Nothing says "I'm for meritocracy" more than voting to entirely get rid of the estate tax

[Harry Bosch]

Actually I'd call it the "use it or lose it" tax. Moving wealth into the economy is better than hoarding it and giving it to relatives. This tax provides that incentive. aa

Companies require "hoarded cash" or equity to survive. If wealth were "used" you couldn't have larger companies, malls, apartment complexes, and etc. Secondly, retirees rely on their wealth or retirement to live on.

 

[laughing dog]

Why are you taking their justifications seriously?

They would tax rich people every five minutes for breathing if they could get away with it.

Yeah, that's seem right. To some taxation is not about governmental necessity but rather punishing those who are more successful. Easier to tear down than build up.

That's like saying that for some that taxation is not about government necessity but about their inherent evilness.

 

[ksen]

Actually I'd call it the "use it or lose it" tax. Moving wealth into the economy is better than hoarding it and giving it to relatives. This tax provides that incentive.

aa

[citation needed]

http://www.kitco.com/ind/Brecht/2014-08-22-Money-Velocity-A-Measure-Of-Economic-Activity.html

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For the economically ignorant, the following chapter of reading is recommended:

In this chapter we examine the relationship between increases in the capital stock and economic growth. We first discuss whether an economy can always grow if it increases only its capital stock. Under certain plausible assumptions, we show this is not possible, and that poorer countries should therefore grow faster than wealthy ones, whose economies will depend more on technological progress than capital accumulation. We then discuss why countries with high investment rates also have high standards of living. We show that to have a high standard of living a country must, over the long run, have a high level of savings and investment. We then examine why some countries have such low savings rates and whether governments can alter this. Finally we consider the rapid growth of the Southeast Asian economies and the extent to which they have relied on capital accumulation.

http://www.wiley.com/college/miles/0471988456/sample_chapters/ch05.pdf

You highlighted the wrong part. Let me fix that for you.

 

[Alcoholic Actuary]

Actually I'd call it the "use it or lose it" tax. Moving wealth into the economy is better than hoarding it and giving it to relatives. This tax provides that incentive. aa

Companies require "hoarded cash" or equity to survive. If wealth were "used" you couldn't have larger companies, malls, apartment complexes, and etc. Secondly, retirees rely on their wealth or retirement to live on.

Not after they're dead, they don't.

aa

 

[Loren Pechtel]

But presumably it was already taxed. I'm not supporting repealing the estate tax as it presently exists, but to say that we'll tax you on what you already own because it's be awhile since we originally taxed you is tyranny. Yeah, you've paid your income tax but we noticed you still have money in your bank account. You thought that belonged to you? Sheesh, come on, don't be silly.

Unrealized capital gains are not taxed now, so eliminating the estate tax means that the inheritor receives a gift that has value that has not been taxed.

Labor income is taxed thrice when it is earned - income and SS and medicare. There is no logical reason to exempt assets on the basis they might have been taxed once in the past.

If the estate tax is eliminated then the basis step-up will also be eliminated--they'll owe the capital gains tax when they sell. And note that the de-facto capital gains rate (once you factor inflation into the picture) is higher than the regular income tax rate.

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But in your scenario, the "taxed again" is because you are engaging in economic activity. And are being taxed differently, to boot. The estate tax arises because you died. The inertia tax. Again, not supporting repeal of the estate tax as is it is now with its exemptions, but for the government to decide it will re-tax you for an asset or activity that you had before paid tax is tyranny.

Actually I'd call it the "use it or lose it" tax. Moving wealth into the economy is better than hoarding it and giving it to relatives. This tax provides that incentive.

aa

This makes no sense. You're basically saying lose it or lose it. The result will be to use it up on luxury spending--something that would be bad for the economy.

- - - Updated - - -

For the economically ignorant, the following chapter of reading is recommended:

In this chapter we examine the relationship between increases in the capital stock and economic growth. We first discuss whether an economy can always grow if it increases only its capital stock. Under certain plausible assumptions, we show this is not possible, and that poorer countries should therefore grow faster than wealthy ones, whose economies will depend more on technological progress than capital accumulation. We then discuss why countries with high investment rates also have high standards of living. We show that to have a high standard of living a country must, over the long run, have a high level of savings and investment. We then examine why some countries have such low savings rates and whether governments can alter this. Finally we consider the rapid growth of the Southeast Asian economies and the extent to which they have relied on capital accumulation.

http://www.wiley.com/college/miles/0471988456/sample_chapters/ch05.pdf

Blasphemy!

Marx says the factories will be there if they're needed. How can you say investment is needed??

 

[ksen]

Marx says the factories will be there if they're needed.

He does? Care to cite that?

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lol, just kidding! I know you don't.

 

[Loren Pechtel]

[citation needed]

http://www.kitco.com/ind/Brecht/2014-08-22-Money-Velocity-A-Measure-Of-Economic-Activity.html

- - - Updated - - -

For the economically ignorant, the following chapter of reading is recommended:

In this chapter we examine the relationship between increases in the capital stock and economic growth. We first discuss whether an economy can always grow if it increases only its capital stock. Under certain plausible assumptions, we show this is not possible, and that poorer countries should therefore grow faster than wealthy ones, whose economies will depend more on technological progress than capital accumulation. We then discuss why countries with high investment rates also have high standards of living. We show that to have a high standard of living a country must, over the long run, have a high level of savings and investment. We then examine why some countries have such low savings rates and whether governments can alter this. Finally we consider the rapid growth of the Southeast Asian economies and the extent to which they have relied on capital accumulation.

http://www.wiley.com/college/miles/0471988456/sample_chapters/ch05.pdf

You highlighted the wrong part. Let me fix that for you.

In other words what we have been saying all along: You need capital and labor. Your side wants to eat the capital--and ignores the fact that doing so is eating the future.

 

[laughing dog]

If the estate tax is eliminated then the basis step-up will also be eliminated--they'll owe the capital gains tax when they sell.

We don;t know it will be eliminated. And a tax deferred is not a tax not paid. Plus all of this ignores the real point - that there are asset values that are not taxed even once.

And note that the de-facto capital gains rate (once you factor inflation into the picture) is higher than the regular income tax rate.

That is simply not a necessary fact.

 

[bilby]

The Republican Recipe for Widening Inequality

Separate from the budget plans, nearly all House Republicans and seven Democrats passed a bill last week to repeal the federal estate tax on inherited wealth. Repeal would benefit the 5,500 wealthiest families in America each year and would do nothing for everyone else, because the estate tax applies only to those at the very top of the wealth ladder. For estates valued at $50 million and up, for example, repeal would save the heirs about $20 million per estate, on average, in 2016.

When I first read the headline of this piece I thought it was going to be about a Republican plan to address the problem of inequality. But after rereading it a couple of times, along with the article, I see it's actually about the Republicans doing what they can to make inequality even wider.

I can see how it'd be a hardship to only inherit $30 million instead of $50 million. I mean how do they expect the offspring of job creators to make ends meet?

Also who gets hit by the estate tax?

http://www.taxpolicycenter.org/briefing-book/key-elements/estate/who.cfm

According to the above link in 2011 8,600 individuals left estates large enough to qualify for the estate tax. Of those 8,600 people only 3,270 left estates large enough to be taxed after deductions and credits were taken into account.

If that's the case that less than 5,000 indivuals (at least in 2011) actually had to pay any estate taxes then why do the Republicans, and 7 Democrats apparently, have such a hard on for getting rid of it?

I've heard the whole "family farm" and "small business" arguments but in 2011 less than 50 small farms and businesses were effected by the estate tax.

Man, I wish the Republicans would spend as much time and energy working on issues that helped the remaining 311,696,730 of us as they do for the 3,270 that ended up owing the estate tax.

Just out of interest, this measure that affects about one in every 100,000 Americans; what proportion of people who served as US Representatives does it affect? Roughly speaking?

Would I be right to suspect that this tax applies to more than one congressman out of every 100,000?

 

[braces_for_impact]

The estate tax is a small price to pay to be able to buy politicians.