Estate Taxation and Social Responsibility

You're getting rather interpretive there, Boss--who spoke of redistributing wealth?

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Cyc for one.

I don't think it is that much of a stretch to suggest that taxing the rich more because they have more is a form of weath redistribution.

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Re: Estate Taxation and Social Responsibility

Cycloptichorn wrote:

I believe that we need some re-distribution of wealth in our society in order for America to continue on safely.

Cycloptichorn

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Among the demographics most negatively impacted by the estate tax is the family farm, and right behind family farms is the sole-proprietor small business. Of course, those are rich folks, riding on the backs of the oppressed proletariat, so stick it to 'em, right? I mean, after all, who really needs or deserves to own and pass on intact to surviving family hundreds of acres of tillable land, or a warehouse full of inventory, and all the associated structures and equipment - why, the way some folks carry on, you'd think farming, entrepreneurship, and personal initiative were somehow important to the nation or something.

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jpinMilwaukee wrote:

All this talk of redistribution of wealth just makes me wonder if anyone ever puts their money where their mouth is?

All taxes involve a redistribution of wealth. In the good old days, wealth was transferred from the poor to the rich. With the introduction of progressive income taxes, the trend has been to redistribute the wealth from the rich to the poor.

If you don't like schemes that aim to redistribute wealth, then you should oppose all forms of taxation.

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Among the demographics most negatively impacted by the estate tax is the family farm

Bullcrap. This is an oft-repeated lie by those looking to repeal the estate tax.

The fact is that the demographic most negatively impacted by the estate tax is the super rich. The percentage of small business and family farms caught up in this is tiny compared to the amount of super rich who are affected by this tax - 100% of those people pay.

The vast majority of monies taken in are from the top 1% wealthy. Any other stat thrown up there is merely a smokescreen.

Want to protect those family farms? Raise the exemption amount to 4 or 5 million, and almost zero of the family farms and small businesses will be affected, without sacrificing a cent of the monies from the super rich.

Cycloptichorn

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That is above and beyond the scope of discussion, Joe. I am not suggesting that taxes be abolished. However, some people are suggesting that those with more should have to redistribute more of their wealth in comparison to others for the simple reason of they have more. I bet you make a fairly decent living as a lawyer... have you ever sent the government more than they require?

ps... To bad about your firstbaseman... tough break in more than one way.

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JP wrote:

Quote:

Cyc for one.

I don't think it is that much of a stretch to suggest that taxing the rich more because they have more is a form of weath redistribution.

Yes, i missed that. I don't infer, however, that all taxation must necessarily equate with the redistribution of wealth. Joe has made a good point about taxation in general. Additionally, most taxes we encounter are regressive--after all, we pay our income taxes but once a year, but we pay sales tax and excises virtually every day. If two men each spend $3000 for gasoline to drive to work, the man earning $30,000 per annum has paid 10% of his income for gasoline, while the man earning $300,000 has paid but 1%. This is one reason that i find appeals for a flat tax rate hypocritical, as well as the plethora of trust, tax-free debentured annuities, and inheritance exclusions which give the wealthy an opportunity to protect their estates in ways which are not available to the mere "wage slave."

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JP:

Quote:

Cyc for one.

I don't think it is that much of a stretch to suggest that taxing the rich more because they have more is a form of weath redistribution.

It is a form of wealth redistribution. And rightly so.

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How many people here have ever given the government more than their required tax amount or ever sent back a tax return check because they have a "greater responsibility to society"?

Even though my roomate is an accountant, I don't cheat on my taxes in the ways he suggests I do. Of course, by cheat I mean 'exploit loopholes,' a perfectly legal and morally correct course for most people apparently; but not one I agree with.

Cycloptichorn

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timberlandko wrote:

Among the demographics most negatively impacted by the estate tax is the family farm, and right behind family farms is the sole-proprietor small business.

That is simply not true.

Estate Tax Malarkey:
Far from imposing tax bills on farms and businesses that "cost them everything," the average estate tax paid by all farm and business estates in 2004 was just under 20 percent of the value of the estate, according to calculations by the Tax Policy Center.

The effective rate was far less for smaller estates. Of the 440 taxable family farm and business estates in 2004, two out of five paid an average rate of only 1.6 percent. These were taxable estates valued at less than $2 million.Very large estates valued at over $20 million paid at an average effective rate of just over 22 percent, a hefty tax bite but well short of "everything."

Estate Tax Myths (Washington Post: reg. req'd)
A new study by the Congressional Budget Office examined estate tax returns filed by farmers and owners of small businesses in 1999 and 2000. The numbers that owed estate tax, the CBO found, were paltry, and the number without enough cash on hand to pay the bill even punier: In 2000, for example, just 1,659 farm estates had taxes due, of which 138 didn't report enough liquid assets to cover their tax liability.

Few Wealthy Farmers Owe Estate Taxes, Report Says (NY Times: reg. req'd)
The number of farms on which estate tax is owed when the owners die has fallen by 82 percent since 2000, to just 300 farms, as Congress has more than doubled the threshold at which the tax applies, the Congressional Budget Office said in a report released last week.

All but 27 farmers left enough liquid assets to pay taxes owed, the budget office found, although it hinted that the actual number might be zero. The study examined how much in cash, stocks and bonds these farmers left to pay estate taxes, but the report noted that no data existed on how much life insurance the farmers had put into trusts. Virtually all wealthy farmers own life insurance in trusts, say estate tax lawyers who specialize in working with farmers.

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Setanta wrote:

f two men each spend $3000 for gasoline to drive to work, the man earning $30,000 per annum has paid 10% of his income for gasoline, while the man earning $300,000 has paid but 1%. This is one reason that i find appeals for a flat tax rate hypocritical, as well as the plethora of trust, tax-free debentured annuities, and inheritance exclusions which give the wealthy an opportunity to protect their estates in ways which are not available to the mere "wage slave."

I'm not sure why this is an issue. The only way to make everything equal is to make incomes equal. We all know this will never happen.

People with more have more and are able to do more... why is this such a bad thing?

Sure is sucks that Joe Blow is spending a higher percentage of his income on gas in comparison to Joe Millionaire, but how is that Joe Millionaires fault and why should he have to pay for it?

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jpinMilwaukee wrote:

That is above and beyond the scope of discussion, Joe. I am not suggesting that taxes be abolished. However, some people are suggesting that those with more should have to redistribute more of their wealth in comparison to others for the simple reason of they have more.

The taxpayers aren't the ones redistributing the wealth. The government is the one that's doing the redistributing.

On the other hand, if what you're saying is that some people want the wealthy to pay more in taxes because they're wealthy, I would agree with that. What's wrong with making the wealthy pay more in taxes?

jpinMilwaukee wrote:

I bet you make a fairly decent living as a lawyer... have you ever sent the government more than they require?

I'm pretty sure I have.

jpinMilwaukee wrote:

ps... To bad about your firstbaseman... tough break in more than one way.

We survived Corey Patterson, we'll survive this.

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Cycloptichorn wrote:

Even though my roomate is an accountant, I don't cheat on my taxes in the ways he suggests I do. Of course, by cheat I mean 'exploit loopholes,' a perfectly legal and morally correct course for most people apparently; but not one I agree with.

Cycloptichorn

So you are sending in your required amount. Ever send in more? Why should others be expected to do so?

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JP wrote:

Quote:

I'm not sure why this is an issue. The only way to make everything equal is to make incomes equal. We all know this will never happen.

You seem obsessed with this notion, and it is not something which i, at least, have advanced.

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People with more have more and are able to do more... why is this such a bad thing?

People who have more benefit more from the quality of the systems under which they live. In the United States, there are good transportation systems and highways, good safety services (police, fire), good systems to prevent securities fraud, product fraud and all garden varieties of fraud, there are efficient governmental agencies (for whatever one might justifiably allege about corruption and fraud anecdotally) at local and higher levels--all of which mitigate in favor of those who earn their livings by investing capital in large amounts. The larger the amount of capital for investment, the greater the earnings which can be realized due to economies of scale. Those who have more should pay more because they benefit more. Is that such a bad thing?

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Sure is sucks that Joe Blow is spending a higher percentage of his income on gas in comparison to Joe Millionaire, but how is that Joe Millionaires fault and why should he have to pay for it?

I've not said it is Joe Millionaire's fault, and i've not said that he should pay more for it. I'm simply pointing out that as sales taxes and excises are regressive and inherently unfair, those who call for flat rate taxation of income, and complain about higher taxes for the wealthy, are being disingenuous in such a discussion, or have not thought through the issues. I have a great example for you--capital gains tax. If i buy a painting for
$100,000, and sell it twenty years later for $1,000,000, why should i get a break on my capital gain? Same for earning my income from securities investment, why should i have an tax advantage over those who simply sweated for the last twenty years to make their $900,000?

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joefromchicago wrote:

If what you're saying is that some people want the wealthy to pay more in taxes because they're wealthy, I would agree with that. What's wrong with making the wealthy pay more in taxes?

Yes that is what I am refering to. Business owners and entrepreneur take risks that normal wage earning workers do not take. If the risk and capital invested works out to their advantage they should get rewarded for their effort not taxed to death simply because they had the initiative to do more than the average worker.

joefromchicago wrote:

I'm pretty sure I have.

Intentionally and willingly?

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Setanta wrote:

JP wrote:

Quote:
I'm not sure why this is an issue. The only way to make everything equal is to make incomes equal. We all know this will never happen.

You seem obsessed with this notion, and it is not something which i, at least, have advanced.

You raised the issue of percentage of income spent on travel. I meerely pointed out that the only way this would ever be equal was if everyone had equal income. I did not mean to suggest that you were advocating that... just merely questioning the validity of it.

Setanta wrote:

People who have more benefit more from the quality of the systems under which they live. In the United States, there are good transportation systems and highways, good safety services (police, fire), good systems to prevent securities fraud, product fraud and all garden varieties of fraud, there are efficient governmental agencies (for whatever one might justifiably allege about corruption and fraud anecdotally) at local and higher levels--all of which mitigate in favor of those who earn their livings by investing capital in large amounts. The larger the amount of capital for investment, the greater the earnings which can be realized due to economies of scale. Those who have more should pay more because they benefit more. Is that such a bad thing?

I answered that in my response to Joe

Setanta wrote:

I've not said it is Joe Millionaire's fault, and i've not said that he should pay more for it. I'm simply pointing out that as sales taxes and excises are regressive and inherently unfair, those who call for flat rate taxation of income, and complain about higher taxes for the wealthy, are being disingenuous in such a discussion, or have not thought through the issues.

On items of neccesity Joe Blow may pay more percent of his income but on non-necessary items Joe Millionaire pays more than Joe Blow because he buys more... is this unfair too?

Setanta wrote:

I have a great example for you--capital gains tax. If i buy a painting for $100,000, and sell it twenty years later for $1,000,000, why should i get a break on my capital gain? Same for earning my income from securities investment, why should i have an tax advantage over those who simply sweated for the last twenty years to make their $900,000?

Anybody can take advantage of the capital gains tax. I am about to sell my house and the amount of money I hope to make on it, while pocket change to some, will be infinitely helpful to me, a lower middle class hard working Joe Blow. The reason I can use that tax advantage is because I invested. Anyone had the opportunity to buy the same house I did, but I am the one that made the investment and took the risk. A heavy capital gains tax would decrease my profit and seriously hamper my ability to better life for me and my family. This isn't only something the super rich can take advantage of.

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jpinMilwaukee wrote:

How many people here have ever given the government more than their required tax amount or ever sent back a tax return check because they have a "greater responsibility to society"?

All this talk of redistribution of wealth just makes me wonder if anyone ever puts their money where their mouth is?

"Fair" is someone else paying more than me. Thanks for proving my point jp.

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jpinMilwaukee wrote:

Yes that is what I am refering to. Business owners and entrepreneur take risks that normal wage earning workers do not take. If the risk and capital invested works out to their advantage they should get rewarded for their effort not taxed to death simply because they had the initiative to do more than the average worker.

They are rewarded for their effort. Their reward is usually in the form of money. That a certain percentage of that money is turned over to the government in the form of taxes has not significantly affected the levels of entrepreneurship over the last century or so. Even when the top tax rate was 92%, people started businesses.

jpinMilwaukee wrote:

joefromchicago wrote:

I'm pretty sure I have.

Intentionally and willingly?

I am quite sure that I have not taken advantage of every single tax benefit available to me. In large part, that's because I'm lazy and unwilling to do the research, and I'm a procrastinator and so I usually don't have time to consult with a tax accountant. I suppose, in the grand scheme of things, that my behavior is intentional. I place a higher value on some things than on money, including the money that I send to the government.

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parados wrote:

jpinMilwaukee wrote:
How many people here have ever given the government more than their required tax amount or ever sent back a tax return check because they have a "greater responsibility to society"?

All this talk of redistribution of wealth just makes me wonder if anyone ever puts their money where their mouth is?

"Fair" is someone else paying more than me. Thanks for proving my point jp.

I'm not sure where you are reading that... but go right on ahead and knock you socks off.

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joefromchicago wrote:

They are rewarded for their effort. Their reward is usually in the form of money. That a certain percentage of that money is turned over to the government in the form of taxes has not significantly affected the levels of entrepreneurship over the last century or so. Even when the top tax rate was 92%, people started businesses.

I wasn't suggesting that it would hamper entrepreneurship. What I was suggesting is that they should be able to keep their share of that reward... same as everyone else.

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