The Death Tax

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10.27.2021 12:10PM

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10.27.2021 12:10PM

Democrats recent proposal to tax wealth has drawn a lot of criticism lately, much of it I agree with. I have never been a fan of taxing someone based on their worth, especially since most of that is just paper wealth and could never actually be realized.

While much of the idea here is to raise money for democrats proposals, I think the greater problem democrats are trying to get at is how to reduce our massive wealth gap in a way that would benefit all Americans. To me I find the solution to this to be quite simple… significantly raise the estate tax.

Of course every time democrats talk about this it gets shot down after republicans attack it by calling it “the death tax” which sounds awfully spooky. My question is, is there anyone who can provide an actual meaningful defense of not raising estate taxes? I mean if you’re all about personal responsibility and pulling yourself up by your bootstraps, isn’t being rich off of someone else’s money the exact opposite of your stated core philosophy?

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10.27.2021 02:32PM

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@Double_R

What do you think the threshold should be, and what should the tax rate be? Generally speaking, I know you're not writing a policy paper

My question is, is there anyone who can provide an actual meaningful defense of not raising estate taxes?

I'm not super against it but a big part of my opposition comes from something nobody else seems to share, which is that I'm against double taxation. When someone works, their income is taxed. In many states (including mine) if they buy something with that post tax income, it's also taxed. Invest the income wisely, and earn capital gains? Taxed! Save up and buy a house? Property taxes (also, the miniscule interest you get in the bank is taxed!) The idea of saving and investing post tax income wisely, using the fruits of your labor to buy a house with post tax income, being taxed for owning it the entire time, passing it along when you die and having that transaction also be taxed really rubs me the wrong way. Just tax me at a higher rate once and get it out of the way!! But as I said, I don't see too many people making that same complaint so I could just be weird

I also believe generational wealth is a good thing that should be encouraged and not discouraged. I know speaking for myself it's something I want to leave behind, and if I wasn't able to do so I would just stop working as soon as I saved up enough to retire, and no longer contribute to the economy in a meaningful sense. There's also the risk of ruining family businesses and farms, which have lots of high value fixed assets, but that's probably a relatively easy problem to avoid with a well written policy.

#3

n8nrgmi

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n8nrgmi

10.27.2021 02:44PM

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10.27.2021 02:44PM

the only rational approach is to prioritize the estate tax over income tax. you could make the offer of lowering income taxes and increasing estate, and people would still give incoherent reasons to be against that. of course it's better to tax money after you die than money while you are living. and given that unreasonable knee jerk reaction, it will always in the current climate be unfeasible to pass the estate tax, cause peeps will just call it a death tax and you will get attacked for even suggesting it.

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10.27.2021 02:56PM

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10.27.2021 02:56PM

Having not considered the issue very much, my initial response is "Why not cap what you can inherit at some number?" Let's say I'm Jeff BEzos or someone like that, with literally more money than you'd ever be able to spend on yourself, and I have two children. What's a fair number to cap their inheritance at? If I'm worth 25B, is capping it at 5% per named person in the will of my total worth (125M, inclusive of both liquidity and assets) too low somehow? So my wife and both kids get $125M each after I'm gone. To me, that seems like enough of an advantage to give them for all my hard work, $125M. That would leave 24.25B in assets that would either get cut up by the government, or I'd bequeath to various organizations. Are we really going to cry because the scion of some billionaire, who has lived an EXTREMELY privileged life up to the point where his dad died, ONLY gets $125M in cash and assets to start out his adult life? Maybe it's too low, maybe you'd have to have brackets (i.e. if you're worth $500M at your death, you can leave 15% per, and your assets don't count against it like homes, etc.), but there has to be something agreeable in there somewhere. It's not fair to imagine taking ALL of a person's wealth at their death, but there's really no good reason someone can't scrape out a life on a pittance like $300M.

Again, I'm just throwing out numbers, but a cap on personal inheritance seems right at first blush, and lord knows there'd be plenty of workarounds that savvy people would just take advantage of, but in the end, it's important to accomplish what the estate tax nominally sets out to do: prevent or curtail the creation and propagation of a permanent landed gentry class in the US. We don't have nobles, and that's the way I like it.

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10.27.2021 02:57PM

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@thett3

I also believe generational wealth is a good thing that should be encouraged and not discouraged.

According to Investopedia the federal estate tax in the U.S. as it stands now does not apply to any estates worth less than 11.7 million dollars. Even if this was slashed down to half this hardly seems to me like any kind of barrier to the kind of generational wealth that helps working-class people rise in society.

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10.27.2021 03:00PM

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@Discipulus_Didicit

According to Investopedia the federal estate tax in the U.S. as it stands now does not apply to any estates worth less than 11.7 million dollars. Even if this was slashed down to half this hardly seems to me like any kind of barrier to the kind of generational wealth that helps working-class people rise in society.

Yes but the OP is talking about increasing the estate tax

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10.27.2021 03:01PM

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@thett3

That still leaves it at 0% for all estates worth less than 11.7 million dollars, unless they said otherwise.

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10.27.2021 03:05PM

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@Discipulus_Didicit

True, I’m interested to see what he says. $11.7 million is an insane amount of money, at a safe 3.5% withdraw rate you’d get over $400,000 a year.

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10.27.2021 03:11PM

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@thett3

I agree that $11.7 million is a lot. If a family member died and left the family $12.7 million in their will to split up I would have no problem paying a high tax rate on that extra million, but that is coming from me as a person that has worked for a living all my life so I am a bit biased.

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10.27.2021 03:55PM

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@thett3

Democrats have been supposedly taxing the rich for 50 years now. If they haven't figured out how to do it by now, they need to be replaced by the new AOC crowd that can.

#11

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10.27.2021 04:05PM

My problem with a death tax is someone's already paid taxes on that. Basically the government saying is because it's transferring from one person to another you should pay taxes on it again because you didn't pay taxes on it. Inheritance is not the same as income it just isn't. I get so sick of people feeling like because someone has a certain amount of money they should have to give it to someone else especially the f****** government.

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10.27.2021 04:15PM

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@Polytheist-Witch

My problem with a death tax is someone's already paid taxes on that. Basically the government saying is because it's transferring from one person to another you should pay taxes on it again because you didn't pay taxes on it. Inheritance is not the same as income it just isn't. I get so sick of people feeling like because someone has a certain amount of money they should have to give it to someone else especially the f****** government.

The cornerstone of any enduring society is to punish productive people and reward unproductive people.

#13

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10.27.2021 04:16PM

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@Polytheist-Witch

I get so sick of people feeling like because someone has a certain amount of money they should have to give it to someone else especially the f****** government.

Don't you get sick of people being born on third base and thinking they hit a triple, though? Why should your parents or grandparents success automatically be YOUR success? This is sort of the other side of the looking glass argument. You don't have to give your money to anyone at all, you can literally just die and have it divided by the courts, but once you're dead, it's no longer YOUR MONEY, as you no longer exist.

In theory, knowing you have a hefty estate tax where you will have no control (because you're dead) with what happens to your money, then you'd do a better job of spending it in this lifetime on things that you support, or projects you find important. Knowing that you can only leave 5% of your 50B dollars to your family would mean, to some, that maybe you can take 1B and I don't know, build and fund a hospital somewhere there isn't adequate healthcare, and name it after yourself. Maybe you decide you want to set up a grant for struggling farmers with 1B. Why not? You can't take it with you, and your kids can't have it, so rather than give it to the tax man after you're gone, spend it on non-assets and give back to the country that you succeeded so wildly in.

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@ludofl3x

Don't you get sick of people being born on third base and thinking they hit a triple, though?

I wish Americans could learn the social value of eliminating jealousy from their lives like Norway has.

Knocking down people has never created prosperity for anyone, just a wasteland of thieves and looters.

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10.27.2021 04:40PM

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@Greyparrot

I wish Americans could learn the social value of eliminating jealousy from their lives like Norway has.

So no one in Norway is jealous of each other?!? Truly a paradise, except for the part where it's Hoth by climate and chock full of socialized welfare programs!

Knocking down people has never created prosperity for anyone, just a wasteland of thieves and looters.

Is this how you see America? A wasteland of thieves and looters?

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10.27.2021 05:04PM

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@ludofl3x

So no one in Norway is jealous of each other?!?

The ten rules state:

You're not to think you are anything special.
You're not to think you are as good as we are.
You're not to think you are smarter than we are.
You're not to imagine yourself better than we are.
You're not to think you know more than we do.
You're not to think you are more important than we are.
You're not to think you are good at anything.
You're not to laugh at us.
You're not to think anyone cares about you.
You're not to think you can teach us anything.

#17

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10.27.2021 05:12PM

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10.27.2021 05:12PM

It's nobody's business what I do with my f****** money or how I want my f****** money spent when I die. If I worked so my kids wouldn't have to work as hard as me f*** you it's not any of your goddamn business. And it's especially not the governments. I'm sick of people acting like people with money don't deserve to have it because they have more than they need that is BS. You get what you get and you earn what you earn no matter the circumstances do I think people that are poor should have the opportunity to make more money or have a living wage hell yes. Do I think the Rockefeller should get to pass their money down to their kids without their kids having to pay the tax on it when it's already had the tax paid on it several times hell yes. It cracks me up the most because it's okay for certain people to be rich but not okay for other people to be rich. Nobody ever brings up Bill Gates when people talk about people having more money than they freaking ever need. Or Nancy Pelosi or the Clintons or Joe Biden or anybody in Hollywood or any athletes. It's always businessmen or conservatives. That's why I don't buy your bull crap.

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@Polytheist-Witch

If there was truth in naming, the Death tax would be called the jealous tax.

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@Polytheist-Witch

@Greyparrot

Nobody ever brings up Bill Gates when people talk about people having more money than they freaking ever need. Or Nancy Pelosi or the Clintons or Joe Biden or anybody in Hollywood or any athletes. It's always businessmen or conservatives. That's why I don't buy your bull crap.

I'm happy to include Bill Gates, the name doesn't matter to me, it's more about the number. How much are Pelosi and the Clintons or Joe Biden worth? Tens of billions seems like a bit of an overestimation. And actors and athletes are by vast, vast, vast percentage not billionaires.

f there was truth in naming, the Death tax would be called the jealous tax.

Or the anti-nobility tax.

Topic's author

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@thett3

What do you think the threshold should be, and what should the tax rate be? Generally speaking, I know you're not writing a policy paper

I would start the tax on estates worth about $5M (which is where is was before the Trump tax cuts) and make it progressive after that. Maybe 20% on the next $5M, 40% after that, etc. I wouldn’t cap it till like 80 or maybe even 90%.

I'm not super against it but a big part of my opposition comes from something nobody else seems to share, which is that I'm against double taxation.

But it’s not double taxation. You would be dead so the people who stand to inherit your estate are paying it, which makes sense since they’re about to be given a whole bunch of money which is when taxes always kick in.

I also believe generational wealth is a good thing that should be encouraged and not discouraged.

How is it a good thing for wealth to be enjoyed by people who didn’t earn it? Isn’t that the complete opposite of conservative principals?

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#21

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10.27.2021 05:36PM

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@Greyparrot

The cornerstone of any enduring society is to punish productive people and reward unproductive people.

How did you manage to qualify the inheritors of someone else’s fortune as “productive people”?

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10.27.2021 05:46PM

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@Double_R

I would start the tax on estates worth about $5M (which is where is was before the Trump tax cuts) and make it progressive after that. Maybe 20% on the next $5M, 40% after that, etc. I wouldn’t cap it till like 80 or maybe even 90%.

Ahh okay that’s not really too objectionable in my mind then. A lot of European countries have inheritance taxes starting at like $300,000 or so which I think is way too low a cut off. I don’t think I would go up to 80% but a progressive structure wouldn’t be the worst thing in the world. It’s certainly a way better idea than a wealth tax

How is it a good thing for wealth to be enjoyed by people who didn’t earn it? Isn’t that the complete opposite of conservative principals?

Well now that I know what your proposed threshold is my comment doesn’t really apply. What I mean isn’t that it’s a good thing for Elon Musks children to inherit $50 billion tax free. Rather that it’s good for a worker who saved and invested his entire life to be able to leave behind a sizable estate of one or two million dollars without the government coming in and taking a bite.

#23

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10.27.2021 05:49PM

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@thett3

What I mean isn’t that it’s a good thing for Elon Musks children to inherit $50 billion tax free. Rather that it’s good for a worker who saved and invested his entire life to be able to leave behind a sizable estate of one or two million dollars without the government coming in and taking a bite.

I think we've found common ground. I don't even think two million dollars is high enough, to be honest, but it's encouraging to at least see we can agree on stuff.

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@Polytheist-Witch

do I think people that are poor should have the opportunity to make more money or have a living wage hell yes. Do I think the Rockefeller should get to pass their money down to their kids without their kids having to pay the tax on it when it's already had the tax paid on it several times hell yes

You’re trying to have your cake and eat it too.

In a capitalistic society such as the one we live in, wealth begets wealth. In other words the more money you have the easier it is to make money. You want to open up a McDonald’s? They won’t even consider helping you unless you have $5M dollars set to the side, so that opportunity just like many others only exist for the well off.

It’s not an accident that as time passes the gap between the wealthy and the poor continues to grow. That’s how capitalism works. The only way to intercede without “punishing success” is through the estate tax to stop generations from building onto the wealth of prior generations while the poor and middle classes get squeezed out entirely. You can’t claim everyone should have a reasonable opportunity to succeed and be for the prevalence of generational wealth, those two things are in direct conflict with eachother.

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@thett3

Since corporations never die, there is no death tax for the rich that consolidate their wealth into corporations, which is why Hunter Biden didn't have to pay $250,000 in taxes for a etch-a-sketch.

#26

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The death tax doesn't go to poor people it goes to the f****** government who keep those people in poverty so don't give me that crap. That somehow taking money from Bill Gates is going to end up in the hands of the poor it won't it'll end up in the hands of the government and they'll still decide who gets what.

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@ludofl3x

Or the anti-nobility tax.

Or the anti-too-stupid-to-incorporate-wealth tax.

There's a reason death taxes don't generate much revenue.

If you really wanna steal from the rich, go buy a gun and a mask. You don't have to wait on the government. I hear they don't even prosecute in most blue states for armed robbery.

Topic's author

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@Polytheist-Witch

The death tax doesn't go to poor people it goes to the f****** government who keep those people in poverty

How does the government keep people in poverty?

That somehow taking money from Bill Gates is going to end up in the hands of the poor it won't it'll end up in the hands of the government and they'll still decide who gets what.

So the money won’t end up in the hands of the people, it’ll end up in the hands of the government who will decide who’s hands it ends up in…

Uh, yeah. Taking out that first part which made absolutely no sense, that’s how it works. That’s how it’s supposed to work.

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#29

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@Greyparrot

Since corporations never die, there is no death tax for the rich that consolidate their wealth into corporations, which is why Hunter Biden didn't have to pay $250,000 in taxes for a etch-a-sketch.

Why is the political right so obsessed with Hunter Biden?

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