is wrong, in which case you should definitely make that argument rather than this much more specific one.
- jnwatson 6y agoIt isn't about "deserving" anything. The societal problems behind inter-generational wealth are wide and deep. This was recognized by the founders of the US, in particular Thomas Jefferson. Adam Smith: "There is no point more difficult to account for than the right we conceive men to have to dispose of their goods after death." This is taxation for policy reasons, not income.
- happytoexplain 6y agoThis starts with an excellent point - many bad, emotionally-driven arguments about how society works are predicated on the concept of "deserving". Bad people "deserve" to suffer in prison. Good people "deserve" every penny they make. The arguments rarely bother to go beyond those assumptions. The concept of "deserving" is real and important, but it's also commonly the linch pin of bad-faith arguments.
- disposekinetics 6y agoThe purpose of taxes is to fund the budget. This feels like back door social engineering.
- jacobush 6y agoIt's front door social engineering. See also tobacco and alcohol.
- supergarfield 6y agoThere are other purposes for taxes, the most famous one being Pigovian taxes, which attempt to price negative externalities into a market: https://en.wikipedia.org/wiki/Pigovian_tax https://en.wikipedia.org/wiki/Pigovian_tax. The inheritance tax is not a Pigovian tax, but its purpose can also be primarily non-budgetary.
- maerF0x0 6y agoThis is creating a false narrative that the only way to economic mobility is through theft upon generational transfer. It conveys a message of helplessness rather than rewarding usefulness and it's a vicious cycle. Economic mobility should be solely predicated on the expression of competence/ability in the pursuit of providing value to others in your society. It's not even that hard[1]. Get an education and a job, avoid the big economic sinks. > This means that 40 percent of why some Americans are extraordinarily well off has nothing to do with smarts, hard work, frugality, lucky gambles or entrepreneurial ingenuity. It is simply because they were born to rich parents. We should not fear the money landing in undeserving hands, it will rapidly be drained away if that is the case. Many(most?) very wealthy families employ wealth managers that ensure that money is profitably engaged with the society anyways, so in reality the money is not really in the heir's hands anyways, but is tied up in companies that are serving the country and employing others. [1]: https://www.brookings.edu/opinions/three-simple-rules-poor-teens-should-follow-to-join-the-middle-class/ https://www.brookings.edu/opinions/three-simple-rules-poor-t...
- metzby 6y agoLots of the money hasn't been taxed. If you owned stock for decades but never sold it, it wouldn't have been taxed.
- beamatronic 6y agoThe money that was used to purchase the stock originally was probably post-tax dollars
- oplav 6y agoAre you suggesting that capital gains taxes on stock sales are also wrong because the stock was purchased with post-tax dollars?
- parineum 6y agoAnd you aren't taxed that amount when you sell it, you're only taxed the profits.
- jakelazaroff 6y agoUnless it’s stock in e.g. a 401k or IRA.
- saalweachter 6y agoThey money I used to buy a candy bar is post-tax dollars dollars, but I still pay sales tax on it. They money I use to pay for a taxi ride are post-tax dollars, but the taxi driver still pays income tax on it. When I sell that stock I bought with post-tax dollars, I still pay capital gain taxes on the profits. Post-tax dollars aren't magical things that mean you never pay taxes again. They're just an accounting tool that makes dealing with some tax-exempt activities easier.
- bobbytherobot 6y agoYou pay taxes on the gains. (Unless you purchases them through a Roth 401K/IRA where you don't, but those have tight limits on it.)
- simfoo 6y agoIn fact I think the government has all the rights to take all belongings after someone dies. After all the person earned it from society, not its descendants.
- robdachshund 6y agoYou wouldn't have that opinion if you worked hard and achieved any sort of success in life You have a right to your own property. This isn't communism.
- noja 6y agoIf you read the article it will help: "Some will argue that this example ignores any income and payroll tax the wealthy parents paid when they originally earned the $50 million. But if the couple paid their personal chef’s wages out of after-tax income, we wouldn’t think their personal chef should get credit for the taxes they paid. Similarly, we should ignore any income or payroll tax the couple paid when considering how much their son should contribute to the costs of government."
- elric 6y agoI'll give you the benefit of the doubt and answer the question honestly. Assuming we're talking about a country where "The Government" is pretty well behaved, said government doesn't put that money in its pockets. It makes it work for the people it represents. Working for your money and becoming filthy rich is fine. But when you die, you die. None of that money is yours anymore, because you no longer exist. We, as a society, are free to decide what we do with what's left of you and your belongings. In an ideal world, we can use that to better the lives of others. Unless you were a truly stingy person in life, your affluence will have already have had huge positive impacts on those near and dear to you. Once you're dead, why should they be any more important than any other person?
- valuearb 6y agoHow does government pork benefit me? Other than burying me in taxes and my children in debt?
- richwater 6y ago> None of that money is yours anymore, because you no longer exist. We, as a society, are free to decide with what's left of you and your belongings. This is absolutely absurd. Your belongings and wealth belong to your estate and as the owner of it you decide how it should be distributed. All your doing is using your disdain of wealthy people to advocate theft. > Once you're dead, why should they be any more important than any other person? Because it's none of your business. Why on earth are you vilifying people for wanting to pass down their hard-earned money to their children?
- happytoexplain 6y ago>absolutely absurd. >disdain of wealthy people >advocate theft. >none of your business >vilifying people for wanting to pass down their hard-earned money In the context of the comment you're replying to, none of this is reasonable, and some of it isn't even relevant. You should consider that you're forming an emotional, hostile argument.
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- choeger 6y agoIt's not just the money. Imagine real estate. Today's value might be completely out of the owners. Say granny wants you to inherit their old penthouse in downtown New York (just an example, I have no idea if it is technically possible to own such a thing) or any other real estate that they used for living and is now worth tens of millions. The government won't let you have it. Or Grandpa's old company. It makes a little profit but was always in the hands of the family and it is now evaluated for tens of millions. Government forces you to sell it. I could go on. Art collection, old cars, even immaterial rights or stocks that are massively undervalued right now for one reason or another (for instance because the founder just died suddenly). Inheritance taxation is inherently unjust because it cannot distinguish between goods that are easily traded for and the ones that cannot easily be sold.
- bobbytherobot 6y agoThe government doesn't tax anyone who dies. They tax the estate of the wealthy. Few people will be affected by it. There is plenty more you can read on the topic. The general idea is that it helps create a meritocratic society.
- whytaka 6y agoBecause dynastic wealth is unearned and aggravates unequal circumstances of birth and accumulates capital in less competitive markets thus delegitimizing the purported meritocracy that is capitalism.
- munificent 6y agoTax money must come from somewhere. Imagine this as a zero-sum game where you have some fixed total amount of taxation that you're trying to reach and the question is just who pays how much. Given that, is there anyone who could possibly need their money less than the dead?
- rs999gti 6y ago> I've never understood why people think that just because, e.g., their parents created a business worth millions of dollars, they should get that for free. None of your business?
- lazyjones 6y agoThere is no point in building wealth or a family business other than to ensure your family will benefit from it when you're gone. Sure, childless young people with no perspective don't understand this mindset of intergenerational family businesses.
- happytoexplain 6y agoThis makes no sense. There is also no point in starting a (for profit) business except to make profit. Neither inheritance nor profit are eliminated by taxes - they are reduced.
- cjlars 6y agoFor assets not taking advantage of the step up basis in New York (e.g. small business profits) the tax rate would be ~50% federal and state in the year earned, plus 56% federal and state when you pass. That's an overall rate of 78%... I'm not sure "reduced" is the right word here.
- ceejayoz 6y ago> There is no point in building wealth or a family business other than to ensure your family will benefit from it when you're gone. Sure there is. They'd still get to keep the majority of it.
- AdamN 6y agoThe only reason you think long term is for your children and not their wider community or society?
- lazyjones 6y agoCommunity and society tax me for everything I do, eat or drink, all my life. Wealthier people already contribute more per capita than most other people, while getting the same benefits. What's the rationale for feeling obliged to contribute even more? Survivor's guilt?
- phone8675309 6y ago
- SkyBelow 6y agoBut that isn't the argument being presented because if the parents don't will it to the children, then no one thinks the children should get it (well, a few such children might and may legally challenge the will, but that is a very small minority opinion). The actual argument is that, having paid the taxes, the ones who own the business should be able to do with it as they wish including giving it away on death. At the core is a basic question of how should taxes work. Should you pay them up front when you get money, at the end of your life when you die, all throughout depending upon your wealth (such as property tax)? Each of these has positives and negatives associated with them, which is part of a larger discussion on how taxes should work.
- elric 6y agoIndeed. This enhances generational affluence and generational poverty. It's understandable that (grand)parents want to do right by their (grand)kids, and leaving them a pretty penny is a pretty thoughtful thing to do. But when this then has huge negative effects on society, it stops being a nice thing to do. Inherit for free up to a certain amount. Redistribute the rest.
- FriendlyNormie 6y ago>Redistribute There’s a special bullet just for you.
- Shivetya 6y agotl;dr the same logic that people use to justify taking more of an inheritance also is applicable against anyone having that much wealth in the first place Because it is their parent's wealth to do with as they please? Why does death suddenly mean all or some of what you have worked for now belongs to the state? Why do the rules change when it comes to children of an estate compared to a spouse? That spouse could be there as little as a few months by the way law works. It has been taxed as it was earned and accumulated. When it gets spent it will be taxed as well. If it is the transfer of investments they will be taxed when the recipient uses them. It is private property and we need to stop with the jealously angle being the primary motive of voiding that right. Oh I know, some will fire back with fairness well if it is not fair for the child of a person to receive their wealth in death how was it ever fair for the person to have it in the first place? Got to love that article, lamenting that the funds about twenty three million are ONLY taxed at forty percent. Seriously why are they taxed at all.
- hummo56 6y agoThis is one of the questions whose answer is not immediately obvious if you think only one step. If you generalize this in a society, riches will accumulate further over subsequent generations because it is easier to make money if you have money. Even if you are. It that skilled, your financial advisors will just turn your money into more money. As a result, the split between poor and rich will widen and widen. Until at some point, where the situation will implode or be unfavorable in some significant way. Hence, to have a stable system, the limitless accumulation of wealth should be reduced. There should be inheritance, of course, and half of few million is still lot. However, this requires some progressively adapting tax percentages, based on the amount of inherited wealth.
- kingraoul3 6y ago“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” ― Upton Sinclair “Men sooner forget the death of their father than the loss of their patrimony” ― Niccolò Machiavelli
- zip1234 6y agoIf someone decides to give you a bunch of money that they have earned and paid taxes on, should they be able to?
- willturman 6y agoAbsolutely, and it should be taxed as unearned income for the recipient above some reasonable level - perhaps the median per household annual income.
- bhupy 6y agoWhile I generally agree that we ought to have an inheritance tax, I want to push back on this because I think it's a poor argument in favor of inheritance taxes. The question is never about what the children think they deserve, it's entirely about what we as human beings work for. Most parents don't care about their own consumption, and instead work entirely for the well-being of their children. It doesn't matter what the children think. The argument is that it matters what the owner of that wealth thinks should happen to their own wealth, and that nuclear family values are deeply entrenched in society. There are a number of arguments that you can make that the cost of inter-generational wealth and the benefits of taxing it far outweigh the familial considerations of wealth transfer (especially after a high enough dollar amount). But THOSE are the arguments that we need to be making.
- odshoifsdhfs 6y agoI work more time nowadays, to the tune for 70 billable hours per week (and generate more tax revenue to my country as I both get more revenue and my tax bracket increases) so I can give a better life for my kid, and if something happens, he will face no difficulties. If I knew he would not get it, or would get less than half of my savings/everything else, I would not work a single hour above what we need currently to live as we do, taking decreasing tax revenue for my country. Maybe I am biased as I also am set to receive some money when my parents die, but my grandfather immigrated, worked his ass off, built savings, returned here, started a business, built properties, my father inherited it, and works hard to keep them well so I inherit them, which I will do the same for my kid. What would be the point of my grandfather sacrificing a lot of his life away from his home if not to build a better future for his future generations?
- AdamN 6y agoCan you give real numbers? How much are you currently expecting your kids to receive post-tax after your death under existing regulations? How much would it be under the proposals?
- odshoifsdhfs 6y agoI am not American so I don't know the proposals. In my country, assuming current market situation, he would get close to a million and a half, close to a 200-300k will probably be for taxes. (not sure of the exact numbers as I am not up to date with all the little taxes you pay). For you to have an idea, Currently, for every euro I get, I pay in taxes+social security+etc(all the little taxes around everything) around 60% of the money to the government.
- sergiotapia 6y agoI don't understand why you think the government should double dip into other peoples hard earned money. If I work hard it's for my kids and family, period.
- chasd00 6y agoi'm glad there's at least a handful of comments like this. I'm watching my 8 year old through the window while on a conference call discussing raising KPIs for myself and my team yet again. If I'm able to leave some money for my kids and save them from the grind i've spent the best years of my life enduring I don't see how the government has any right to one penny.
- jacobush 6y agoYou can't "hard earn" billions. Others must do it for you.
- mensetmanusman 6y agoTrue, you can’t dig a trench valuable enough with kW/hr output to generate a billion dollars in value. You can, however, come up with an idea that improves the lives of 1 billion people by $10 worth. It turns out that ideas are more important to improving the state of humanity than kW/hr output of hard work. You may be arguing that being one of the billions whose life was improved by $10 is ‘others doing it for you’
- beamatronic 6y agoBecause they spent their entire life sacrificing for their children's benefit. They poured blood, sweat, and tears into their business. The parents presumably followed the laws and paid all the taxes they were legally obligated to pay.
- robdachshund 6y agoBecause its already been taxed and it was willed or passed down to them?