Let's see where this goes: let's talk about a 100% Inheritance tax.

[eyepaddle]

I would just like to float this balloon and start the, uh, well...general discussion of this topic.

Could somebody fiond numbers as to how much wealth is transferred annually in the US via inheritance vs payroll? I seem to recall reading Michael Parenti and getting the impression that inheritance was greater than all wages and salaries combined, but I don't have the numbers handy. I think that would be a good place to start.

I'll also get the ball rolling and start to ponder how much more equal we would all be if we in fact started out equal. Let's REALLY level that ol' playing field. A possible corollary: what might the effects be on our political system if there were no more motivation to game the rules to favor your offspring at the (often ruinous) expense of everbody else's?

Finally, would this generate enough revenue to eliminate personal income and payroll taxes? Then we could get to actually keep all that we make--and none of what somebody else makes.


(DISCLAIMER: Yes this post is largely tongue in cheek, as I might as well wish the moon were made of delicious cheese--and that it could be delivered to my door, in manageable portions. I just want to seriously start thinking "outside the box.")

[KittyWampus]

1. So even though I gave up my gardening business to move back to family business

and have given huge parts of my life to this place, I should inherit nothing?

My father refuses to relinquish his possession while alive.

[eyepaddle]

10. Since this is an edge of the envelope spit ball of an idea, yeah.

You get to keep what you earn, and not what somebody else earns and relinquishes to you upon their death. Giving after death doesn't hurt much (well, as far as we know!) but gifts in life have an immediate cost.

As an off the top of my head solution to this concern, perhaps shares of ownership could be used as a form of compensation. Alternately, since I don/t think any withnoldings from your paycheck would be required, you could take your entire paycheck and use it to amass your own fortune.

[KittyWampus]

21. I do own partial share & can't be given more cause of tax rates. I don't generate much salary

since this is a small family business. Mainly, my own and my family's living costs are covered.

We purposely don't generate a profit, btw. At the end of the year, we spend whatever income is over expenses on improvements so books balance to about zero.

Your method would kill off small businesses and ensure they didn't continue past one generation.

[eyepaddle]

24. Well, first of all this is really a "thought experiment" and not a proposal

But try to imagine it--just to see where it goes

I'll throw out a bit of personal disclosure: when my wonderful and hard working parents pass on, I hope to be able to come out even and after clearing up any issues regarding their estate. I've always known that if I wanted anything in this life I would have to earn it on my own. I've never been all that worried or upset about this prospect and I am just trying to imagine a world where everybody is in the same boat as me.

[liberalhistorian]

52. Who the hell are you to decide

what people should and should not be able to inherit and how people should or should not leave their property and assets? You have no right whatsoever to do so.

[dysfunctional press]

72. he's not deciding- he tossed it out as an idea for discussion, as he pretty clearly stated...

comprende...? discussiones...? :shrug:

[eyepaddle]

73. First off, breathe. Second:

see the parts where I talk about "tongue in cheek" and also refer to this topic as being in the "land of make believe."

I get to "decide" becuase I started this, and somebody asked me a question. So to give them a further point to talk about I just threw something out there.

Remember: I'm just some guy tossing out ideas to talk about on an internet message board--I'm not really sitting on a tax committee laying out a map for funding government. So not only do I have no right, I have no power.

So let's get back to our regularly scheduled game now....

[Dr.Phool]

104. That's what you say now.

I'll bet you run for congress and ram that through!

Commie!

:silly:

[BurtWorm]

125. You mean I have to die and leave all my shit to my heirs before the next election?

:scared:

[dysfunctional press]

70. if there were a 100% inheritance tax, he'd probably be more apt to relinquish posession while alive.

is another way to look at it.

[FormerDittoHead]

144. Thomas Paine suggested an upper limit of inheritance. I would suggest a hard $100 million.

...and I don't want to hear any "oh I worked all my life for that $200 million..."

I don't want to go hard against people who work for a living, but if their unborn great, great grandchildren will never have to work a day in their lives to live lavish lives, I simply think there's something wrong with that system.

As for our current system, simply, the inheritance taxes serves to capture the unrealized gain from wealth accumulated during ones life, in your case your father's. If one builds a business up and up, and sell it / transfer it one day before you die, you have to pay tax on the gain realized.

Inheritance tax simply does this, while leaving a very generous exclusion for the first millions.

In the case of your business, unless your father established a irrevocable trust, the SOB can literally change his mind the day he dies, give everything to his mistress and leave you with nothing to show for all your work (reference Anna-Nichole Smith). I personally think it stinks that he doesn't have a systematic way of cutting you in for your efforts as they've been made. By not doing so, he literally has been stealing your work while you have to trust him not to change his mind at the 11th hour, which has been done time and again. I don't really know that he's an SOB, sorry about that, but the fact is that he COULD do something on your behalf NOW, but he's chosen not to do so.

[flvegan]

2. There's a lot of real property in that inheritance number, though.

It's not just cash.

[eyepaddle]

20. The real property would go back into pool too.

I'd envison some kind of auction for tangible assets.

[flvegan]

25. What happens to the kids/family living in the house that mom owns

when she dies?

[eyepaddle]

27. Hmmm, for this example I'd say that they can bid on it just like everybody else.

(In case you've missed my allusions in other posts, I just want to take a hard look at our assumptions and see what shakes loose. Since I've never seen this assumption even considered, let alone questioned, I thought I'd go for it full on--with no pussy footing around!)

[flvegan]

37. But then the family is buying the same house over and over

each generation. Might as well not own homes or property any more.

[eyepaddle]

40. Exactly.

I'm kind of curious--would civilization be able to continue AT ALL without inheritance? And if it could, what would it look like?

[Gwendolyn]

64. With the government basically owning everything, and simply "loaning" it out...

to each subsequent generation, it would be the ultimate big brother existence. Blegh.

[Hannah Bell]

110. Or just give a house to everyone at birth & save all the sturm und drang

of working one's whole life to pay it off.

[dysfunctional press]

76. the house would be put into a family trust...no one person would "own" it...

so unless everyone in the trust died in one horrific accident- the house wouldn't be lost. maybe not even then.

[KittyWampus]

123. In most non-Western societies, real estate belonged to the tribe and each family had access to their

space as a member of that tribe.

So no individual actually ever owned property.

[dysfunctional press]

132. i prefer our way.

i LIKE having my own space.

[Cid_B]

146. Check the middle east for how will tribalism works...

[FormerDittoHead]

145. The property could be retained along with the ORIGINAL BASIS of the property for when it does sell.

In other words, you inherit property but your parents bought that $4,000,000 house for $30,000. You get the house, no inheritance tax, but the *ORIGINAL* BASIS is maintained.

When you sell it for $4M, you simply pay cap gain tax on the gain of $3,970k.

I think that would be a pretty fair way to do it.

[Democrats_win]

3. Tax the rich and their dead relatives. (No one else has any money.)

[SteelPenguin]

4. Well...Thinking Outside the Box

What would happen if there were a 100% Inheritance tax...

Most likely people would transfer all of their money into trusts or to their offspring, and then pay themselves out of that. The richest people would be completely unaffected by such a tax, while the poorer you are the more likely you'd be unable to do something like this, and you'd end up paying.

Would there be exceptions? Farms? Under a certain amount? if not and it's truly 100% this would dramatically hurt the poorer people. The people with 20k in the bank, and a house would lose everything and any hope at a better life. Meanwhile the billionares would have all their money offshore or in family trusts and be completely insulated. Much like today.

[eyepaddle]

23. C'mon, let's really get out onthe edge here: if we are going to

fundamentally change a facet of human society and economics that is as long lasting, pervasive, and fundamental as inheritance, we can surely tinker around the edges of estate law for things like trusts and tax shelters.

[Selatius]

As it currently stands, I believe the first $2,000,000 of an estate is tax exempt.

If your father owned a family farm worth $800,000 and willed it to you after his death, the IRS shouldn't be knocking at your door as far as inheritance goes.

[KittyWampus]

18. And because of real estate prices going through the roof, our property is worth WAY over

2 million. This place has been in the family for 3 generations.

If we sold it, buying places here for myself and rest of family would be very difficult.

[Selatius]

31. Well, is there a counter-proposal you recommend?

Where I live and in many other areas, real estate prices have not only dropped, they have crashed. Do you want to raise the cap to $5,000,000? It may or may not be a solution to your problem. Several states have enacted their own inheritance tax at much lower cap rates. I don't know if your state is contemplating it, but I do know a lot of states are trying to find new ways to avoid running large deficits by enacting new taxes.

[eyepaddle]

34. This is what I'm really getting at

I figured ther would be an itinial storm of outraged invective, but then after that passes people will start looking at the nuts and bolts numbers.

For all I know a 0% inheritance tax is really best for everybody. But I think we all know that isn't the case, and since we are closer to that zero than 100, I figure there is more to be learned at this edge.

Making quiet incremental suggestions rarely comes up with much useful--so let's see people justify their emotional positions.

[Selatius]

96. A 0% inheritance tax might end up destroying the Republic in a few generations.

One of the big philosophical reasons underpinning the existence of an inheritance tax is to avoid a massively powerful landed aristocracy from emerging in the United States. People like Thomas Paine were very early proponents of the inheritance tax. He essentially argued that God gave "the earth as an inheritance to all his children." He was opposed to inherited political power, and by extension, he was opposed to inherited economic power as well.

[KittyWampus]

124. good question, and yes. Raising cap would make sense. Real estate value has not and will not crash

where I live.

it might plateau, but not crash.

[Selatius]

133. Well, suppose it is raised to 5,000,000 and left permanently.

Sure, that hurdle is removed, but what happens if your state legislature or the local county continues to jack up the property taxes to pay for social programs. Wouldn't there be a day where you could not afford the property taxes given the increasing value of the land?

[GCP]

5. So having worked hard all our lives

To be able to leave something to the kids, they get nothing?
Screw that - I'd give most away before I die in that case. :grr:

[eyepaddle]

16. Yeah, but in that case you'd actually have to give it away, and then live without it.

For what is usually an unknown length of time.

[aikoaiko]

6. Wow, we win a Presidential election and now the crazy talk begins

:silly: :wtf: :freak: :hurts: :wow: :nuke:

[mmonk]

7. Let's suppose you have a disabled child that will not be able to take care

of himself or herself when you die.

[eyepaddle]

17. Let's suppose you have one of those right now, and also happen to be

poor.

[mmonk]

57. I have one, but am not poor.

So how will me being unable to leave him what I worked hard for benefit someone else? Before this is turned into me being against any taxes or so forth, let it be known I don't have any problem with taxes in general or an inheritance tax provided it isn't punitive (a 100% tax would be). Proceed.

[lumberjack_jeff]

19. Presumably society would be well enough off that they could take care of the child. n/t

[mmonk]

63. Presumably our society could do that now

but such programs are always the ones that receive bare bones funding and are always the programs politicians cut first during budget negotiations.

[lumberjack_jeff]

68. If the people with money had some skin in the game perhaps it wouldn't always be so. n/t

[mmonk]

80. The decisions and priorities are set in Washington.

As a stand alone idea, a 100% inheritance tax is a bad idea. Presumably, only the wealthy with tax lawyers and accountants would know how to avoid it through loopholes.

[eyepaddle]

81. Before anybody gets their feeling too hurt,

I want to remind everybody that my post is tongue in cheek to really see what sre the pros and cons to the estate part of our tax law.

Another of my pie in the sky ideas (and a more serious one) is that we as a society take care of our vulnerable. I am very convinced that we can, and fairly conviced that we will move in that direction, in the fairly near future.

[mmonk]

86. Mine aren't and I'm with you on the idea of our society taking care

of vulnerable. I was a disabilities advocate for many years and I'm still appalled at how little basic human empathy there is in this country.

[lumberjack_jeff]

87. I agree, a 100% inheritance tax is a bad idea.

I simply think a 0% inheritance tax is a worse idea. The "ownership society" is great for the owners, because they have their own "society" and have little stake in everyone else's.

[arcadian]

8. Fuck the tax. Let's just seize their assets

Of the top %1

[yodoobo]

15. only top 1% Lets go for top 50%

After all, they are already wealthier than average and that's not fair.

[NeedleCast]

59. If you make more money than me

Then I suggest we seize your assets as well.

[arcadian]

85. The proles defending the elite

They will supply the rope the elite will hang them by.

[muriel_volestrangler]

128. You mean "Let's make 3 million people homeless"

Is that really a good idea? An 100% inheritance tax takes assets that people don't need to live. Seizing living people's houses seems a little rough, to me.

[Sebastian Doyle]

9. Bush. Hilton. Rockefeller.

Aren't you sick of those people? Because the inheritance tax (and most other taxes on the rich) have been gutted, they continue to fuck up this country.

[yodoobo]

11. Would be a boon for the trust and life insurance industry

Anyone with a home or assets would take steps to insure that their assets are transferred before death.

Don't think for a second that the wealthy won't find a way to transfer their wealth to their children to avoid a 100% tax. In fact, they already do with the tax rate far lower.

[cali]

12. your idea would ensure the demise of every family farm in my state

and that's just about every farm in the state. No thanks. You'd kill small business in this country.

[Xithras]

62. Forget your state. This proposal would ensure 100% corporate farming.

Farmers don't make enough money to repurchase hundreds of acres of land every time the deedholder dies. I know of one case where an old farmer died, passed the farm on to his oldest son, and that son was killed in a tractor accident the following year. The farm passed to his younger sister at that point. If a 100% inheritance tax existed, the farm would have ended up in the hands of a property speculator, developer, or agricultural corporation. As it works now, the sister and her husband raise walnuts on that property today.

Honestly, this would apply to just about anything. Forced repurchasing of property every generation would have one of two impacts. It would either concentrate ownership of the land into the hands of the extremely wealthy who can afford it, or it would drive the value of land down to a pittance where it was worthless (permanent economic depression).

[eyepaddle]

83. Just for the sake of this discussion, do you think Corprarations would

remain that huge? After all most corporate decisions are made for the beneift of their largest shareholders. Who generally get to be large shareholders because they inherited the stock.

[Xithras]

89. Of course they would

Corporations exist for the benefit of shareholders, but not because of them. Your proposal may reduce the concentration of stock among some wealthy shareholders, but a dilution of stock ownership will have no real impact on the functioning of the corporation itself. From a corporate point of view, it doesn't really matter if a company has 5 shareholders with a million shares each, or a million shareholders with 5 shares each. The corporation is still going to behave in a manner that will result in the maximum amount of revenue being directed to each of the shareholders.

By the way, in the modern economic world, the largest shareholders in any particular corporation are, more often than not, other corporations. Since corporations don't die, the result would be the gradual accumulation of wealth in the hands of those corporations at the expense of individuals. We'd become a nation of renters, borrowing our homes from the same corporations we work for, and buying our food at the stores owned by our landlords. It would be a corporate controlled hell that would make any cyberpunk fan drool.

[ogneopasno]

13. No thanks.

[gravity]

14. Then the rich would just give away their assets before they die

The only people that will be affected are those with unexpected deaths

[HamdenRice]

41. Actually, they can't get away with that

The inheritance tax -- it's actually called the "estate and gift tax" -- was cleverly designed to prevent rich people from giving away their assets.

Gifts and inheritance are treated the same, and you had to pay the same tax on them -- until Bush virtually abolished the estate tax.

That said, we know perfectly well how to prevent the rich from giving away their wealth to avoid inheritance taxes.

[Maru Kitteh]

22. No. I don't think the government should get one thin dime. I'm fine with taxes on me while I'm

alive and more than happy to do my part. When I pass, I should have the right to say where anything I manage to leave goes, be that to my kids or a charity or whatever. I earned it, I paid my dues on it, and I should get to say where it goes. All of it.

[eyepaddle]

26. Well, yeah, in the real world sure. But in the make believe world of my topic, what then?

Hmmm?

[Maru Kitteh]

135. Your make-believe world, in a best case scenario - might - might

level the playing field for a very short time for a generation or two at most. But I doubt it.

After that you come to the question Plato proposed in "Republic."

What is justice? Who is just? Where does the just person come from? How do you make a just person, and what does the just person require?

[OPERATIONMINDCRIME]

28. One Of The Downright Dumbest Proposals I've Ever Heard.

[eyepaddle]

30. Very candid and direct, but not very useful for the moment

please refer to:

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4783078&mesg_id=4783300

[OPERATIONMINDCRIME]

32. Your Link: A Child Post As Downright Dumb As The Parent Post.

The proposal is mind numbingly retarded.

[eyepaddle]

35. Well, if you really want to argue with a guy who isn't arguing back I say go for it.

And I think you missed a hyphen.

[OPERATIONMINDCRIME]

45. There Was No Argument. Merely Factual Statements.

[HamdenRice]

43. Most economists and legal scholars disagree with you. So the OP is not dumb at all. nt

[OPERATIONMINDCRIME]

44. ROFLMAO!!!!!!!

:rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl:

[HamdenRice]

46. roflmao is not an argument. Why don't we compare sources? nt

[OPERATIONMINDCRIME]

50. Statements Rooted In Sheer Stupidity Do Not Require An Argument.

Laughter is more than adequate.

:hi:

[HamdenRice]

58. You're right. That's why no one needs to argue with you.

You are the perfect, perfect example of your aphorism.

[OPERATIONMINDCRIME]

79. Not Surprised That Your Wit Is No More Developed Than Simply "I Know You Are But What Am I"

:dunce:

[HamdenRice]

93. No, facts. See post 88. Do you have a rebuttal? Or just more snark?

I already know the full range of your ability to "reason" and "argue" so I'm not sure why I even asked the questions in my subject line.

[OPERATIONMINDCRIME]

107. Your Post 88 Was Completely Irrelevant To This Discussion. Completely.

Your response 88 was written as if this thread was simply suggesting the need for there to be an inheritance tax or an inheritance tax greater than what currently exists; mainly for the wealthiest of wealthy. As any even slightly intelligent person would easily recognize; however, it is not. Why you felt the need to write that response at all is quite perplexing, since it has nothing to do whatsoever with the argument presented in this thread. Instead, it debates a completely separate issue; which is whether or not inheritance taxes should exist at all or if they should be raised even more for the top tier wealthy. Wrong thread, wrong discussion.

This thread, THIS discussion, was about this completely retarded concept of having a 100% inheritance tax including property. That concept is one of the downright dumbest things I've ever heard. I doubt you'll find ANY president that would condone such ridiculousness.

Can wrap your post up in one word: FAIL.

[HamdenRice]

109. I see. You see no connection between 100% and 90% as compared to zero

It's that Bush-like "black and white thought process." Post 88 is about very high, confiscatory, marginal inheritance rates -- rates designed to take almost 100% of inheritance above a certain level.

If you're simply too dense to comprehend the connection between a theoretical statement like the OP and presidential policy statements that come close to implementing it, then you're not a very nuance thinker.

But everyone knew that already.

[OPERATIONMINDCRIME]

115. Does Your Strawman Have A Name?

Not surprised to see a completely illogical response. The OP was calling for a 100% inheritance tax on EVERYBODY, property included. Such a proposal is just plain stupid. Your post 88 spoke of Presidents condoning inheritance taxes, on a progressive scale and with only the wealthiest of the wealthy paying extremely high rates. So having that said, it is plain to see that I am the one that DID in fact draw the proper comparisons as well as proper conclusions by deeming them completely unrelated arguments, whereas it was YOU that seemingly is incapable of seeing the connection as to how completely different the two arguments are. You were arguing something completely different than that of the OP and if it something you care about that much you should start your own thread since it's a different topic. But arguing it here with people who responded to the OP, which was a COMPLETELY different argument, as if their same positions applied to YOUR argument, is beyond irrelevant and misguided.

FAIL.

[HamdenRice]

117. "COMPLETELY different argument" ???

So confiscatory inheritance taxes above a certain limit is somehow a forbidden, irrelevant topic and response in a thread about confiscatory taxes without an exemption?

But completely disagreeing with the OP is an acceptable topic in such thread?

Do you ever read what you write? Do you ever think before you write? Do you realize how bizarre you sound?

At this point, rofl is indeed an appropriate response, as it would be to the guy on the subway communicating with Martians through the fillings in his teeth!

:rofl: :rofl: :rofl:

[OPERATIONMINDCRIME]

127. Your Inability To Comprehend The Severe Flaws in Your Responses Is Troubling.

Nonetheless, it has become quite apparent that you are incapable of overcoming your completely flawed reasoning in your responses here, so I therefore will waste no more time responding to your fallacy.

[cherokeeprogressive]

47. "Most legal scholars"

Is that like four out of five dentists?

The OP is ridiculous.

[HamdenRice]

49. OK. I forgot the Bush era has made people disparage expertise

Better we should get our data from the Rush Limbaughs of the world.

[cherokeeprogressive]

60. Get your data from Limbaugh if you like.

I'm still trying to figure out what study you're citing when you use the term "most legal scholars".

[mmonk]

75. You do understand what 100% means?

It means selling off a family's assets completely and giving it to the government to spend as it sees fit immediately while in the meantime, destroying the wealth (in the case of family) of someone which won't be able to grow and/or be taxed in the future. It's not a very smart idea.

[HamdenRice]

95. 100% marginal rate at some point

As I've said, I'm not agreeing completely with the OP, but I could see an exemption, and a progressive rate that reaches close to 100%. I think 100% would be politically impossible, but 90% isn't.

I see no reason why anyone needs to inherit $21 million as opposed to "only" $20 million, so I could agree with a 100% rate at some point.

[mmonk]

100. I didn't see mention of a progressive estate tax, just a 100% one.

[eyepaddle]

131. Yeah, but since I also said it was tongue in cheek I think that indicates I'm willing

to listen all kinds of ideas on the subject.

This isn't a burning passion for me, I just had the "hey what if...." thought this morning and figured this would be a good place to get a WIIIIIIIDDDDDDEEEEEE range of very candid opinion and a fair amount of actual info.

[Evoman]

138. Yeah, it may not be very rational, but the point is that you are supposed to make an argument.

The OP is trying to start up a discussion...it doesn't seem to me he has an agenda.

Instead of just calling it "retarded", try to regard it as a thought exercise, and post a well-reasoned argument.

[OPERATIONMINDCRIME]

139. Retarded Proposals Require No Counter Argument.

[Evoman]

140. No, quite the opposite. Retarded proposals are EASILY counter argumented and should be

argued against in order to make sure they don't become policy (which, if you have ever lived in the real world, is encountered frequently). There are people who may not be aware of the impacts of this sort of proposal. There are other people who want to hear the counter argument to find the limits of a workable proposal.

Calling something retarded and dismissing it, ESPECIALLY when the whole purpose is a tongue in cheek attempt to provoke discussion, makes you look rather asinine.

[OPERATIONMINDCRIME]

141. Not Quite The Opposite Whatsoever. In Fact, My Statement Was Spot On.

Throwing a counter-argument out to an on its face completely retarded concept is nothing more than a waste of time. I mean, if an adult approached you and asked "hey! Why don't we colonize the sun? Think of all the free heat and solar energy we could use if we moved there!" would you actually feel the need to counter argue the point? Hey, if you would want to waste your time doing so well that's your choice. Me? I'd roll my eyes and think "my god what a retarded notion".

Trust me... 90+% of people reading this thread read the OP and think nothing more than "god that's retarded", without having the slightest urge to have to offer anything in reply.

[Evoman]

155. Ha...your sun proposal is actually a staple of science fiction.

Maybe not living on the sun, but certainly building a world around the sun!

Certainly it is a "waste of time" if you not interested in the topic or the "thought game", as it were. In which case, it's probably a waste of time coming here and calling it stupid in the first place.

Furthermore, I myself find it entertaining to imagine a world that attempted a misguidedly search for equality by preventing the inheritance of wealth. What would the U.S. look like if it attempted it? Would it ruin the country? Change the balance of power?

Is it ever going to happen? No. Never. But still fun to think about. Furthermore, I'm going to stop using the r-word in my responses to you, and maybe you should do the same. I've found that the term offends other DUers (even though I can't say I haven't been tempted to use it)/

[Gwendolyn]

29. Lol, that sure is thinking outside the box.

What would the government do with all those cherished family heirlooms, stamp/coin collections, and great great grannies' wedding rings. Wouldn't make much sense to own or value anything anymore would it?

[jmg257]

33. NO thanks. One reason we work hard is so our kids can be/start better off then we were/did.

I like being able to do that with our money. There is no need for them to struggle as we did if we can help them and still teach responsibility, morals etc.

[ebdarcy]

36. I'll pass. An inheritance isn't always just about the monetary value.

I lost my grandfather right before Christmas of 2007. We were very close, and I was devastated. I took it very hard, and it hurt, and still hurts, a lot. But I live in his house now, and have his books and bedroom furniture. And all these things help to keep him close. If the house had been auctioned, I would never have had a shot at it. As it is, I now live in the house I practically grew up in. None of this is about money.

[AngryAmish]

38. Accountants and attorneys full employment act

There will be tax dodges. There will be money laundering.

Ban anything like this and no one will comply. Why do people work so hard? To give their kids something. it is basic human nature.

[HamdenRice]

39. In the past, both progressives and conservatives favored confiscatory inheritance taxes

There is no justification in either traditional or liberal or conservative capitalist ideology for allowing a lot of wealth to pass from one generation to the next.

You might be surprised to learn that in the 1800s, many extremely conservative ideologues railed against inheritance. Not only were inheritance taxes created to prevent inheritance, but the very system of trust inheritance was shot through with devices to make it more difficult for the rich to pass most of their wealth to their children.

The main conservative and liberal economic reasons for allowing some wealth to be passed down is as an incentive for the present generation to work hard and get wealthy. In other words, we have a certain amount of "utility" from getting rich and enjoying it while we live; but we get some additional "utility" from getting rich and knowing that we can also take care of our loved ones.

This justification, which used to be agreed on by both conservatives and liberals provides for limited inheritance with very high, confiscatory progressive taxation above a certain ceiling -- in current prices, probably about $2 million.

The ideology we have today, epitomized by Bush, which favors unlimited inheritance is not traditional conservatism. It's more like what Krugman calls "economic royalism" -- a desire to create a permanent aristocratic class. That is not traditional conservative capitalist doctrine.

That said, there has been a lot of scholarship that shows that the passing down of wealth is trivial in providing advantages to the next generation compared to the passing down of connections, status, elite education, and other intangibles.

[eyepaddle]

42. Thank you,

I knew that this tread would get productive after the initial storm passed.

You wouldn't happen to have any links handy would you? I'd like to learn a bit more about this.

[HamdenRice]

56. Not online sources -- mostly books

But it is little appreciated that every since Blackstone's Commentaries, English and American law has been extremely hostile to inherited wealth, and especially "dead hand control" of the resources of the living by the wishes of the dead.

Unfortunately, legal experts and courts don't make tax policy, which is influenced by lobbyists for the rich.

But the basic idea is that law is largely dominated by economics. Economics looks to what incentives, or effects, legal rules have. Inheritance provides very few socially useful incentives and has few rationales. Most people will argue something like, "I earned it" -- without realizing that the "I" who earned it is dead at the time of inheritance, and therefore his or her wishes are irrelevant.

By contrast the children are alive, but there is no conceivable way that inheritance incentivizes them to any particularly useful behavior.

Much of the anti-inheritance bias in America can be traced back to Harvard Law School in the late 1800s/early 1900s, when that institution was extremely deferential to rich capitalists, but nevertheless for exactly the same reason was extremely hostile to inherited wealth.

Capitalism and inherited wealth were seen to be diametrically opposed until quite recently.

[Sanctified]

48. This is the perfect method for creating a serfdom.

Imagine all the people who would live in constant poverty with no chance of ever making it out of it since they are always starting at zero. But you say well the wealthy children will start at 0 too, which is bullshit because the wealthy children would have had the best education money can buy. Wealthy parents will spend every fucking dime before they die on their kids to make sure you and I don't ever make it out of poverty and their kids will be the ruling class.

[HamdenRice]

97. There's a famous article on inheritance tax that made a similar point

but it drew a different conclusion. It said we should have high inheritance taxes, however. The article said that wealth that people inherit is trivial compared to good health care, education, child rearing, confidence and family morale.

But it concluded that the middle class would triumph, not the rich, if most tangible wealth was highly taxed on death.

[Sanctified]

112. Sounds like the article did not take into account the human nature of greed.

People will do whatever they can to pass their wealth onto their children and if they can't give it to them via physical assets then they will do it in education, health care and shady business deals. Now in an imaginary utopia where people will willingly save their life's earnings just so they can give it to the government when they die maybe the middle class will prosper but the reality says the Government will not see one penny of a Billionaires assets.

[cherokeeprogressive]

51. Which room in the Kennedy mansion at Kennebunkport do you think they'll give me?

I hope it's one with an ocean view.

[eyepaddle]

82. Well, you'd be free to put in a bid, let's hope it wins.

Side topic--do the Kennedy's have stuff in Maine too--or are they just at Martha's Vinyard?

[Burma Jones]

53. It would make leaving the USA a very attractive option

I wonder how many people can fit in the Cayman Islands......

[NeedleCast]

54. The effects for many people would be a disaster

First, this would probably lead to most people going to massive effort to hide their assest.

What are your plans for situations where:

1. Both parents die suddenly together (car crash, natural disaster, etc) and leave behind children? Are you planning on putting all the parent's wealth and real estate into the collective and making the children wards of the state?

2. Business transfers. In case of a small business with a sole owner, what happenes to the business when the owner dies? Is the business liquidated and the employees fired?

3. It would be a ridiculously easy system to circumvent in the case of old age, assuming you have children or people you trust. You just transfer your assets to them, pre-death and the problem is solved.

4. In the case of three, if this were to ever happen, I would immediatly move out of the US and open an escrow business over-seas that would hold assets for people near death, then transfer them to their designated recipiant. Then I could be rich too!

I could go on in this vain for awhile I think, mostly because I see this plan being full of holes without a lot more details. More over though, I wouldn't support it even if it did eliminated personal income and payroll taxes. It's way, WAY too social for me. People should not be deprived of their assets simply because they meet their inevitable end. I don't stand to gain much from my (dog forbid) parents death, most of it would be heirloom stuff that's been in the family or has some special meaning.

...and you'll be taking that 1964 powder blue mustang convertible out of my dad's garage over my dead body.

[HamdenRice]

66. No, most modern societies have had confiscatory inheritance with no problems

1. Both parents die suddenly together (car crash, natural disaster, etc) and leave behind children? Are you planning on putting all the parent's wealth and real estate into the collective and making the children wards of the state?

All systems of high inheritance taxes provide for an exemption of a reasonable inheritance above which confiscatory taxes kick in. Adjusted for inflation that amount right now is about $2 million. That's more than enough to take care of children. Similarly, additional exemptions can be made for the cost of college education and other childhood expenses. Special provisions are made for children whose parents die before they reach the age of majority. That said, the timing of the death of the parents is largely irrelevant to the issue of how much inheritance is allowed.

2. Business transfers. In case of a small business with a sole owner, what happenes to the business when the owner dies? Is the business liquidated and the employees fired?

This is also not a problem. First of all, there are the exemptions I listed in 1 so that small businesses usually don't have a problem. If the business is bigger, then the children need to either pay their fair share or sell the business as an operating concern. There is no reason that an inherited business is any more precious than inherited stocks and bonds or inherited real estate. This is a red herring. See 3 below also.

3. It would be a ridiculously easy system to circumvent in the case of old age, assuming you have children or people you trust. You just transfer your assets to them, pre-death and the problem is solved.

The system as it has operated is impossible to circumvent through life time gifts. The tax is actually called the "estate and gift tax." Lifetime gifts are treated almost exactly the same as inheritance, so there is no way to circumvent the tax by giving away property during life.

There are, however, exceptions made for family members who contribute to the build up of the wealth. Spouses don't pay any tax because they are considered co-owners during life. A child who helped build up the farm or business, likewise, can be treated as already an owner by virtue of his contribution, not as a gift recipient or inheritance recipient.

4. In the case of three, if this were to ever happen, I would immediatly move out of the US and open an escrow business over-seas that would hold assets for people near death, then transfer them to their designated recipiant. Then I could be rich too!

The IRS has decades of experience tracking down off shore accounts. Most governments cooperate with each other over these issues. You might think about tax haven jurisdictions, and it may seem easy to stash your wealth there, but you are probably not aware of the number of rich people who have been forced to sit in prison for contempt until they repatriated their overseas assets from tax havens. If the person transfers assets to tax havens overseas for the benefit of children and then dies, the government will recapture it as the child tries to dip into it to bring it back here. This is almost impossible to accomplish in real life. The only option is self imposed exile, which most people find less preferable than paying their fair share.

[NeedleCast]

71. You are not playing along with the rules the OP set

He said that, in this scenario, 100% of all assets would NOT be inhereted. Everything goes into what I assumed to be some sort of common tax pool.

All my points above are reasons why I think the plan would fail, or be terribly hard on society. The OP made no arguments about provisioning for children or businesses or whatever and we're not talking about the current system, we're talking about the OPs scenario.

[HamdenRice]

92. What he said.

I'm basically arguing for an exemption and near 100% marginal estate tax rates above the exemption, so we're not really coming from such different points of view.

[Gwendolyn]

74. The OP is proposing a 100% inheritance tax. You don't seem to be.

[eyepaddle]

77. Yeah, but that's just the intial point for debate

I'm very willing to listen to whatever points people make pro, con or even tangential to the original post.

So, carry on. :)

[Cleita]

55. I dunno. The rich usually put most of their money in living trusts for their heirs before they

die to avoid inheritance taxes anyway, so I never understood why they didn't want to pay the little that was left to pay. I would like to find a better way of taxing wealth before they die and hand it off to heirs. I think taxing stock market and banking transactions was an excellent idea Bernie Sanders came up. This is where the real wealth is in good times so I would like to tax the rich in this way. I would also make anyone who has more than a single family home pay extra property taxes on their mansions, second, third and etc. homes and all improvements like tennis courts and such. Also, luxury cars, yachts and private jets it seems would warrant extra taxes.

[eyepaddle]

84. Thank you,

it's stuff like this I was really looking for with my OP.

[HamdenRice]

113. This is a myth. Lifetime gifts, like living trusts, do not avoid inheritance taxes

It's surprising how often this has come up in this thread. The tax is actually called the "estate and gift tax" and it treats gifts almost identically to inheritance.

Living trusts help avoid the hassle of probate. They don't avoid taxes. Neither do any other lifetime gifts.

In fact, because of the "time value" of money and the incentive to pay taxes later rather than earlier, it's actually more expensive tax-wise to make a life time gift than to pay inheritance taxes. In other words, if you make a gift this year, you may have to pay taxes on it this year; if you wait till you're dead, the tax will be paid then. That's why wealthy people don't in fact transfer their money to their heirs before deaths (the setting up of a living trust being not considered a completed lifetime transfer until death).

[Cleita]

119. I never said it avoided taxes. It avoids inheritance tax though and probate

or it did back when I worked for a probate attorney in the early sixties in California. I'm sure many of the rules have changed. If I remember correctly there were different kinds of living trusts some of which could go on forever before the tax man could get their hands on gift or inheritance money. Income from the principle of the trust was taxed of course and so were capital gains as well as any money removed from the trust. Wealthy people wouldn't do this if there wasn't a huge advantage to the heirs. I've seen wills that by the time they set up the trusts had nothing left to will except token amounts of doodads and cash. btw trusts are irrelevant to this post anyway. I was just trying to illustrate that there could be some innovative ways to tax wealth instead of wages.

[HamdenRice]

121. It didn't avoid taxes. It avoided fees.

I realize that sounds trivial, but it isn't, especially since the OP is about inheritance taxes.

A living trust is taxed exactly like a will. A life time gift is taxes even worse than money passing by will.

A living trust does avoid the probate court fee, but that's not really a tax. It also helps the wealthy person determine exactly what's going to happen before he dies, so it really is very common for nothing to be left for the will to transfer -- but that's not due to tax avoidance, it's due to having scary children.

:rofl:

In terms of trusts that go on forever, what you are referring to in terms of taxes seems to be the "generation skipping tax" problem. It enabled a first generation trust beneficiary to get taxed on the income of a trust, but not pay estate tax. But on the other hand, he never actually got his hands on the bulk of the money. Eventually Congress passed a "generation skipping tax," which is really too complicated to go into here. Also these could not go on forever (rule against perpetuities limited them to one living and one unborn generation), but recently states, catering to rich people have allowed that.

All that is to say that it isn't difficult to prevent people from avoiding inheritance taxes by giving gifts; the gift tax and generation skipping tax can accomplish that. Several posters suggested it's not possible to prevent life time tax avoidance, but it really isn't very hard if Congress has the will to do so.

[mnhtnbb]

61. Offshore accounts would explode!

[JNelson6563]

65. I appreciate where you're coming from

I do think there is an equitable tax system for this sort of thing but the incentive to be successful and leave something behind for your loved ones to help ease their way should always remain. What exactly that equitable arrangement might be, I'm not sure as it is a pretty complicated thing. I'd consider myself to be open minded on the topic, interested to see what all the possibilities are.

Julie

[MajorChode]

67. I don't believe in the principle of the inheritance tax

The inheritance tax originated because politicians felt that since they couldn't tax the rich during their lifetimes, they would just tax them at death and make up for it. The argument was that you should simply free the rich to make as much money as they possibly can (without being encumbered too much by taxes) and in the end you will get far more back from them. That meaning has been lost through history.

I happen to agree with the Republicans on this one. Get rid of the inheritance tax. It doesn't belong in any reasonable tax scheme. However, when you get rid of it, now you will tax the rich fairly during their lifetime, and by fairly I don't mean the fat junkie's definition of fair. I mean tax non working income (capital gains and dividends) at the same rates as you tax working income (wages). That includes social security taxes also. I also mean a truly progressive tax structure where by the more you make the higher rate you pay.

[HamdenRice]

69. Actually, the main original purpose of the estate tax was not to capture income tax

It was specifically to level the playing field (excluding the short lived inheritance tax during the civil war).

Historically, the estate tax has not been a big revenue producer. Its main purpose was social policy -- enforcing equality of opportunity and preventing the accumulation of vast properties within families, which was thought to be incompatible with democracy.

In fact, historically steep inheritance taxes have usually co-existed with steep income taxes.

[MajorChode]

78. If that was the purpose, why not level the playing field during their lifetime?

As far as I can see, you're saying the same thing I did. The purpose of the inheritance tax was to avoid taxing the rich during their lifetime.

If the case needs to be made that wealth as well as income needs to be taxed, then tax the wealthy's wealth while they are still alive. We already do that in the form of real and personal property taxes that disproportionately affect the poor and middle classes.

[HamdenRice]

91. It has to do with incentives

Low income taxes during lifetime give people an incentive to work hard and especially start businesses. That's at least a conceivable conservative capitalist argument. But since you can't enjoy your wealth after you're dead, low inheritance taxes do not provide such an incentive.

The only incentive is the added incentive of providing for loved ones. But that incentive can be met with enough inheritance to ensure they are OK, and allowing them to be filthy rich is not needed.

That said, I would prefer a system that taxes income at higher rates as well. But even with high income taxes many people are going to succeed and get rich anyway, and at that point, as a matter of social policy, why should their relatives, who did nothing to earn that fortune get the money?

In general, when progressive, populist governments run the show both income and inheritance taxes tend to be high. But as I said, high income taxes are no guarantee that people won't get rich. They should, even paying their fair share in life. Then whatever is left over is taxed again.

[MajorChode]

105. I can't agree with you

I'm not saying you're wrong and I'm right, but here's my argument against what you're saying.

First, all a rich person has to do to avoid inheritance taxes is to transfer the wealth to their heirs during their lifetime. So not only are inheritance taxes easily avoided, I would argue that such transfers make the problem you point out FAR worse (but I'll get to that later).

Next all, low income taxes don't necessarily provide the incentive to work hard, as you claim. Europeans are typically taxed at higher rates than Americans and from what I've seen of Europe, most people work a lot harder.

Here is what the working classes have that's working against them. As they work hard and earn more money, that money is taxed at a higher rate. OK, so taxes are and should be progressive, but the scheme is very much titled against those trying to work their way up. If you have your own business, you pay double the FICA taxes for yourself. So let's say you go from working for someone else, making $30K to owning your own business making $90K. Your marginal tax rate went from 15% to 28% and you're paying 6.2% more FICA. So your rate is somewhere around double or more. That is a crushing blow to anyone trying to work their way up.

Now consider someone who is already independently wealthy and doesn't need to work for anyone. They probably get their income through capital gains and dividends and their tax rate is only 15% period with absolutely no FICA obligations. Someone who has a trust fund given to them by a rich relative is exactly in that situation, and they are taxed at a rate that's as low or even lower than the poorest Americans even if they have a billion dollars.

I don't blame anyone for getting rich and the opportunity should exist for everyone. Furthermore I don't think that path needs to necessarily lie in owning your own business. There's nothing wrong with investing your way into wealth. But the playing field needs to be leveled for everyone.

[HamdenRice]

106. I don't think we disagree on very much

First of all, regarding avoiding taxes through gifts. That's an enforcement/collection issue that has largely been solved. As I've explained several places in this thread, the "inheritance tax" is actually the "estate and gift tax." It treats gifts the same as inheritance. It is almost impossible to avoid the inheritance tax by giving your money away in life. There are some minor, highly technical loopholes, but a progressive administration can close them. In general, it's perfectly easy for the government to capture gifts. If you like, I could explain the gift tax, but how it works really isn't the issue; it exists and generally works.

As for low income taxes, I wasn't saying I was in favor of them, or that they made people work harder; I said it was a plausible argument that conservatives make. My point was that in the past, even when they made that argument, many did not make the argument that inheritance taxes also should be low. I'm just trying to point out that the rationales for low income taxes is different from the rationale for low inheritance taxes (if there even is one).

Payroll taxes like FICA are a separate issue. I agree they are too high. But that doesn't justify low inheritance taxes.

I also agree that capital gains taxes are too low. The progressive alternative is actually kind of counter intuitive and scares people. I would probably have a mob with pitchforks after me if I mentioned it here. But it's called "corporate tax integration." It involved abolishing the corporate tax and capital gains tax altogether and taxing each shareholder's share of corporate profits at a high marginal income tax rate. I doubt this will happen, but in the meantime, capital gains should be taxed as ordinary income. But again, that is not a justification for low inheritance taxes.

[MajorChode]

120. I'm not sure how you can argue for both

I also support corporate tax integration. Tax corporate earnings only once when they are taken out as income. I would go a bit farther in treating all income the same as wages, but that's another matter.

But really the justification for corporate tax integration is taxing income only once, which is fair. However now you're saying that income should be taxed twice through estate and gift tax. So I don't see how you can reasonably support both methods.

[HamdenRice]

122. The second tax is not to the person who earned it

It's to his children who didn't earn it. So it's as though we argued against an income tax for a worker because his corporate employer had paid corporate tax. The child is a different taxpayer than the person who accumulated the wealth.

In general, I agree with respect to tax integration, dividends and all that, they should all be taxed like wages.

But when I learned corp tax integration, there was an even more pressing reason for it than the "twice taxed" issue: it's that corporate lobbyists have so messed up the tax system that corporations make money from corporate taxes.

When Reagan proposed abolishing the corporate tax, corporate lobbyists begged him not to do so because it was so profitable to their clients.

It's disgusting.

[endarkenment]

126. Huge amounts of inherited wealth has never been taxed.

Unrealized capital gains escape taxation when passed on through inheritance. Stocks, bonds, and property - the stuff of real wealth - could be accumulated without taxation from generation to generation to generation, not a good idea in a republic of nominal equals.

100% is extreme. 90% with a COLA exemption on the first couple of million dollars in assets works for me.

The truly wealthy could still shield some of that 90% through the creation of charitable foundations, as they do today, they just could not pass it on as direct assets to their progeny.

Meanwhile, if you have dealt recently with aging parents, you know that their assets are almost completely up for grabs by the state to pay for their long term care. The middle class, which used to be able to shield some assets from medicaid through living trusts, lost that privilege a few years back. We have such concern for the assets of the vastly wealthy while us working stiffs get screwed on a regular basis. Nation of idiots all convinced they are one lotto ticket away from hanging with Gates and Buffet.

[HamdenRice]

88. Presidents against swollen inheritances, for high inheritance tax: Teddy Roosevelt, Hoover and FDR

It's tragic that the ideology of Reaganism has so infiltrated our thinking that if this thread is to believed, most DUers are far more conservative than Herbert Hoover when it comes to taxing inheritance. Note that until recently, the goal of inheritance taxes was social equality, and preventing accumulations of great wealth; raising revenue was a secondary goal, and the federal estate tax has never been a big revenue raiser. Inheritance taxes were a form of social policy.

Here are some positions, comments and quotes by three presidents -- two of them Republicans:


Teddy Roosevelt:

TR wanted confiscatory inheritance taxes on inheritance and said that federal taxes should "put a constantly increasing burden on the inheritance of those swollen fortunes, which it is certainly of no benefit to the country to perpetuate." Roosevelt also said that the inheritance taxes should be directed at "malefactors of great wealth, the wealthy criminal class."

Herbert Hoover

He believed that regardless of how much or little revenue it raised, the estate tax was a moral imperative "one of the most economically and socially desirable—or even necessary of all taxes" to curtail the "evils of inherited economic power."

Hoover also said, “The American people have from the earliest moments been alive to the evils of inherited economic power. Several million dollars is economic power and too often it falls into the hands of persons of little intention to use that power for public benefit either in expansion of enterprise and employment or for public services. It is the breeding ground of playboys and playgirls of morally obnoxious and degenerating character.”

Franklin Delano Roosevelt

FDR explained at great length his beliefs about the importance of the inheritance tax in his 1935 message to Congress asking for steep estate taxes, and one of his important assumptions is that people of great wealth do not make it "on their own," but by the labor of many others.

http://www.treas.gov/education/faq/taxes/historyrooseveltmessage.shtml

<quote>

The movement toward progressive taxation of wealth and of income has accompanied the growing diversification and interrelation of effort which marks our industrial society. Wealth in the modern world does not come merely from individual effort; it results from a combination of individual effort and of the manifold uses to which the community puts that effort. The individual does not create the product of his industry with his own hands; he utilizes the many processes and forces of mass production to meet the demands of a national and international market.

Therefore, in spite of the great importance in our national life of the efforts and ingenuity of unusual individuals, the people in the mass have inevitably helped to make large fortunes possible. Without mass cooperation great accumulations of wealth would 'be 'impossible save by unhealthy speculation. As Andrew Carnegie put it, "Where wealth accrues honorably, the people are · always silent partners." Whether it be wealth achieved through the cooperation of the entire community or riches gained by speculation—in either case the ownership of such wealth or riches represents a great public interest and a great ability to pay.

My first proposal, in line with this broad policy, has to do with inheritances and gifts. The transmission from generation to generation of vast fortunes by will, inheritance, or gift is not consistent with the ideals and sentiments of the American people.

The desire to provide security for oneself and one's family is natural and wholesome, but it is adequately served by a reasonable inheritance. Great accumulations of wealth cannot be justified on the basis of personal and family security. In the last analysis such accumulations amount to the perpetuation of great and undesirable concentration of control in a relatively few individuals over the employment and welfare of many, many others.

Such inherited economic power is as inconsistent with the ideals of this generation as inherited political power was inconsistent with the ideals of the generation which established our Government.

Creative enterprise is not stimulated by vast inheritances. They bless neither those who bequeath nor those who receive. As long ago as 1907, in a message to Congress, President Theodore Roosevelt urged this wise social policy:

"A heavy progressive tax upon a very large fortune is in no way such a tax upon thrift or industry as a like tax would be on a small fortune. No advantage comes either to the country as a whole or to the individuals inheriting the money by permitting the transmission in their entirety of the enormous fortunes which would be affected by such a tax; and as an incident to its function of revenue raising, such a tax would help to preserve a measurable equality of opportunity for the people of the generations growing to manhood."

<HamdenRice comment: Here FDR quotes TR. TR's comment was very, very typical for his time in the sense that he thought that inheritance was not only terrible for society, but terrible for the people inheriting. This was also common thinking at the Harvard Law School, whose faculty, especially John Chipman Gray, launched serious scholarly attack on inheritance in the late 1800s.>

A tax upon inherited economic power is a tax upon static wealth, not upon that dynamic wealth which makes for the healthy diffusion of economic good.

Those who argue for the benefits secured to society by great fortunes invested in great businesses should note that such a tax does not affect the essential benefits that remain after the death of the creator of such a business. The mechanism of production that he created remains. The benefits of corporate organization remain. The advantages of pooling many investments in one enterprise remain. Governmental privileges such as patents remain. All that are gone are the initiative, energy and genius of the creator—and death has taken these away.

I recommend, therefore, that in addition to the present estate taxes, there should be levied an inheritance, succession, and legacy tax in respect to all very large amounts received by any one legatee or beneficiary; and to prevent, so far as possible, evasions of this tax, I recommend further the imposition of gift taxes suited to this end.

Because of the basis on which this proposed tax is to be levied and also because of the very sound public policy of encouraging a wider distribution of wealth, I strongly urge that the proceeds of this tax should be specifically segregated and applied, as they accrue, to the reduction of the national debt. By so doing, we shall progressively lighten the tax burden of the average taxpayer, and, incidentally, assist in our approach to a balanced budget.

The disturbing effects upon our national life that come from great inheritances of wealth and power can in the future be reduced, not only through the method I have just described, but through a definite increase in the taxes now levied upon very great individual net incomes.

[Hannah Bell]

102. Bull, The Roosevelt family's millions went back to the 1600s, through

Chemical Bank, Bank of NY, & slave labor, with stops to marry into other rich families.

They never let go of a dime of the inheritances.

Jaw, jaw, that's what they did.

[HamdenRice]

103. He was called a class traitor

Can you prove his estate did not pay the estate tax he helped impose?

[Hannah Bell]

108. I don't give a damn what he was called. The Roosevelts kept their $$

for hundreds of years. I have no idea what they pay in taxes, but I know they're still richer than 99% of the population, & more of them.

Not that they're any different from any other old wealthy family in that respect.

Rich people don't tax their wealth into non-existence. They create loopholes & shelters for themselves, & tax other people's wealth into non-existence.

[HamdenRice]

111. I used to know one of the "broke" Rockefellers

one of the ones whose share of the family wealth had been so split among cousins and taxed over succeeding generations that he wasn't much more than middle class. The NY Times (or maybe it was NY Magazine) once did a story on the "broke Rockefellers," so I'm not so sure this iron fast rule you state is true.

I didn't know him well. I was in the same graduate school division with him. He had a girlfriend, an exchange student from the People's Republic of China, who was much, much smarter than him and did all his homework. We used to call them Duke and Honey behind their backs after the Doonesbury characters.

[Hannah Bell]

114. and i bet you met the broke rockefeller in an ivy university.

so he weren't so broke as 90% of the population.

"broke" to time mag is "rich" to the bottom 90%.

My point stands, & so does the wealth of the Rockefellers, generated circa 1900, tied to previous family capital & connections before that.

[HamdenRice]

116. Yes, but you've been saying that they don't give up one penny in taxes

that obviously wasn't the case with the broke Rockefellers. But I'll grant that their slide of downward mobility would be enviable to most. It's just that inheritance taxes do indeed work to create equality over the long run.

[Hannah Bell]

130. The Rockefeller dynasty started with 3 brothers. How many folks do the Trust Funds support

today - whether in high or moderate style?

And how much of the Rockefeller billions are socked away in untaxed foundations & trusts, providing jobs & policy-making arms for the Rockefeller heirs?

Plus in layers of obfustacatory holding companies, off-shore investments & banks, etc.


Nope, they get way more than they pay.

[Dreamer Tatum]

90. Then the government would start killing rich people

No, thanks. I don't need another reason to fear Uncle Sam.

[VA4Moran]

94. stuff it

To the rich!!!!

[Manifestor_of_Light]

98. I have not been able to get a job (a decent one or a permanent one) since 1996.

I'm over 40 and the bosses don't give a shit about anyone that's over 40. I have three college degrees including a doctorate in law. Education, skills, experience -- they want to starve us to death. We're useless baby boomers.

The only reason I have a house to live in is because I inherited it, and I'm the only surviving child.

My big sister died a horrible death of brain cancer some years ago. That was hell on earth.

So you'd throw me out on the street just to prove a point about the evils of inherited wealth??


Screw you.

On edit:The estate I inherited is nowhere near $2 million in worth, thank you. Not even anywhere near $1 million.

So I think a tax starting at $2 million is fine. Don't reduce it. Lots of us would be homeless. Besides, I'm going to grow stuff on my land.

[Two Americas]

99. of course

Why would anyone oppose this?

Allowing wealth to accumulate in the hands of a few families has no benefit that I can possibly imagine. That is what is happening now. Is there anything more destructive to society than allowing an aristocracy to arise?

I think it is is an indication of just how weak our democracy has become - where it counts, in the hearts and minds of the people - that anyone would oppose this.

What have the grandchildren and great-grandchildren of successful people done to earn massive privilege and fabulous wealth? Some being born into privilege and wealth diminishes the opportunities for others - always.

[Hannah Bell]

101. only if the rockefellers give up what they passed on through 6 generations

of screwing labor & funding wars, & the forbes give up their opium profits, etc.

no way would i go for that unless the rulers of the world played by the same rules.

which isn't happening.

they'd be happy if everyone else played that way, though.

more for them.

[KillCapitalism]

118. 100% is too extreme for any asset level.

Her's how I'd like to see it:

$50,000,000 or more: 90%
$20,000,000 - $49,999,999: 85%
$5,000,000 - $19,999,999: 80%
$2,500,000 - $4,999,999: 75%
$1,000,000 - $2,499,999: 65%
$750,000 - $999,999: 50%
$500,000 - $749,999: 40%
$250,000 - $499,999: 30%
$150,000 - $249,999: 20%
Under $150,000 - tax exempt.

[Manifestor_of_Light]

129. I'd start taxing at a higher level.

$150K is less than many homes are worth nowadays.

I'd start taxing closer to a million.

Besides, that would take away land for farming as well.

[anonymous171]

142. Tax should start at $250,000 not $150,000

[TheKentuckian]

134. To harsh but 70% above 2-2.5 million would reshuffle the deck a lot

and not take anyone's family business.

[scrinmaster]

136. Stupid idea.

[I814U]

137. "Family" is a fabrication of the religious and the rich...

...to keep "wealth" in their hands.

It sounds good that a man should keep what he makes (capialism) but wherefore the heir? He has produced nothing, he owns merely by accident of birth. They created the facade of marriage to keep property away from those who could earn it by willing it to those who have yet to earn it.

Marriage is a tool of oppression (hint! hint! GLBT crowd). Get rid of--or dilute--marriage and you destroy the cons.

[anonymous171]

143. Marriage as a state institution (not a religious one) helps society.

Also, if you want to get all Marxist, the "religious" are not the ones creating the fabrication. That would be the rich. The rich are the ones that are supposed to have invented religion. Therefore the religious are simply pawns in the Class War, not generals.

[I814U]

147. Exactly my point

Perhaps it's time to de-opiatize (yay! I made a new word) the masses. Not only would we go far in abolishing the myth of private property but we would strike down the notions of humans owning other humans or giving inheritences to those who have done nothing to earn what doesn't exist, i.e. private property.

It would also make debacles such as Prop 8 moot. No more ugly child custody battles because parents no longer have a legal framework to "own" their children. Men could no longer divorce women for refusing to submit to them sexually (I believe the legal term is spousal abandonment, I'm not sure I'm a poli-sci major, not a law school student). It would go far in taking the fangs out of the church.

As for it being secular, societal good. I don't see how that can be maintained considering how many different forms of marriage exist over so many different societies throughout the millenia and the vast majority of them reduce women and children to chattel, but I sense you are a thoughtful reasonable person so I'm genuinely open to hear what you have to say.

[tritsofme]

148. Private property is a myth?

Well you are more than welcome to send all your mythical possessions my way.

[I814U]

149. Yes, a myth.

Who owns the oil in the ground? The oil companies will tell you they own it because they have "property rights" but not without a government to enforce and protect their claim with legislation, police, firefighters and if "need" be: the military. And who owns these insititutions if not The People?

We hold our own leashes.

Translate that to universal healthcare. If The People provide it to themselves at their own expense they must own it. Can you imagine someone saying healthcare is a private property right that they own and may keep to themselves if they so wished?

[tritsofme]

150. I'm not going to play a game like this.

But I will share with you my experience with the kind of men I have encountered that believed private property to be a "myth"

They didn't own any.

[I814U]

151. I have no intention of starting a fight only a dialogue...

...but your comment, "I'm not going to play a game like this" implies you want the last word and that word is composed of personal anecdote and that's saddening; because you appear to have closed your mind...and had bad experience with men (it's OK, I think I once dated that guy too).

Nonetheless, I'm sure many seem to think of their money as "private property". Freepers and corporatists will claim they worked for it and are entitled to their "profits." What they did to obtain this profit was demand others give them money at prices they dictate and if anyone takes without paying the full price dictated the dictator (no pun intended) sends armed agents of the state apparatus after the so-called offender. Conversely, I've also known men that claim there is such a thing as private property and they were corporatists more interested in money than the people they squeeze it out of.

But some men do not have private property--as you noted--but we must ask can society allow them to remain in such a state? When it comes to food, housing, medicine, education and whatever it takes to keep society running can a person say "No, I do ont wish to pay for these things for other people." We answer, no he cannot because we expect him to surrender his income as much as necessary to the good of his fellows. It is his property only insofar as society allows him to keep it balancing tax rates and the institutions of government. At the end of the day a progressive society does not recognize private property only the principle that the needs of the people outweigh claims to property that could not exist unless that same society legislated and protected it.

[leftofthedial]

152. one year's worth of the maximum wage (40X the minimum wage)

can be inherited for free.

Any amount over that taxed at 100%.

Inherited wealth and the creation of the privileged class is anathema to democracy.

[deaniac21]

153. Unless you can perform combat hand rolls on either side in

class V+.

[Incitatus]

154. It sounds like a good way to further destroy the middle class.

I wouldn't be opposed to a 90% on everything above 5 million, or something along those lines, but 100% on all inheritance would cause a lot of harm to middle and working class Americans. It would also kill a lot of small businesses while making corporations even stronger.

[csziggy]

156. Then there would be no point to being anything other than a government or corporate drone

Many people's motivation in starting businesses is to be able to build them and leave something for their descendants. Why bother working your ass off to start a business or own a house if the government will take everything?

[Paladin]

157. No. (n/t)