5 ms·

The problem isn't really the billionaires, so much as they are the modern version of the king/feudal system because the wealth becomes hereditary. I'm pretty m

The problem isn't really the billionaires, so much as they are the modern version of the king/feudal system because the wealth becomes hereditary. I'm pretty much a believer that estate taxes should be 100% over some fixed threshold, say 5x the median wealth. And no, I don't feel bad about the "family farm" which turns out to be worth 50 million dollars.

mac01021 6y ago
Median household wealth in the US is less than $100k, so 5x would be half a million. So I guess the question is, do you feel bad about the family farm that turns out to be worth 1 or 2 million? ("No" is a legitimate answer, but probably a rather controversial one)
- labster 6y ago
  It seems like there ought to be a happy medium between taxing nearly all homes in California at 100% and the Prop 13 level of 1%/max 2% inflation.
loxs 6y ago
There are two reasons this is a very bad idea: 1. Who is going to take it? The government is a very bad guardian. Everyone from the former East Block can attest (me including). This literally happened here after 1944 and we still suffer the consequences. The political class became all-powerful as they controlled all the resources. 2. This will make people a lot less entrepreneurial and as a result - everyone will become a lot poorer. This also happened in my country between 1944 and 1989. Even the Chinese realised this can't and won't work and are currently heading in the opposite direction. Really, fantasy is a great thing, but you have to think about the consequences. The Western World is heading off a steep cliff with this kind of thinking.
- anoncake 6y ago
  1. Sell it, finance public services with the revenue, and lower other taxes. You don't have to be socialist and/or critical to market economies to support 100% OP's proposal. 2. I don't think "estate taxes were raised" is all that happened in the East Block.
  - loxs 6y ago
    1. Who is going to do it? Politicians? As it works here with the EU subsidies - 80% of the money goes through the PM's cousin's company and a hefty percentage leaks to offshore banks :) 2. Yeah, after they did that, people didn't want to work any more, so they had to force them :)
    - anoncake 6y ago
      I'm not interested in debating someone who thinks raising estate taxes is what ruined the East Block.
      - loxs 6y ago
        Enlighten me, what ruined it?
        brrt 6y ago
        I guess the incarceration rate would be a good candidate too
        hackyhacky 6y ago
        Totalitarian rule. Lack of democracy. Lack of freedom of speech. Constant surveillance. Integration of politics into every aspect of life. Economic exploitation by Russia. Intentional undermining of historical cultural identity. I could on.
        loxs 6y ago
        So you say that a government which takes (unwillingly) the inheritance of all its citizens can pull it off without a totalitarian approach, suppressing freedom of speech, constant surveillance (to figure out who has what) etc? I don't buy it :)
        anoncake 6y ago
        Yes, taxing people is not a totalitarian thing.
- hackyhacky 6y ago
  > The government is a very bad guardian. Everyone from the former East Block can attest (me including). So, you had a bad government, therefore all governments are bad? > This will make people a lot less entrepreneurial Do you think Jeff Bezos would have given up if he was able to become only a multi-millionaire, instead of a billionaire?
  - loxs 6y ago
    - Yeah, I know it wasn't real socialism. You will build the real one. - The OP says nothing about not allowing Bezos to become billionaire, only confiscating his wealth upon his death. Yeah, I think he would have given up in this case. And I don't only think, I can show it to you repeatedly in socialist countries. There is no "Bezos" there :)
- dragonwriter 6y ago
  > The government is a very bad guardian. Everyone from the former East Block can attest “I had an abusive parent” does not imply “In general, parents are bad guardians”. The same thing for governments. I'm not saying that there isn't a valid critique of government-as-guardian generally, but any such valid critique is going to be more involved than “governments of the Soviet Bloc were bad, so government is bad”.
  - loxs 6y ago
    Can you show one "non-abusive" government that confiscates people's properties? I fail to see one. And I see many proving the opposite.
    - hackyhacky 6y ago
      If you consider taxes to be a form of property confiscation, then all governments confiscate property, and therefore all governments are abusive. I don't think that's a very convincing argument against taxation.
imtringued 6y ago
People will just sell their possessions to the largest corporation around and then spend their remaining money on something wasteful. Others will try to find loopholes such as buying products from your daughter's company or simply smuggle their assets. Proposals like this also usually do not address what should be done with the tax revenue. It's almost guaranteed that it will be used for something that increases wealth inequality, because as it is right now that is the default state.
- deleted 6y ago
  [deleted]
jjeaff 6y ago
Interesting thing about the family farm anecdotes, supposedly, researchers have struggled to find even a single instance of a family farm getting broken up by estate taxes.
aeternum 6y ago
The trivial way around this is to start a non-profit, put all your net worth into it, then appoint your children/heirs as the sole execs. The children give part of the yield which still amounts to plenty of money without touching the principle, and use the non-profit as a limitless expense account to travel the world or curry favor as needed. All tax-free.
- javert 6y ago
  You can't actually give all your money to a non-profit and then spend it on yourself, so that won't work. I mean, you can, but if you get caught, which you almost certainly will, you will go to jail. Source: Ask any CPA.
  - aeternum 6y ago
    Of course you don't spend it all yourself, but if your parents put $1B in your non-profit you can pretty easily get a 5% ROI and safely spend 45 mil / year on actual donations and 5 mil / year on your 'business trips'.
    - javert 6y ago
      That would be fraud. It's not likely that you would get away with this.
      - dantheman 6y ago
        How is it fraud to have your corporate meetings in Hawaii, in the swiss alps, to have team building events that are ski trips etc. Academic conferences work this way - are they frauds?
        deleted 6y ago
        [deleted]
        javert 6y ago
        You could do that, but it doesn't achieve the goal that was being discussed. Spending money on trips is not a "ROI" (return on investment). Plus, if you spend $5M personally on trips, that will most likely be caught as fraudulent. Because it clearly is. The IRS looks at what charities spend their money on. Meta: I will try not to engage in these kinds of discussions on HN in the future since people have made it clear they don't want this information.
zaphirplane 6y ago
Selling assets to offspring for a $1 is as old as money To close all the simple loop holes and the complex ones is How do you distinguish between a retiree selling their home to live off the income vs selling it ti pass the money to their kid
- ValentineC 6y ago
  > Selling assets to offspring for a $1 is as old as money Some tax authorities frown on this, and require that transactions be conducted "at arm's length": https://en.wikipedia.org/wiki/Arm%27s_length_principle#Examples_in_contract_law https://en.wikipedia.org/wiki/Arm%27s_length_principle#Examp...

mac01021 6y ago

Median household wealth in the US is less than $100k, so 5x would be half a million. So I guess the question is, do you feel bad about the family farm that turns out to be worth 1 or 2 million? ("No" is a legitimate answer, but probably a rather controversial one)

labster 6y ago
It seems like there ought to be a happy medium between taxing nearly all homes in California at 100% and the Prop 13 level of 1%/max 2% inflation.

loxs 6y ago

There are two reasons this is a very bad idea: 1. Who is going to take it? The government is a very bad guardian. Everyone from the former East Block can attest (me including). This literally happened here after 1944 and we still suffer the consequences. The political class became all-powerful as they controlled all the resources. 2. This will make people a lot less entrepreneurial and as a result - everyone will become a lot poorer. This also happened in my country between 1944 and 1989. Even the Chinese realised this can't and won't work and are currently heading in the opposite direction. Really, fantasy is a great thing, but you have to think about the consequences. The Western World is heading off a steep cliff with this kind of thinking.

anoncake 6y ago
1. Sell it, finance public services with the revenue, and lower other taxes. You don't have to be socialist and/or critical to market economies to support 100% OP's proposal. 2. I don't think "estate taxes were raised" is all that happened in the East Block.
- loxs 6y ago
  1. Who is going to do it? Politicians? As it works here with the EU subsidies - 80% of the money goes through the PM's cousin's company and a hefty percentage leaks to offshore banks :) 2. Yeah, after they did that, people didn't want to work any more, so they had to force them :)
  - anoncake 6y ago
    I'm not interested in debating someone who thinks raising estate taxes is what ruined the East Block.
    - loxs 6y ago
      Enlighten me, what ruined it?
      - brrt 6y ago
        I guess the incarceration rate would be a good candidate too
      - hackyhacky 6y ago
        Totalitarian rule. Lack of democracy. Lack of freedom of speech. Constant surveillance. Integration of politics into every aspect of life. Economic exploitation by Russia. Intentional undermining of historical cultural identity. I could on.
        loxs 6y ago
        So you say that a government which takes (unwillingly) the inheritance of all its citizens can pull it off without a totalitarian approach, suppressing freedom of speech, constant surveillance (to figure out who has what) etc? I don't buy it :)
        anoncake 6y ago
        Yes, taxing people is not a totalitarian thing.
hackyhacky 6y ago
> The government is a very bad guardian. Everyone from the former East Block can attest (me including). So, you had a bad government, therefore all governments are bad? > This will make people a lot less entrepreneurial Do you think Jeff Bezos would have given up if he was able to become only a multi-millionaire, instead of a billionaire?
- loxs 6y ago
  - Yeah, I know it wasn't real socialism. You will build the real one. - The OP says nothing about not allowing Bezos to become billionaire, only confiscating his wealth upon his death. Yeah, I think he would have given up in this case. And I don't only think, I can show it to you repeatedly in socialist countries. There is no "Bezos" there :)
dragonwriter 6y ago
> The government is a very bad guardian. Everyone from the former East Block can attest “I had an abusive parent” does not imply “In general, parents are bad guardians”. The same thing for governments. I'm not saying that there isn't a valid critique of government-as-guardian generally, but any such valid critique is going to be more involved than “governments of the Soviet Bloc were bad, so government is bad”.
- loxs 6y ago
  Can you show one "non-abusive" government that confiscates people's properties? I fail to see one. And I see many proving the opposite.
  - hackyhacky 6y ago
    If you consider taxes to be a form of property confiscation, then all governments confiscate property, and therefore all governments are abusive. I don't think that's a very convincing argument against taxation.

imtringued 6y ago

People will just sell their possessions to the largest corporation around and then spend their remaining money on something wasteful. Others will try to find loopholes such as buying products from your daughter's company or simply smuggle their assets. Proposals like this also usually do not address what should be done with the tax revenue. It's almost guaranteed that it will be used for something that increases wealth inequality, because as it is right now that is the default state.

deleted 6y ago
[deleted]

jjeaff 6y ago

Interesting thing about the family farm anecdotes, supposedly, researchers have struggled to find even a single instance of a family farm getting broken up by estate taxes.

aeternum 6y ago

The trivial way around this is to start a non-profit, put all your net worth into it, then appoint your children/heirs as the sole execs. The children give part of the yield which still amounts to plenty of money without touching the principle, and use the non-profit as a limitless expense account to travel the world or curry favor as needed. All tax-free.

javert 6y ago
You can't actually give all your money to a non-profit and then spend it on yourself, so that won't work. I mean, you can, but if you get caught, which you almost certainly will, you will go to jail. Source: Ask any CPA.
- aeternum 6y ago
  Of course you don't spend it all yourself, but if your parents put $1B in your non-profit you can pretty easily get a 5% ROI and safely spend 45 mil / year on actual donations and 5 mil / year on your 'business trips'.
  - javert 6y ago
    That would be fraud. It's not likely that you would get away with this.
    - dantheman 6y ago
      How is it fraud to have your corporate meetings in Hawaii, in the swiss alps, to have team building events that are ski trips etc. Academic conferences work this way - are they frauds?
      - deleted 6y ago
        [deleted]
      - javert 6y ago
        You could do that, but it doesn't achieve the goal that was being discussed. Spending money on trips is not a "ROI" (return on investment). Plus, if you spend $5M personally on trips, that will most likely be caught as fraudulent. Because it clearly is. The IRS looks at what charities spend their money on. Meta: I will try not to engage in these kinds of discussions on HN in the future since people have made it clear they don't want this information.

zaphirplane 6y ago

Selling assets to offspring for a $1 is as old as money To close all the simple loop holes and the complex ones is How do you distinguish between a retiree selling their home to live off the income vs selling it ti pass the money to their kid

ValentineC 6y ago
> Selling assets to offspring for a $1 is as old as money Some tax authorities frown on this, and require that transactions be conducted "at arm's length": https://en.wikipedia.org/wiki/Arm%27s_length_principle#Examples_in_contract_law https://en.wikipedia.org/wiki/Arm%27s_length_principle#Examp...