Inheritance/Estate tax - why?

[strawman]

So I'm curious if anyone here is actually in favor of estate taxes in the US?

Generic arguments against it can be easily found.

I understand that those who think the "rich" should be taxed at a huge rate would also agree with the estate tax, but beyond the argument that the rich owe everyone else something, what are the arguments for estate taxes?

 

[Shakey]

Any time money/property exchanges hands it's taxed, why should this be any different? The money I earn from working has already been taxed when my employer paid taxes. Why do I have to pay taxes again? I don't see why there should be a difference.

 

[Hailey Knight]

The government should tax money I give people for birthdays.

 

[AshburnerX]

Any time money/property exchanges hands it's taxed, why should this be any different? The money I earn from working has already been taxed when my employer paid taxes. Why do I have to pay taxes again? I don't see why there should be a difference.

This is basically my take on it as well. But then again, I'm generally in favor of higher taxes across the board in order to fund social programs anyway, not just the rich.

 

[sixpackshaker]

Another big reason for the estate tax is to break up large family holdings, to keep the mega-rich from holding even more power. The tax is also responsible for the creation of most of the charitable foundations that have family names.

It also encourages the wealthy like Gates and Buffet to basically leave nothing to their kids. Gates said he would leave enough money to his kids so they can do what ever they want, not so much money that they will not do anything. Buffet has pretty much let his son live as a starving artist.

 

[MindDetective]

Another big reason for the estate tax is to break up large family holdings, to keep the mega-rich from holding even more power. The tax is also responsible for the creation of most of the charitable foundations that have family names.

It also encourages the wealthy like Gates and Buffet to basically leave nothing to their kids. Gates said he would leave enough money to his kids so they can do what ever they want, not so much money that they will not do anything. Buffet has pretty much let his son live as a starving artist.

This

 

[Shakey]

The government should tax money I give people for birthdays.

They will if you give too much. I forget what it is, but you can only gift so much without being taxed. It's just not worth it for small amounts.

 

[Tress]

Paris Hilton, that's why.

 

[Espy]

Paris Hilton, that's why.

Whelp I just got swayed.

 

[Krisken]

Well said Sixpack.

 

[PatrThom]

The government should tax money I give people for birthdays.

They will if you give too much. I forget what it is, but you can only gift so much without being taxed. It's just not worth it for small amounts.[/QUOTE]In the US, I believe the limit is 10k/yr*. If you give more than $10k* in value of gifts/services from one source, you (the giver) must pay gift tax on that amount.

Ooo, here's the relevant stuff.

--Patrick
*The one year I had to worry about it (2005?), the limit was still 10k. Apparently it's 13k now.

 

[Krisken]

There was an opinion article in the LA Times on this very thing.

I found this quote interesting-

"We grudge no man a fortune in civil life if it is honorably obtained and well used," Roosevelt said. "It is not even enough that it should have been gained without doing damage to the community. We should permit it to be gained only so long as the gaining represents benefit to the community.... The really big fortune, the swollen fortune, by the mere fact of its size, acquires qualities which differentiate it in kind as well as in degree from what is possessed by men of relatively small means. Therefore, I believe in a graduated income tax on big fortunes, and … a graduated inheritance tax on big fortunes, properly safeguarded against evasion, and increasing rapidly in amount with the size of the estate."

in addition to

"The man of great wealth owes a particular obligation to the state, because he derives special advantages from the mere existence of government."

 

[Espy]

It also encourages the wealthy like Gates and Buffet to basically leave nothing to their kids.

How on earth is that any of the governments business?

 

[sixpackshaker]

It also encourages the wealthy like Gates and Buffet to basically leave nothing to their kids.

How on earth is that any of the governments business?[/QUOTE]

Because it is vital to a democracy not to have a ruling class. It is a tax on the income of coming into a huge fortune through no work of your own.

There are many ways to get around the estate tax. It is also why you have trust fund babies. If a wealthy man dies, at a natural time, and never made any plan of what to do for his heirs; what should we care?

 

[AshburnerX]

It also encourages the wealthy like Gates and Buffet to basically leave nothing to their kids.

How on earth is that any of the governments business?[/QUOTE]

Because it is vital to a democracy not to have a ruling class. It is a tax on the income of coming into a huge fortune through no work of your own.[/QUOTE]

This is a good point too, though Congress and the Supreme Court have made some startling laws/rulings that seem to indicate they don't care about being ruled, as long as they get paid.

 

[Espy]

It also encourages the wealthy like Gates and Buffet to basically leave nothing to their kids.

How on earth is that any of the governments business?[/QUOTE]

Because it is vital to a democracy not to have a ruling class. It is a tax on the income of coming into a huge fortune through no work of your own.[/QUOTE]

That sounds much better than the way you phrased it in your original post, which sounded a lot more like "then rich kids have to have it hard too".

And as "good" of a point as you make I'm a hell of a lot less worried about Paris Hilton and her influence on government than I am about GE and Halliburton and their influence on government.

 

[Norris]

It also encourages charitable contribution, which is a public good, which is nice.

 

[TommiR]

It also encourages the wealthy like Gates and Buffet to basically leave nothing to their kids.

How on earth is that any of the governments business?[/QUOTE]
That is correct, of course. The government has no business in anything that private individuals do, as long as it is within the laws and statutes of the land.

However, it is a fact that governments use taxes, tariffs, subsidies and other similar tools to discourage/encourage private spending in the direction they feel is the most beneficial to society as a whole. You have this in pretty much any government on earth. Government interference in these things just might be something a private individual simply has to live with, including the estate tax. Why would you wish to rock the boat?

 

[Espy]

Rock what boat? I'm not necessarily against an estate tax, just against an attitude that it's ok for the government to take something because one group of people just don't like that another group has more.

Althought in direct response to your comment that the government has the right to tax, etc, etc. I agree. The hitch here is that the money we are talking about has already been taxed and good intentions of making sure rich brats don't turn into a "ruling class" still reeks of class warfare.

 

[Krisken]

Oddly enough, I would say it prevents class warfare. The rich become so wealthy the poor rise up against them, so it is beneficial for the wealthy to be taxed in such a way that the poor believe there is an even ground even for the kids of the wealthy.

Even if it is a myth.

 

[TommiR]

Rock what boat?

Why, the boat where your hard-earned dollars are taken away by the government for the benefit of the lazy and disinterested, of course.

I'm not necessarily against an estate tax, just against an attitude that it's ok for the government to take something because one group of people just don't like that another group has more.

Althought in direct response to your comment that the government has the right to tax, etc, etc. I agree. The hitch here is that the money we are talking about has already been taxed and good intentions of making sure rich brats don't turn into a "ruling class" still reeks of class warfare.

Take gifts as an opposing viewpoint. In my view, the main difference between a gift and an inheritance is that, in the first case, the ones giving the gift are still alive. Now, gifts are taxed beyond a certain amount. Is there some reason why inheritances are significantly different, and the reasons for the gift tax do not apply?

Oddly enough, I would say it prevents class warfare. The rich become so wealthy the poor rise up against them, so it is beneficial for the wealthy to be taxed in such a way that the poor believe there is an even ground even for the kids of the wealthy.

Even if it is a myth.

Even though I find such claims to be a bit far-fetched, some of the reasoning you hear over here about the high tax rate is that it is a certain form of insurance. When you are out on the town, it prevents you from getting a knife between the ribs because someone wants your shoes.

Though I admit this is a general argument in favor of taxes, and doesn't have anything to do in particular with the estate tax.

 

[AshburnerX]

Althought in direct response to your comment that the government has the right to tax, etc, etc. I agree. The hitch here is that the money we are talking about has already been taxed and good intentions of making sure rich brats don't turn into a "ruling class" still reeks of class warfare.

Like it or not, Class Warfare (and it's attempts to prevent it from getting out of control) HAS shaped this country, usually for the better. Unions were formed as a counter measure against big business because the wealthy were exploiting the poor and there was violence in the streets. Segregation was ended and affirmative action was created to address a legitimate concern about equality in opportunity and quality of life. Government college aid programs were founded to ensure that people with the skill and talent for college could have the opportunity to go, no matter their financial situation or background.

The simple fact is that Class Warfare usually stems from legitimate complaints about the current situation in the world. Some of it may be unfair or misguided, but when you literally have people in the streets, yelling death threats at the leaders of finance (as we had only a few months ago), it's usually for legitimate reasons.

 

[sixpackshaker]

It also encourages the wealthy like Gates and Buffet to basically leave nothing to their kids.

How on earth is that any of the governments business?[/QUOTE]

Because it is vital to a democracy not to have a ruling class. It is a tax on the income of coming into a huge fortune through no work of your own.[/QUOTE]

That sounds much better than the way you phrased it in your original post, which sounded a lot more like "then rich kids have to have it hard too".

And as "good" of a point as you make I'm a hell of a lot less worried about Paris Hilton and her influence on government than I am about GE and Halliburton and their influence on government.[/QUOTE]

Never mind the Hiltons, worry about the Bush clan and how they sent their children over the past two generations to go out and gain power in different areas of the nation.

 

[Necronic]

I have such a mixed view on estate taxes, and am glad someone brought it up. I'm also going to break my own rule temporarily and base my viewpoints on ideology.

I believe that people are wholly responsible for their own outcomes beyond what (dis)advantages your starting position gives you. Whatever money you make is yours, same goes for the achievements. I'm the kind of person who will strongly argue in support of the 'virtue of selfishness'.

Which is why I (ideologically) support a 100% estate tax.

No one should be given anything, and should have to earn it themselves. That goes for the rich and their inheritences as well as the poor and their welfare. I support the hell out of Bill Gates and Warren Buffet for self-enforcing this on their own children.

On the other hand, I have a very big problem with the government telling anyone what they can do with their money. So I hit a point of cognitive dissonance. I don't believe anyone should be given anything they didn't earn, but I also don't believe the government has the right to tell an individual what to do with their money.

 

[Chibibar]

I have such a mixed view on estate taxes, and am glad someone brought it up. I'm also going to break my own rule temporarily and base my viewpoints on ideology.

I believe that people are wholly responsible for their own outcomes beyond what (dis)advantages your starting position gives you. Whatever money you make is yours, same goes for the achievements. I'm the kind of person who will strongly argue in support of the 'virtue of selfishness'.

Which is why I (ideologically) support a 100% estate tax.

No one should be given anything, and should have to earn it themselves. That goes for the rich and their inheritences as well as the poor and their welfare. I support the hell out of Bill Gates and Warren Buffet for self-enforcing this on their own children.

On the other hand, I have a very big problem with the government telling anyone what they can do with their money. So I hit a point of cognitive dissonance. I don't believe anyone should be given anything they didn't earn, but I also don't believe the government has the right to tell an individual what to do with their money.

I agree. I think this came to be because only a few WILLING to give away their fortunes for the greater good. Many will keep in the family and get richer and richer hence the law was created.

 

[Necronic]

No see, I don't believe in "The Greater Good", I should be clear about that. I think altruism is poisonous when presented as a moral responsibility. My reasoning is more that no one should get something for nothing.

 

[strawman]

My reasoning is more that no one should get something for nothing.

You'll have to define "nothing," as it depends completely on one's point of view. One might complain that a stock trader is doing nothing, while another might claim that the stock trader is providing money to companies that generate income for their workers.

 

[Chibibar]

My reasoning is more that no one should get something for nothing.

You'll have to define "nothing," as it depends completely on one's point of view. One might complain that a stock trader is doing nothing, while another might claim that the stock trader is providing money to companies that generate income for their workers.[/QUOTE]

Heh. What about people who have tons of money (like Trust funds) where you can just do "nothing" and earn interest and live off it.

 

[Necronic]

A stock trader has at least made a series of choices that led to him being a stock trader. Being someone who is in line for an inheritence requires no choices, simply by being born it becomes part of you. Thats an idealized model of course, because some people choose not to give their children inheritences based on the choices the kids made....

I don't know for sure how I feel about it. There's just something about inherited wealth that bothers me. To be completely self-reporting though I am in line for some inheritences in the (hard to fully mentally acknowledge) near future.