I wanted to start a discussion on this, as this has been bugging me for a few years now but it does not seem anyone (even socialists/leftists) tend to use this argument - and this is about taxation of different sources of income and ethics involved in judging such sources of income.
What I mean by that is this.
Let's assume in 2016, I earn $300,000.
$100,000 comes from my work/paycheck.
$100,000 comes from the rate of return on my capital (say, I am letting my properties, buying and selling shares etc.).
$100,000 comes from inheritance.
Now, I am willing to bet that in most legal systems I will pay the highest tax on the work/paycheck income, moderate tax on the capital income and the lowest (or no tax) on the inheritance.
Shouldn't this be exactly the opposite though? Surely, work of our own hands should be treated more preferentially than income that comes to me only by virtue of birth, which involves no actual effort on my part (with income from capital falling somewhere in the middle).
Not this inheritance tax shit again. There is NOTHING turning everyone into the drones read about in 1984 than the idea of punitive inheritance taxes.
The ONLY moral tax is either an income tax OR a VAT, i.e. taking your income, and taxing it at one point in its existence.
The BS done where first you are taxed when its your income, then when you spend it, then some more when you spend it on some specific shit (like fuel), then once you earn interest after saving what's left of it, and then finally when you have enough of it all and crook up and leave it to your kid - well, that may be necessary to maintain modern states, but it is pretty far from fair and moral.
Cool, I get taxed extra on money I earn from working so some trustafarian twat doesn't have to pay any tax on money his great uncle Albert inherited from his great aunt Petunia.
Well as long as that's the only moral way.
Quote from: Tamas on October 19, 2016, 09:15:14 AM
Not this inheritance tax shit again. There is NOTHING turning everyone into the drones read about in 1984 than the idea of punitive inheritance taxes.
The ONLY moral tax is either an income tax OR a VAT, i.e. taking your income, and taxing it at one point in its existence.
The BS done where first you are taxed when its your income, then when you spend it, then some more when you spend it on some specific shit (like fuel), then once you earn interest after saving what's left of it, and then finally when you have enough of it all and crook up and leave it to your kid - well, that may be necessary to maintain modern states, but it is pretty far from fair and moral.
The money you get paid for your work has been taxed already too. When I pay my cleaning lady, she is getting paid from the money I already paid tax on. The argument that it is somehow different with inheritance is spurious.
If my dad has $100 and in scenario one he pays me that money for some service I performed for him, and in scenario two he dies and I get this money for free, why should I pay more taxes in the former than in the latter case?
What does morality have to do with it?
Quote from: Gups on October 19, 2016, 09:21:11 AM
Cool, I get taxed extra on money I earn from working so some trustafarian twat doesn't have to pay any tax on money his great uncle Albert inherited from his great aunt Petunia.
Well as long as that's the only moral way.
You are looking at that money as if it materialised out of nothing when your trustafarian received it. It was already taxed when aunt Petunia got it so why not let her do whatever she wants with it.
Taxing that is the same idea as taxing pocket money you give to your kids. Or buying a round of beer for your mates.
Quote from: Tamas on October 19, 2016, 09:15:14 AM
There is NOTHING turning everyone into the drones read about in 1984 than the idea of punitive inheritance taxes. \
What ?? :huh:
Quote from: Tamas on October 19, 2016, 09:25:04 AM
Quote from: Gups on October 19, 2016, 09:21:11 AM
Cool, I get taxed extra on money I earn from working so some trustafarian twat doesn't have to pay any tax on money his great uncle Albert inherited from his great aunt Petunia.
Well as long as that's the only moral way.
You are looking at that money as if it materialised out of nothing when your trustafarian received it. It was already taxed when aunt Petunia got it so why not let her do whatever she wants with it.
Only if she earnt it. What if she got lucky when her farm land got planning permission for residential development?
Quote from: The Minsky Moment on October 19, 2016, 09:24:29 AM
What does morality have to do with it?
Well, the way I see it taxation should at least not run contrary to general morality. That's why the sales tax on jewellery, cigarettes and booze is usually higher than one on food, children clothes and books.
Quote from: Martinus on October 19, 2016, 09:24:01 AM
Quote from: Tamas on October 19, 2016, 09:15:14 AM
Not this inheritance tax shit again. There is NOTHING turning everyone into the drones read about in 1984 than the idea of punitive inheritance taxes.
The ONLY moral tax is either an income tax OR a VAT, i.e. taking your income, and taxing it at one point in its existence.
The BS done where first you are taxed when its your income, then when you spend it, then some more when you spend it on some specific shit (like fuel), then once you earn interest after saving what's left of it, and then finally when you have enough of it all and crook up and leave it to your kid - well, that may be necessary to maintain modern states, but it is pretty far from fair and moral.
The money you get paid for your work has been taxed already too. When I pay my cleaning lady, she is getting paid from the money I already paid tax on. The argument that it is somehow different with inheritance is spurious.
I was mainly referring to the idea that you were no doubt going for here, your fixation on a near-100% inheritance tax.
But even without that, inheritance tax, in the normal world, is usually a big burden for average families, where inheritance is one lousy property, and they have to cough up the sizeable money after its theoretical market value, especially when they don't want to sell it.
Quote from: Martinus on October 19, 2016, 08:58:40 AM
I wanted to start a discussion on this, as this has been bugging me for a few years now but it does not seem anyone (even socialists/leftists) tend to use this argument - and this is about taxation of different sources of income and ethics involved in judging such sources of income.
What I mean by that is this.
Let's assume in 2016, I earn $300,000.
$100,000 comes from my work/paycheck.
$100,000 comes from the rate of return on my capital (say, I am letting my properties, buying and selling shares etc.).
$100,000 comes from inheritance.
Now, I am willing to bet that in most legal systems I will pay the highest tax on the work/paycheck income, moderate tax on the capital income and the lowest (or no tax) on the inheritance.
Shouldn't this be exactly the opposite though? Surely, work of our own hands should be treated more preferentially than income that comes to me only by virtue of birth, which involves no actual effort on my part (with income from capital falling somewhere in the middle).
Inheritance income is not taxable in the hands of the receiver because it is taxed in the hands of the deceased, on the day of his death.
Should there be more tax on high fortunes, to avoid recreating a form of aristocracy? Most likely. Should we eliminate loopholes that let richer people avoid taxes, unlike the middle class? Certainly!
Should you be taxed again at 50% of the money you receive? No, absolutely not.
Quote from: Tamas on October 19, 2016, 09:25:04 AM
You are looking at that money as if it materialised out of nothing when your trustafarian received it. It was already taxed when aunt Petunia got it so why not let her do whatever she wants with it.
Every dollar of income I make is paid by business who previously paid tax on that money. When I spend it at the store it gets taxed again, and it gets taxed again when the store pays its employees and suppliers and so on and so on. The very structure of a system of taxation presumes that circulating flows of money and income will be subject to tax multiple times.
LOL! "The only moral taxes..." is the dumbest bumper-sticker idea ever.
People have a moral obligation to pay the taxes they owe. taxes cannot be moral or immoral because they are not people, and it is people who have morals (maybe some animals as well, but that is controversial).
I agree with Marti that, from the standpoint of society, it makes the most sense to tax most highly the income from sources that are least distorted by taxes. Inheritance pretty much tops that list, since dead people cannot change their behavior based on the taxes their estate must pay after death. Gifts are second. Earned income is last, because we want people to earn income by producing goods and services.
Quote from: Tamas on October 19, 2016, 09:25:04 AM
Quote from: Gups on October 19, 2016, 09:21:11 AM
Cool, I get taxed extra on money I earn from working so some trustafarian twat doesn't have to pay any tax on money his great uncle Albert inherited from his great aunt Petunia.
Well as long as that's the only moral way.
You are looking at that money as if it materialised out of nothing when your trustafarian received it. It was already taxed when aunt Petunia got it so why not let her do whatever she wants with it.
Taxing that is the same idea as taxing pocket money you give to your kids. Or buying a round of beer for your mates.
It doesn't matter. The trustafarian is a different person - what taxes aunt Petunia paid on it is irrelevant.
As I said already, my firm has already been taxed on the money they pay me for my work. I am already taxed on the money I pay my cleaning lady for her work. This is not a good argument.
Quote from: Tamas on October 19, 2016, 09:27:47 AM
Quote from: Martinus on October 19, 2016, 09:24:01 AM
Quote from: Tamas on October 19, 2016, 09:15:14 AM
Not this inheritance tax shit again. There is NOTHING turning everyone into the drones read about in 1984 than the idea of punitive inheritance taxes.
The ONLY moral tax is either an income tax OR a VAT, i.e. taking your income, and taxing it at one point in its existence.
The BS done where first you are taxed when its your income, then when you spend it, then some more when you spend it on some specific shit (like fuel), then once you earn interest after saving what's left of it, and then finally when you have enough of it all and crook up and leave it to your kid - well, that may be necessary to maintain modern states, but it is pretty far from fair and moral.
The money you get paid for your work has been taxed already too. When I pay my cleaning lady, she is getting paid from the money I already paid tax on. The argument that it is somehow different with inheritance is spurious.
I was mainly referring to the idea that you were no doubt going for here, your fixation on a near-100% inheritance tax.
But even without that, inheritance tax, in the normal world, is usually a big burden for average families, where inheritance is one lousy property, and they have to cough up the sizeable money after its theoretical market value, especially when they don't want to sell it.
Defend your own position in post #2. It either stands or falls on its own merits not in relation to a straw man.
Quote from: Martinus on October 19, 2016, 09:24:01 AM
Quote from: Tamas on October 19, 2016, 09:15:14 AM
Not this inheritance tax shit again. There is NOTHING turning everyone into the drones read about in 1984 than the idea of punitive inheritance taxes.
The ONLY moral tax is either an income tax OR a VAT, i.e. taking your income, and taxing it at one point in its existence.
The BS done where first you are taxed when its your income, then when you spend it, then some more when you spend it on some specific shit (like fuel), then once you earn interest after saving what's left of it, and then finally when you have enough of it all and crook up and leave it to your kid - well, that may be necessary to maintain modern states, but it is pretty far from fair and moral.
The money you get paid for your work has been taxed already too. When I pay my cleaning lady, she is getting paid from the money I already paid tax on. The argument that it is somehow different with inheritance is spurious.
If my dad has $100 and in scenario one he pays me that money for some service I performed for him, and in scenario two he dies and I get this money for free, why should I pay more taxes in the former than in the latter case?
There is no double taxation here.
The money you get, your corporation is taxed at a much lower rate than you are. And they get to reduce their taxable income by whatever they paid you. So that portion of the money was never taxed.
Quote from: Gups on October 19, 2016, 09:27:28 AM
Quote from: Tamas on October 19, 2016, 09:25:04 AM
Quote from: Gups on October 19, 2016, 09:21:11 AM
Cool, I get taxed extra on money I earn from working so some trustafarian twat doesn't have to pay any tax on money his great uncle Albert inherited from his great aunt Petunia.
Well as long as that's the only moral way.
You are looking at that money as if it materialised out of nothing when your trustafarian received it. It was already taxed when aunt Petunia got it so why not let her do whatever she wants with it.
Only if she earnt it. What if she got lucky when her farm land got planning permission for residential development?
Are you suggesting we should have the state making sure nobody rises above others financially based on "luck"?
Quote from: grumbler on October 19, 2016, 09:29:05 AM
LOL! "The only moral taxes..." is the dumbest bumper-sticker idea ever.
People have a moral obligation to pay the taxes they owe. taxes cannot be moral or immoral because they are not people, and it is people who have morals (maybe some animals as well, but that is controversial).
I agree with Marti that, from the standpoint of society, it makes the most sense to tax most highly the income from sources that are least distorted by taxes. Inheritance pretty much tops that list, since dead people cannot change their behavior based on the taxes their estate must pay after death. Gifts are second. Earned income is last, because we want people to earn income by producing goods and services.
The second part of your post essentially argues morality from the utilitarian standpoint.
Quote from: viper37 on October 19, 2016, 09:30:39 AM
Quote from: Martinus on October 19, 2016, 09:24:01 AM
Quote from: Tamas on October 19, 2016, 09:15:14 AM
Not this inheritance tax shit again. There is NOTHING turning everyone into the drones read about in 1984 than the idea of punitive inheritance taxes.
The ONLY moral tax is either an income tax OR a VAT, i.e. taking your income, and taxing it at one point in its existence.
The BS done where first you are taxed when its your income, then when you spend it, then some more when you spend it on some specific shit (like fuel), then once you earn interest after saving what's left of it, and then finally when you have enough of it all and crook up and leave it to your kid - well, that may be necessary to maintain modern states, but it is pretty far from fair and moral.
The money you get paid for your work has been taxed already too. When I pay my cleaning lady, she is getting paid from the money I already paid tax on. The argument that it is somehow different with inheritance is spurious.
If my dad has $100 and in scenario one he pays me that money for some service I performed for him, and in scenario two he dies and I get this money for free, why should I pay more taxes in the former than in the latter case?
There is no double taxation here.
The money you get, your corporation is taxed at a much lower rate than you are. And they get to reduce their taxable income by whatever they paid you. So that portion of the money was never taxed.
My money, which I use to pay my cleaning lady, my barber and my shopkeeper, has already been taxed though and I cannot deduct my expenses from the base of my taxation.
Corporations are different, but then corporations are generally subject to different rules on taxation than the general public.
Quote from: Tamas on October 19, 2016, 09:30:48 AM
Quote from: Gups on October 19, 2016, 09:27:28 AM
Quote from: Tamas on October 19, 2016, 09:25:04 AM
Quote from: Gups on October 19, 2016, 09:21:11 AM
Cool, I get taxed extra on money I earn from working so some trustafarian twat doesn't have to pay any tax on money his great uncle Albert inherited from his great aunt Petunia.
Well as long as that's the only moral way.
You are looking at that money as if it materialised out of nothing when your trustafarian received it. It was already taxed when aunt Petunia got it so why not let her do whatever she wants with it.
Only if she earnt it. What if she got lucky when her farm land got planning permission for residential development?
Are you suggesting we should have the state making sure nobody rises above others financially based on "luck"?
Jesus Christ, what is it with you and straw men today?
Quote from: Martinus on October 19, 2016, 09:27:29 AM
Quote from: The Minsky Moment on October 19, 2016, 09:24:29 AM
What does morality have to do with it?
Well, the way I see it taxation should at least not run contrary to general morality. That's why the sales tax on jewellery, cigarettes and booze is usually higher than one on food, children clothes and books.
No that is not why.
Taxes are often high on things like cigs and booze because demand is relatively inelastic, and thus for centuries it has been a very effective way for governments to raise revenue. In addition, because it is commonly believed that lower consumption of those commodities is a net benefit (not detriment to society). The latter belief is not cigarettes and alchohol have some deviant metaphysical status but because it is well understood that their heavy consumption harms health and produces negative externalities.
It's the same rationale for carbon taxation - I don't think anyone has suggested that the particular element on the periodic table is "evil"
Quote from: Gups on October 19, 2016, 09:33:15 AM
Quote from: Tamas on October 19, 2016, 09:30:48 AM
Quote from: Gups on October 19, 2016, 09:27:28 AM
Quote from: Tamas on October 19, 2016, 09:25:04 AM
Quote from: Gups on October 19, 2016, 09:21:11 AM
Cool, I get taxed extra on money I earn from working so some trustafarian twat doesn't have to pay any tax on money his great uncle Albert inherited from his great aunt Petunia.
Well as long as that's the only moral way.
You are looking at that money as if it materialised out of nothing when your trustafarian received it. It was already taxed when aunt Petunia got it so why not let her do whatever she wants with it.
Only if she earnt it. What if she got lucky when her farm land got planning permission for residential development?
Are you suggesting we should have the state making sure nobody rises above others financially based on "luck"?
Jesus Christ, what is it with you and straw men today?
I suspect this is his moronic Hungarian bumpkin trigger. A lot of people from this part of the world have this completely naive, retarded view on taxation. I mean, his girlfriend apparently worships the right wing pro-Putin Polish "libertarian".
Quote from: The Minsky Moment on October 19, 2016, 09:35:16 AM
Quote from: Martinus on October 19, 2016, 09:27:29 AM
Quote from: The Minsky Moment on October 19, 2016, 09:24:29 AM
What does morality have to do with it?
Well, the way I see it taxation should at least not run contrary to general morality. That's why the sales tax on jewellery, cigarettes and booze is usually higher than one on food, children clothes and books.
No that is not why.
Taxes are often high on things like cigs and booze because demand is relatively inelastic, and thus for centuries it has been a very effective way for governments to raise revenue. In addition, because it is commonly believed that lower consumption of those commodities is a net benefit (not detriment to society). The latter belief is not cigarettes and alchohol have some deviant metaphysical status but because it is well understood that their heavy consumption harms health and produces negative externalities.
It's the same rationale for carbon taxation - I don't think anyone has suggested that the particular element on the periodic table is "evil"
You must be joking now. Surely carbon taxation is based on the moral judgement made on those who contribute to global warming through carbon emissions. :huh:
And health influence judgement is moral judgement.
Quote from: Gups on October 19, 2016, 09:33:15 AM
Quote from: Tamas on October 19, 2016, 09:30:48 AM
Quote from: Gups on October 19, 2016, 09:27:28 AM
Quote from: Tamas on October 19, 2016, 09:25:04 AM
Quote from: Gups on October 19, 2016, 09:21:11 AM
Cool, I get taxed extra on money I earn from working so some trustafarian twat doesn't have to pay any tax on money his great uncle Albert inherited from his great aunt Petunia.
Well as long as that's the only moral way.
You are looking at that money as if it materialised out of nothing when your trustafarian received it. It was already taxed when aunt Petunia got it so why not let her do whatever she wants with it.
Only if she earnt it. What if she got lucky when her farm land got planning permission for residential development?
Are you suggesting we should have the state making sure nobody rises above others financially based on "luck"?
Jesus Christ, what is it with you and straw men today?
He probably has some inheritance coming his way :lol:
Quote from: HVC on October 19, 2016, 09:39:09 AM
Quote from: Gups on October 19, 2016, 09:33:15 AM
Quote from: Tamas on October 19, 2016, 09:30:48 AM
Quote from: Gups on October 19, 2016, 09:27:28 AM
Quote from: Tamas on October 19, 2016, 09:25:04 AM
Quote from: Gups on October 19, 2016, 09:21:11 AM
Cool, I get taxed extra on money I earn from working so some trustafarian twat doesn't have to pay any tax on money his great uncle Albert inherited from his great aunt Petunia.
Well as long as that's the only moral way.
You are looking at that money as if it materialised out of nothing when your trustafarian received it. It was already taxed when aunt Petunia got it so why not let her do whatever she wants with it.
Only if she earnt it. What if she got lucky when her farm land got planning permission for residential development?
Are you suggesting we should have the state making sure nobody rises above others financially based on "luck"?
Jesus Christ, what is it with you and straw men today?
He probably has some inheritance coming his way :lol:
A goat, two beets and half a shack in a swamp.
He still has to keep the government from taking one of the beets his ancestors worked so hard to harvest
Quote from: Martinus on October 19, 2016, 09:38:45 AM
You must be joking now. Surely carbon taxation is based on the moral judgement made on those who contribute to global warming through carbon emissions. :huh:
I am equally if not more perplexed with this statement.
The idea of taxing carbon is not to inflict punishment on people who drive cars, or heat their houses, because they are immoral for doing so. That would be pretty silly.
The idea of taxing carbon is that the price paid to use carbon doesn't reflect the heavy costs that burning it imposes generally.
The point of carbon taxation is to arrest global warming which is harmful. Not to cast moral judgment on people (i.e. just about everyone) who uses carbon-based energy.
There has to be some way to limit wealth transfer between generations. Otherwise, you will end up with a bunch of superwealthy twats who have done nothing but control a significant percentage of the wealth - an aristocracy without the benefits of good breeding or noblesse oblige.
I can only think of a few solutions to this problem:
1) Wars that destroy everyone's wealth
2) social revolutions
3) massive inflation
4) wealth taxes
5) inheritance taxes
#5 seems the least obnoxious.
Quote from: Martinus on October 19, 2016, 09:35:37 AM
Quote from: Gups on October 19, 2016, 09:33:15 AM
Quote from: Tamas on October 19, 2016, 09:30:48 AM
Quote from: Gups on October 19, 2016, 09:27:28 AM
Quote from: Tamas on October 19, 2016, 09:25:04 AM
Quote from: Gups on October 19, 2016, 09:21:11 AM
Cool, I get taxed extra on money I earn from working so some trustafarian twat doesn't have to pay any tax on money his great uncle Albert inherited from his great aunt Petunia.
Well as long as that's the only moral way.
You are looking at that money as if it materialised out of nothing when your trustafarian received it. It was already taxed when aunt Petunia got it so why not let her do whatever she wants with it.
Only if she earnt it. What if she got lucky when her farm land got planning permission for residential development?
Are you suggesting we should have the state making sure nobody rises above others financially based on "luck"?
Jesus Christ, what is it with you and straw men today?
I suspect this is his moronic Hungarian bumpkin trigger. A lot of people from this part of the world have this completely naive, retarded view on taxation. I mean, his girlfriend apparently worships the right wing pro-Putin Polish "libertarian".
Not only that is not true no matter how often you repeat it, you fucking worshipped, at least as of about a month ago, the court comedian of Trump, so maybe you are not the perfect person to make this argument.
And on this it is you who are completely off of every natural human instinct on this one. If you were not some faux-nihilistic toe-sucking corporate lawyer, who is so out of touch with the real world that managed to worship the one political demographic which absolutely 100% despises every aspect of your existence, then you would know that a lot of parents work and keep bettering their lot in the hopes of offering an easier life for their descendants. Forcefully removing that option is one of the least moral ways to coerce income for the state.
Quote from: The Minsky Moment on October 19, 2016, 09:42:37 AM
Quote from: Martinus on October 19, 2016, 09:38:45 AM
You must be joking now. Surely carbon taxation is based on the moral judgement made on those who contribute to global warming through carbon emissions. :huh:
I am equally if not more perplexed with this statement.
The idea of taxing carbon is not to inflict punishment on people who drive cars, or heat their houses, because they are immoral for doing so. That would be pretty silly.
The idea of taxing carbon is that the price paid to use carbon doesn't reflect the heavy costs that burning it imposes generally.
The point of carbon taxation is to arrest global warming which is harmful. Not to cast moral judgment on people (i.e. just about everyone) who uses carbon-based energy.
Ok maybe my understanding of the concept of morality is broader and includes an utilitarian calculus (maybe it's a language thing for me).
Anyways, for me, prompting people towards socially beneficial outcomes (such as working instead of counting on inheritance) is a moral judgement.
Quote from: Martinus on October 19, 2016, 09:31:41 AM
The second part of your post essentially argues morality from the utilitarian standpoint.
Only if you believe that utility is a purely moral consideration.
Quote from: Martinus on October 19, 2016, 09:35:37 AM
Quote from: Gups on October 19, 2016, 09:33:15 AM
Jesus Christ, what is it with you and straw men today?
I suspect this is his moronic Hungarian bumpkin trigger. A lot of people from this part of the world have this completely naive, retarded view on taxation. I mean, his girlfriend apparently worships the right wing pro-Putin Polish "libertarian".
Ad homs are no better a debating tactic than straw men (either with reference to morality or effectiveness).
Quote from: grumbler on October 19, 2016, 09:44:35 AM
Quote from: Martinus on October 19, 2016, 09:31:41 AM
The second part of your post essentially argues morality from the utilitarian standpoint.
Only if you believe that utility is a purely moral consideration.
I would say it's the best of moral considerations.
Quote from: HVC on October 19, 2016, 09:40:38 AM
He still has to keep the government from taking one of the beets his ancestors worked so hard to harvest
You really don't remember how we had at least two other threads in the past where Martinus was arguing for a near-100% inheritance tax on everything?
Quote from: Gups on October 19, 2016, 09:44:43 AM
Quote from: Martinus on October 19, 2016, 09:35:37 AM
Quote from: Gups on October 19, 2016, 09:33:15 AM
Jesus Christ, what is it with you and straw men today?
I suspect this is his moronic Hungarian bumpkin trigger. A lot of people from this part of the world have this completely naive, retarded view on taxation. I mean, his girlfriend apparently worships the right wing pro-Putin Polish "libertarian".
Ad homs are no better a debating tactic than straw men (either with reference to morality or effectiveness).
I was curious. The last 3 times I directly replied to him in the past, IDK, 6 months or so, he always immediately brought up some personal "fact" about me he learned through Fireblade or Jaron. Did so again. Guy has a fascination with me I guess.
Quote from: Martinus on October 19, 2016, 09:44:35 AM
Ok maybe my understanding of the concept of morality is broader and includes an utilitarian calculus (maybe it's a language thing for me).
That is a perfectly acceptable definition, but in this context it makes the proposition a truism. Of course any system of taxation has to take into considerations of utility; the only other alternative would be to put every possible potential tax into a bag and draw them out at random until the revenue target was met.
Quote from: Tamas on October 19, 2016, 09:44:13 AM
Not only that is not true no matter how often you repeat it, you fucking worshipped, at least as of about a month ago, the court comedian of Trump, so maybe you are not the perfect person to make this argument.
And on this it is you who are completely off of every natural human instinct on this one. If you were not some faux-nihilistic toe-sucking corporate lawyer, who is so out of touch with the real world that managed to worship the one political demographic which absolutely 100% despises every aspect of your existence, then you would know that [snip]
Wow! This is a textbook case of the
ad hom argument! You don't find pure demagoguery like this very often in the wild.
Quote from: Martinus on October 19, 2016, 09:45:12 AM
Quote from: grumbler on October 19, 2016, 09:44:35 AM
Quote from: Martinus on October 19, 2016, 09:31:41 AM
The second part of your post essentially argues morality from the utilitarian standpoint.
Only if you believe that utility is a purely moral consideration.
I would say it's the best of moral considerations.
Well, it does make morality black-and-white, if that's what you believe.
I'm more of a Categorical Imperative guy myself, but I know there are utilitarian moral reasoners.
Quote from: Gups on October 19, 2016, 09:44:43 AM
Quote from: Martinus on October 19, 2016, 09:35:37 AM
Quote from: Gups on October 19, 2016, 09:33:15 AM
Jesus Christ, what is it with you and straw men today?
I suspect this is his moronic Hungarian bumpkin trigger. A lot of people from this part of the world have this completely naive, retarded view on taxation. I mean, his girlfriend apparently worships the right wing pro-Putin Polish "libertarian".
Ad homs are no better a debating tactic than straw men (either with reference to morality or effectiveness).
Yeah but it's just so frustrating dealing with this type from this part of Europe. They make Tea Party look positively statist.
Quote from: Tamas on October 19, 2016, 09:45:42 AM
Quote from: HVC on October 19, 2016, 09:40:38 AM
He still has to keep the government from taking one of the beets his ancestors worked so hard to harvest
You really don't remember how we had at least two other threads in the past where Martinus was arguing for a near-100% inheritance tax on everything?
Marti like attention. Ride out his histrionics and enjoy the other people in the thread. Inheritance tax makes sense if you look at it from the perspective as income tax on the new person receiving the money. They didn't work for it, why should the get it tax free?
Quote from: Tamas on October 19, 2016, 09:47:40 AM
Quote from: Gups on October 19, 2016, 09:44:43 AM
Quote from: Martinus on October 19, 2016, 09:35:37 AM
Quote from: Gups on October 19, 2016, 09:33:15 AM
Jesus Christ, what is it with you and straw men today?
I suspect this is his moronic Hungarian bumpkin trigger. A lot of people from this part of the world have this completely naive, retarded view on taxation. I mean, his girlfriend apparently worships the right wing pro-Putin Polish "libertarian".
Ad homs are no better a debating tactic than straw men (either with reference to morality or effectiveness).
I was curious. The last 3 times I directly replied to him in the past, IDK, 6 months or so, he always immediately brought up some personal "fact" about me he learned through Fireblade or Jaron. Did so again. Guy has a fascination with me I guess.
He's just jealous you found a polish person you don't have to pay to have sex with, something he has yet to do.
Quote from: Martinus on October 19, 2016, 09:52:30 AM
Quote from: Gups on October 19, 2016, 09:44:43 AM
Quote from: Martinus on October 19, 2016, 09:35:37 AM
Quote from: Gups on October 19, 2016, 09:33:15 AM
Jesus Christ, what is it with you and straw men today?
I suspect this is his moronic Hungarian bumpkin trigger. A lot of people from this part of the world have this completely naive, retarded view on taxation. I mean, his girlfriend apparently worships the right wing pro-Putin Polish "libertarian".
Ad homs are no better a debating tactic than straw men (either with reference to morality or effectiveness).
Yeah but it's just so frustrating dealing with this type from this part of Europe. They make Tea Party look positively statist.
Ah, sorry. I wasn't aware this is I Am Not With the Far Right Week for you. A bit hard to keep up.
Anyways to the OP:
Anytime that one treats a source of income differently for income tax purposes, one opens up a window for distortions, complexity and gaming the system. So ideally the presumption should be all sources of income are treated the same for taxation purposes, absent some very strong justification otherwise.
Quote from: HVC on October 19, 2016, 09:52:57 AM
Quote from: Tamas on October 19, 2016, 09:45:42 AM
Quote from: HVC on October 19, 2016, 09:40:38 AM
He still has to keep the government from taking one of the beets his ancestors worked so hard to harvest
You really don't remember how we had at least two other threads in the past where Martinus was arguing for a near-100% inheritance tax on everything?
Marti like attention. Ride out his histrionics and enjoy the other people in the thread. Inheritance tax makes sense if you look at it from the perspective as income tax on the new person receiving the money. They didn't work for it, why should the get it tax free?
Ok, but with that argument, why don't you pay tax after the value of gifts received? You didn't work for them.
Quote from: Tamas on October 19, 2016, 09:44:13 AM
... a lot of parents work and keep bettering their lot in the hopes of offering an easier life for their descendants. Forcefully removing that option is one of the least moral ways to coerce income for the state.
This is a shitty argument. Taxation is always "forcefully removing" the option of spending money as one wishes. lack of taxation (and hence of law enforcement)
also results
in someone "forcefully removing" the option of spending money as one wishes, only, in that case, it is a private actor robbing the parents.
The "taxation = theft" argument is so tired and morally bankrupt that I am surprised that you would even try to trot it out.
Quote from: Tamas on October 19, 2016, 09:55:18 AM
Quote from: HVC on October 19, 2016, 09:52:57 AM
Quote from: Tamas on October 19, 2016, 09:45:42 AM
Quote from: HVC on October 19, 2016, 09:40:38 AM
He still has to keep the government from taking one of the beets his ancestors worked so hard to harvest
You really don't remember how we had at least two other threads in the past where Martinus was arguing for a near-100% inheritance tax on everything?
Marti like attention. Ride out his histrionics and enjoy the other people in the thread. Inheritance tax makes sense if you look at it from the perspective as income tax on the new person receiving the money. They didn't work for it, why should the get it tax free?
Ok, but with that argument, why don't you pay tax after the value of gifts received? You didn't work for them.
You do for gifts over a certain amount ( if you claim it like you should). Besides what gift do you get that equal in value to what people inherit? It's a weird comparison to make.
Quote from: Martinus on October 19, 2016, 09:52:30 AM
Yeah but it's just so frustrating dealing with this type from this part of Europe. They make Tea Party look positively statist.
That's a pretty good
ad hom argument right there.
Quote from: Martinus on October 19, 2016, 08:58:40 AM
I wanted to start a discussion on this, as this has been bugging me for a few years now but it does not seem anyone (even socialists/leftists) tend to use this argument - and this is about taxation of different sources of income and ethics involved in judging such sources of income.
What I mean by that is this.
Let's assume in 2016, I earn $300,000.
$100,000 comes from my work/paycheck.
$100,000 comes from the rate of return on my capital (say, I am letting my properties, buying and selling shares etc.).
$100,000 comes from inheritance.
Now, I am willing to bet that in most legal systems I will pay the highest tax on the work/paycheck income, moderate tax on the capital income and the lowest (or no tax) on the inheritance.
Shouldn't this be exactly the opposite though? Surely, work of our own hands should be treated more preferentially than income that comes to me only by virtue of birth, which involves no actual effort on my part (with income from capital falling somewhere in the middle).
Thing is, you are only thinking in terms of morality. I work in the government, and what I need to worry about is public finance.
See, government expenditure is inflexible. Even in bad times, it is difficult to fire civil servants and cut services. You want revenue to match expenditure and be somewhat stable and predictable as well. The great thing about income tax is that most people pay them, and hence tend to be more stable than taxes on capital and inheritance. Taxes on capital tend to be very unstable as they are heavily associated with volatile movements in financial markets. The majority of people don't leave inheritances that are worth taxing. It may or may not be a moral thing to tax inheritances, but for civil servants in charge of public finances, inheritance taxes aren't *useful* enough.
Quote from: The Minsky Moment on October 19, 2016, 09:54:56 AM
Anyways to the OP:
Anytime that one treats a source of income differently for income tax purposes, one opens up a window for distortions, complexity and gaming the system. So ideally the presumption should be all sources of income are treated the same for taxation purposes, absent some very strong justification otherwise.
I agree with this, and note that an estate tax is not tax on income, so doesn't fall within the ambit of your argument.
If a person receives a distribution from an estate, I agree that it should be treated as ordinary income. I'd prefer that the estate be taxed at 100% so as to allow the relaxation of other, more distorting (as you note) taxes, but that's a mere preference. 50% above some low floor value works for me, with the balance treated as ordinary income for the recipient.
Quote from: grumbler on October 19, 2016, 09:56:30 AM
Quote from: Tamas on October 19, 2016, 09:44:13 AM
... a lot of parents work and keep bettering their lot in the hopes of offering an easier life for their descendants. Forcefully removing that option is one of the least moral ways to coerce income for the state.
This is a shitty argument. Taxation is always "forcefully removing" the option of spending money as one wishes. lack of taxation (and hence of law enforcement) also results
in someone "forcefully removing" the option of spending money as one wishes, only, in that case, it is a private actor robbing the parents.
The "taxation = theft" argument is so tired and morally bankrupt that I am surprised that you would even try to trot it out.
If you tax/burden certain activities you are giving incentives for avoiding doing it. If you do a 100% or near-100% tax on inheritance, a LOT of incentive would be lost to try and gain wealth.
Not to mention that taxing things like inheritance are only helping the rich: the more assets you have the more options there are to get around specific taxes like this one. A poor or middle class family can have real trouble trying to get their only property (their only real wealth) on the name of the future heir to avoid losing it upon death. The rich would have much more options to hand over most of their assets.
Quote from: grumbler on October 19, 2016, 09:56:30 AM
Quote from: Tamas on October 19, 2016, 09:44:13 AM
... a lot of parents work and keep bettering their lot in the hopes of offering an easier life for their descendants. Forcefully removing that option is one of the least moral ways to coerce income for the state.
This is a shitty argument. Taxation is always "forcefully removing" the option of spending money as one wishes. lack of taxation (and hence of law enforcement) also results
in someone "forcefully removing" the option of spending money as one wishes, only, in that case, it is a private actor robbing the parents.
The "taxation = theft" argument is so tired and morally bankrupt that I am surprised that you would even try to trot it out.
Tamas appears to believe that there are only two possible approaches to inheritance tax. Either there is 100% inheritance tax (which he appears to be railing against) or there is 0% (which he said in his first post is the only moral approach but has so far failed to support in any subsequent post).
Quote from: Tamas on October 19, 2016, 09:44:13 AM
<snip much ranting and raving that does little to establish your credibility>
then you would know that a lot of parents work and keep bettering their lot in the hopes of offering an easier life for their descendants.
Taxing them at step 14 in that process is no more or less "moral" than taxing them at steps 1-13 of that process.
Taking 25% of my income so I have 25% less to leave to my kids is no more morally rational than taxing it at the point of my death.
There is no "moral" calculus here, just a practical one.
Quote
Forcefully removing that option is one of the least moral ways to coerce income for the state.
I like how everyone sprinkles in "force" and "coerce" into the discussion, even though it adds zero informational content to the debate. Seems so ominous!
Quote from: Gups on October 19, 2016, 10:02:28 AM
Quote from: grumbler on October 19, 2016, 09:56:30 AM
Quote from: Tamas on October 19, 2016, 09:44:13 AM
... a lot of parents work and keep bettering their lot in the hopes of offering an easier life for their descendants. Forcefully removing that option is one of the least moral ways to coerce income for the state.
This is a shitty argument. Taxation is always "forcefully removing" the option of spending money as one wishes. lack of taxation (and hence of law enforcement) also results
in someone "forcefully removing" the option of spending money as one wishes, only, in that case, it is a private actor robbing the parents.
The "taxation = theft" argument is so tired and morally bankrupt that I am surprised that you would even try to trot it out.
Tamas appears to believe that there are only two possible approaches to inheritance tax. Either there is 100% inheritance tax (which he appears to be railing against) or there is 0% (which he said in his first post is the only moral approach but has so far failed to support in any subsequent post).
I am rallying against the 100% one because that was the point behind the original post.
And I explained my reasoning behind my preference for a 0% inheritance tax in my first reply.
And even if you discard moral arguments as quickly as Martinus discards his political affiliations, there are very practical concerns for inheritance tax, 100% or not: it is more of a burden the lower you income class is.
Let's say you have 20% income tax. A rich guy inherits a shitload of funds, properties, etc. Yeah that 20% is a cut but so what?
Let's say a poor or middle class person dies and his/her children/grandchildren are the heirs of what for sure would not amount to much bigger than a single property. 20% of that is a HUGE hit to the heirs, and a drastic cut either if they find the cash to pay it, or if they are forced to sell the property just to pay the tax.
Arguing for things like the inheritance tax, seems to me, is just one of these totally misplaced ideas that more complication and more rules are helping the common citizen and hurting the privileged. It is almost always the other way around.
Quote from: Tamas on October 19, 2016, 10:01:55 AM
If you tax/burden certain activities you are giving incentives for avoiding doing it. If you do a 100% or near-100% tax on inheritance, a LOT of incentive would be lost to try and gain wealth.
This is mere assertion, and not even believable mere assertion.
QuoteNot to mention that taxing things like inheritance are only helping the rich: the more assets you have the more options there are to get around specific taxes like this one. A poor or middle class family can have real trouble trying to get their only property (their only real wealth) on the name of the future heir to avoid losing it upon death. The rich would have much more options to hand over most of their assets.
Mere assertion, again. While confiscatory estate taxes will, indeed, induce the wealthy to distribute their fortune before death, this is all to the good; the wealth transfers are taxed, and the money returns to circulation, where it can do some good (sure, it might just be re-invested, but at least society gets some benefits from the wealth transfer, and the remaining money is available to help finance economic expansion). There isn't any place for an estate to "hide" assets so as to pass them intact to the beneficiaries.
The middle class will benefit because there will be lower general taxes if more of the burden is placed on estates (and wealth transfers). Sure, the overall average benefit is small, but the average harm is even smaller.
Quote from: Berkut on October 19, 2016, 10:02:49 AM
Quote from: Tamas on October 19, 2016, 09:44:13 AM
<snip much ranting and raving that does little to establish your credibility>
then you would know that a lot of parents work and keep bettering their lot in the hopes of offering an easier life for their descendants.
Taxing them at step 14 in that process is no more or less "moral" than taxing them at steps 1-13 of that process.
Taking 25% of my income so I have 25% less to leave to my kids is no more morally rational than taxing it at the point of my death.
There is no "moral" calculus here, just a practical one.
Quote
Forcefully removing that option is one of the least moral ways to coerce income for the state.
I like how everyone sprinkles in "force" and "coerce" into the discussion, even though it adds zero informational content to the debate. Seems so ominous!
But in your example they tax it at the point of your death in addition to taxing it when you earned it.
And I am fully aware such double taxation is hard to avoid with the levels of spending a modern state needs, but that does not mean we should embrace the idea and push it.
Quote from: grumbler on October 19, 2016, 10:11:39 AM
Sure, the overall average benefit is small, but the average harm is even smaller.
I think the overall average benefit is next to nil unless you do very punitive rates, and I strongly disagree about the average harm.
Quote from: Martinus on October 19, 2016, 09:32:02 AM
My money, which I use to pay my cleaning lady, my barber and my shopkeeper, has already been taxed though and I cannot deduct my expenses from the base of my taxation.
Of course, at some point, you have to pay some taxes. It ain't a zero sum where the taxes equal zero at the end of the day.
But if you were using these people to create a taxable income, they would be deducted from your income.
Quote from: grumbler on October 19, 2016, 10:01:42 AM
I agree with this, and note that an estate tax is not tax on income, so doesn't fall within the ambit of your argument.
That's correct.
Estate taxation does tend to give rise to complexities - effective enforcement means adding on additional systems of gift taxation for example. But no matter how structured there is always going to be aggressive tax planning - trust structures and the like. In an ideal world it might make sense to eschew it in favor of wealth taxation but that presents its own difficulties.
There are good and sensible practical reasons to tax estates, and so despite the difficulties associated with that form of tax, I'm personally basically OK with it.
Quote from: Tamas on October 19, 2016, 10:10:21 AM
I am rallying against the 100% one because that was the point behind the original post.
The point of the OP was to bait the bear and you walked right into the trap.
When you open your argument with the position that estate taxation leads to an Orwellian dystopia you are starting from a bad place.
Quote from: The Minsky Moment on October 19, 2016, 10:23:42 AM
Quote from: Tamas on October 19, 2016, 10:10:21 AM
I am rallying against the 100% one because that was the point behind the original post.
The point of the OP was to bait the bear and you walked right into the trap.
When you open your argument with the position that estate taxation leads to an Orwellian dystopia you are starting from a bad place.
Well a 100% one would :P
Quote from: Tamas on October 19, 2016, 10:12:49 AM
Quote from: Berkut on October 19, 2016, 10:02:49 AM
Quote from: Tamas on October 19, 2016, 09:44:13 AM
<snip much ranting and raving that does little to establish your credibility>
then you would know that a lot of parents work and keep bettering their lot in the hopes of offering an easier life for their descendants.
Taxing them at step 14 in that process is no more or less "moral" than taxing them at steps 1-13 of that process.
Taking 25% of my income so I have 25% less to leave to my kids is no more morally rational than taxing it at the point of my death.
There is no "moral" calculus here, just a practical one.
Quote
Forcefully removing that option is one of the least moral ways to coerce income for the state.
I like how everyone sprinkles in "force" and "coerce" into the discussion, even though it adds zero informational content to the debate. Seems so ominous!
But in your example they tax it at the point of your death in addition to taxing it when you earned it.
If we assume that the overall taxation rate is a constant, then presumably if they tax you more at death, they are taxing you less at earning.
If you do not make that assumption, then we are not arguing about what kind of tax is better, but overall taxation levels, which is a completely different discussion.
Quote
And I am fully aware such double taxation is hard to avoid with the levels of spending a modern state needs, but that does not mean we should embrace the idea and push it.
Double/triple/quadruple taxation is a complete red herring. It is utterly meaningless in any discussion about how taxes ought to be collected, since it is trivially obvious that in a transaction based society (which our economy most certainly is) there is no way to ever avoid "double" taxation in any case.
The only argument to be made around how many times income is taxed and when is to make sure the tax policy is transparent enough that we actually understand what we are taxing, when, and how that impacts the overall economic health.
Tamas, my position was that it is immoral to tax work income more than inheritance. Probably, for utilitarian reasons, taxing all kinds of income at the same rate would be the best - thus removing the incentive to cheat.
And of course you have to make allowances for special situations - just as you do with payroll tax (which is why you have tax-free amount) - thus allowing for special treatment of minor children, non-working spouse etc.
But I am talking about a pure situation I mentioned in my OP - I am an adult, able person who is fully capable of earning my living. The money I get from my work is taxed at a higher rate than the money I get from renting out my spare flat which in turn is taxed at a higher rate than the money I would earn if my parents died. I don't think this is a fair system.
For the record, I stand to approximately triple or quadruple my net worth upon the death of my parents, on which I will pay exactly 0 zloty of tax so you can't say I am acting here in personal interest.
QuoteIf we assume that the overall taxation rate is a constant, then presumably if they tax you more at death, they are taxing you less at earning.
If you do not make that assumption, then we are not arguing about what kind of tax is better, but overall taxation levels, which is a completely different discussion.
Even if we assume that, one does probably not come from the other.
I guess it heavily depends on the country in question but I doubt anything but an obscenely high inheritance tax could compensate for any noticeable decrease in any earning-side taxes, unless you talk about replacing another minor tax with an inheritance tax.
And in that case, my previous argument stands: there are far better taxes in terms of their level of impact on citizens. For example, a tax on dividends (while still under my moral issues of double taxation, but whatever) is far more fair as it does not result in an unexpected and disproportionate financial strain for the non-privileged.
Quote from: Martinus on October 19, 2016, 10:38:09 AM
Tamas, my position was that it is immoral to tax work income more than inheritance. Probably, for utilitarian reasons, taxing all kinds of income at the same rate would be the best - thus removing the incentive to cheat.
Just so it is clear, since it seems totally impossible for me to discuss anything with you without you immediately launching what you think are personal attacks, I am just not going to continue setting you up.
Quote from: Tamas on October 19, 2016, 10:47:32 AM
QuoteIf we assume that the overall taxation rate is a constant, then presumably if they tax you more at death, they are taxing you less at earning.
If you do not make that assumption, then we are not arguing about what kind of tax is better, but overall taxation levels, which is a completely different discussion.
Even if we assume that, one does probably not come from the other.
I guess it heavily depends on the country in question but I doubt anything but an obscenely high inheritance tax could compensate for any noticeable decrease in any earning-side taxes, unless you talk about replacing another minor tax with an inheritance tax.
And in that case, my previous argument stands: there are far better taxes in terms of their level of impact on citizens. For example, a tax on dividends (while still under my moral issues of double taxation, but whatever) is far more fair as it does not result in an unexpected and disproportionate financial strain for the non-privileged.
The moment you start using words like "fair" your argument is pretty toast. That is purely subjective.
And how is an inheritance tax "unexpected"? Are you thinking your parents will never die?
Finally, most inheritance taxes are specifically designed to handle issues like property taxes on family homes and businesses. There is typically a very large floor under which there is no tax - I think in the US it is something obscenely high like a million or so.
Death and taxes are supposed to be the two things we can all count on - taxes on death ought to be pretty darn non-surprising, and should in fact be planned for...
do the non-privileged rely on inheritance?
Alright, if special rulings are made to minimise the negative (wanted to avoid "unfair", because apparently it is frowned upon to discuss morals and peoples livelihoods in the same context :P), then of course, there should be much less issues.
But then what's the point, beside making sure tax legislation is complicated, with the unavoidable abundance of backdoors and exemptions people with the means can use?
The federal estate tax exemption is $5.45 million
Quote from: Tamas on October 19, 2016, 09:15:14 AM
Not this inheritance tax shit again. There is NOTHING turning everyone into the drones read about in 1984 than the idea of punitive inheritance taxes.
The ONLY moral tax is either an income tax OR a VAT, i.e. taking your income, and taxing it at one point in its existence.
The BS done where first you are taxed when its your income, then when you spend it, then some more when you spend it on some specific shit (like fuel), then once you earn interest after saving what's left of it, and then finally when you have enough of it all and crook up and leave it to your kid - well, that may be necessary to maintain modern states, but it is pretty far from fair and moral.
Let's test how your system would work. This is tax revenue in the UK from a couple of years ago. NICS is effectively another form of income tax FYI.
Type of tax Revenue £ million
Income Tax 156,898
NICs 107,690
VAT 104,718
Corporation Tax 39,274
Fuel duties 26,881
Alcohol taxes 19,986
Stamp Duty Land 9,273
Capital Gains 3,908
Inheritance tax 3,402
Shares 3,108
Insurance premium tax 3,014
Air passenger duty 3,013
Betting + gaming 2,098
Landfill Tax 1,189
Petroleum Revenue tax 1,118
Climate Change levy 1,068
Tax Credits -2,743
Total HMRC receipts 489,850
About half of revenue is in income tax. About 20% is VAT.
If your system were adopted, we would have to double income tax (so there would be a 90% top rate and even low owners would pay 40% on income over £10K) or we would have to quintuple VAT to 100% which would have catastrophic consequences for both the economy and citizens.
Quote from: The Minsky Moment on October 19, 2016, 10:59:20 AM
The federal estate tax exemption is $5.45 million
That is just ridiculous.
Quote from: LaCroix on October 19, 2016, 10:58:10 AM
do the non-privileged rely on inheritance?
I was talking about the situation where they would be hit with a sizeable inheritance tax. Check my example above.
I concede this issue is theoretical if there is a sufficiently complex law in place to protect these cases, but as Minsky pointed out, complex taxes are a problem in themselves.
Quote from: Gups on October 19, 2016, 11:00:04 AM
Quote from: Tamas on October 19, 2016, 09:15:14 AM
Not this inheritance tax shit again. There is NOTHING turning everyone into the drones read about in 1984 than the idea of punitive inheritance taxes.
The ONLY moral tax is either an income tax OR a VAT, i.e. taking your income, and taxing it at one point in its existence.
The BS done where first you are taxed when its your income, then when you spend it, then some more when you spend it on some specific shit (like fuel), then once you earn interest after saving what's left of it, and then finally when you have enough of it all and crook up and leave it to your kid - well, that may be necessary to maintain modern states, but it is pretty far from fair and moral.
Let's test how your system would work. This is tax revenue in the UK from a couple of years ago. NICS is effectively another form of income tax FYI.
Type of tax Revenue £ million
Income Tax 156,898
NICs 107,690
VAT 104,718
Corporation Tax 39,274
Fuel duties 26,881
Alcohol taxes 19,986
Stamp Duty Land 9,273
Capital Gains 3,908
Inheritance tax 3,402
Shares 3,108
Insurance premium tax 3,014
Air passenger duty 3,013
Betting + gaming 2,098
Landfill Tax 1,189
Petroleum Revenue tax 1,118
Climate Change levy 1,068
Tax Credits -2,743
Total HMRC receipts 489,850
About half of revenue is in income tax. About 20% is VAT.
If your system were adopted, we would have to double income tax (so there would be a 90% top rate and even low owners would pay 40% on income over £10K) or we would have to quintuple VAT to 100% which would have catastrophic consequences for both the economy and citizens.
Quote from: Tamaswell, that may be necessary to maintain modern states, but it is pretty far from fair and moral.
Which everyone seems to agree on, since they argue morality should be dropped from tax discussions.
Quote from: Berkut on October 19, 2016, 11:00:08 AM
Quote from: The Minsky Moment on October 19, 2016, 10:59:20 AM
The federal estate tax exemption is $5.45 million
That is just ridiculous.
It really is.
It's £325,000 here. The rate is 40%.
Quote from: Gups on October 19, 2016, 11:03:41 AM
Quote from: Berkut on October 19, 2016, 11:00:08 AM
Quote from: The Minsky Moment on October 19, 2016, 10:59:20 AM
The federal estate tax exemption is $5.45 million
That is just ridiculous.
It really is.
It's £325,000 here. The rate is 40%.
Well I sure hope there are exceptions in place for direct relatives and such, because I would not like to be a not-rich heir of someone who has seen their 80k flat propel into 400k value.
Quote from: Berkut on October 19, 2016, 11:00:08 AM
Quote from: The Minsky Moment on October 19, 2016, 10:59:20 AM
The federal estate tax exemption is $5.45 million
That is just ridiculous.
That's per individual - unused portions of an exemption can carry over to a spouse for a combined exemption of over $10 million
In addition, with respect to small businesses in reality the exemption is much higher, because under the existing rules, small businesses subject to estate taxation calculate their value subject to various valuation discounts. The treasury has started to crack down on that but its not clear yet how it will play out.
Quote from: Tamas on October 19, 2016, 11:06:50 AM
Quote from: Gups on October 19, 2016, 11:03:41 AM
Quote from: Berkut on October 19, 2016, 11:00:08 AM
Quote from: The Minsky Moment on October 19, 2016, 10:59:20 AM
The federal estate tax exemption is $5.45 million
That is just ridiculous.
It really is.
It's £325,000 here. The rate is 40%.
Well I sure hope there are exceptions in place for direct relatives and such, because I would not like to be a not-rich heir of someone who has seen their 80k flat propel into 400k value.
I know. You'd have to pay £37,500 just to own a £400,000 property. Who the fuck would want to put up with that shit. Better off just gifting it to charity.
Quote from: Tamas on October 19, 2016, 11:06:50 AM
Quote from: Gups on October 19, 2016, 11:03:41 AM
Quote from: Berkut on October 19, 2016, 11:00:08 AM
Quote from: The Minsky Moment on October 19, 2016, 10:59:20 AM
The federal estate tax exemption is $5.45 million
That is just ridiculous.
It really is.
It's £325,000 here. The rate is 40%.
Well I sure hope there are exceptions in place for direct relatives and such, because I would not like to be a not-rich heir of someone who has seen their 80k flat propel into 400k value.
Yeah, that would really suck, having to inherit something that used to be worth 1/5th its current value. What a bummer.
Quote from: Gups on October 19, 2016, 11:10:37 AM
I know. You'd have to pay £37,500 just to own a £400,000 property. Who the fuck would want to put up with that shit. Better off just gifting it to charity.
Or even worse, selling it for £400K to pay the £37.5K instead of getting to sell it for £80K without having to pay any of that awful tax.
Ok ok, I didn't realise at first its 40% on the above-375k part :P
Still, I'd like to point out, that especially with the property prices in the UK, I can very easily imagine a situation where the heir does not have the value they need to cough up.
Sure, they can take a loan, but that still makes this a very annoying an -gasp- unfair tax.
Quote from: frunk on October 19, 2016, 11:15:12 AM
Quote from: Gups on October 19, 2016, 11:10:37 AM
I know. You'd have to pay £37,500 just to own a £400,000 property. Who the fuck would want to put up with that shit. Better off just gifting it to charity.
Or even worse, selling it for £400K to pay the £37.5K instead of getting to sell it for £80K without having to pay any of that awful tax.
What if you do not want to sell it because it hold sentimental value, or would be a property you could move your own family into to have better quality of living?
Quote from: Tamas on October 19, 2016, 10:14:15 AM
Quote from: grumbler on October 19, 2016, 10:11:39 AM
Sure, the overall average benefit is small, but the average harm is even smaller.
I think the overall average benefit is next to nil unless you do very punitive rates, and I strongly disagree about the average harm.
Arguments by assertion are arguments by assertion.
Quote from: Tamas on October 19, 2016, 11:19:55 AM
What if you do not want to sell it because it hold sentimental value, or would be a property you could move your own family into to have better quality of living?
Assuming they don't have the money they should be able to get a loan, which most likely will be less than the rent/mortgage on their current place. If they can't even get that then i would think they would be better off selling for the 363K net profit. I don't think we should structure tax policy to make sure everybody gets to live where they want.
Quote from: Berkut on October 19, 2016, 10:52:38 AM
Quote from: Tamas on October 19, 2016, 10:47:32 AM
QuoteIf we assume that the overall taxation rate is a constant, then presumably if they tax you more at death, they are taxing you less at earning.
If you do not make that assumption, then we are not arguing about what kind of tax is better, but overall taxation levels, which is a completely different discussion.
Even if we assume that, one does probably not come from the other.
I guess it heavily depends on the country in question but I doubt anything but an obscenely high inheritance tax could compensate for any noticeable decrease in any earning-side taxes, unless you talk about replacing another minor tax with an inheritance tax.
And in that case, my previous argument stands: there are far better taxes in terms of their level of impact on citizens. For example, a tax on dividends (while still under my moral issues of double taxation, but whatever) is far more fair as it does not result in an unexpected and disproportionate financial strain for the non-privileged.
The moment you start using words like "fair" your argument is pretty toast. That is purely subjective.
And how is an inheritance tax "unexpected"? Are you thinking your parents will never die?
Finally, most inheritance taxes are specifically designed to handle issues like property taxes on family homes and businesses. There is typically a very large floor under which there is no tax - I think in the US it is something obscenely high like a million or so.
Death and taxes are supposed to be the two things we can all count on - taxes on death ought to be pretty darn non-surprising, and should in fact be planned for...
And the argument that receiving a behest results in "an unexpected and disproportionate financial strain for the non-privileged" is ludicrous on the face of it; if receiving the behest would be too great an imposition, the heir could simply refuse the behest and have no strain whatsoever.
Quote from: frunk on October 19, 2016, 11:35:11 AM
Quote from: Tamas on October 19, 2016, 11:19:55 AM
What if you do not want to sell it because it hold sentimental value, or would be a property you could move your own family into to have better quality of living?
Assuming they don't have the money they should be able to get a loan, which most likely will be less than the rent/mortgage on their current place. If they can't even get that then i would think they would be better off selling for the 363K net profit. I don't think we should structure tax policy to make sure everybody gets to live where they want.
Not but you could structure tax policy in a way that people do not face the decision of having to sell a property with great sentimental value, just to meet tax obligations.
Even if this is a very rare scenario, surely there must be other ways to get the same amount of tax income without causing the same controversy.
I guess this may be a cultural thing. Your societies might be more mobile in general, better accustomed to the concept of just throwing the property your parents (and probably you) lived in for decades, just to pay a tax bill.
Quote from: Tamas on October 19, 2016, 11:01:41 AM
I was talking about the situation where they would be hit with a sizeable inheritance tax. Check my example above.
Just have the estate pay the tax. if the taxes excede the value of the estate, no one owes anything.
QuoteI concede this issue is theoretical if there is a sufficiently complex law in place to protect these cases, but as Minsky pointed out, complex taxes are a problem in themselves.
That's why inheritance (after the estate is taxed and goes through probate) should be treated as ordinary income. No special rules needed.
Quote from: Tamas on October 19, 2016, 11:45:44 AM
Quote from: frunk on October 19, 2016, 11:35:11 AM
Quote from: Tamas on October 19, 2016, 11:19:55 AM
What if you do not want to sell it because it hold sentimental value, or would be a property you could move your own family into to have better quality of living?
Assuming they don't have the money they should be able to get a loan, which most likely will be less than the rent/mortgage on their current place. If they can't even get that then i would think they would be better off selling for the 363K net profit. I don't think we should structure tax policy to make sure everybody gets to live where they want.
Not but you could structure tax policy in a way that people do not face the decision of having to sell a property with great sentimental value, just to meet tax obligations.
Even if this is a very rare scenario, surely there must be other ways to get the same amount of tax income without causing the same controversy.
I guess this may be a cultural thing. Your societies might be more mobile in general, better accustomed to the concept of just throwing the property your parents (and probably you) lived in for decades, just to pay a tax bill.
Not really. People in the UK often use the same specious arguments against inheritance tax that you do.
Quote from: Tamas on October 19, 2016, 11:45:44 AM
Not but you could structure tax policy in a way that people do not face the decision of having to sell a property with great sentimental value, just to meet tax obligations.
You are talking about a situation where the family can't get a loan for 37.5K. In that situation I think it is better for them to sell the property and use the money to better their lives than to cling to their sentimentality even if there was no tax. Take lots of pictures and mementos and let go.
My main concern with punitive (like 60%+) inheritance tax is that it seems like it would fall super hard on a very specific part of the population. Small business owners and people who own realestate in cities. It would pretty much destroy them, while the wealthy could easily bear it and/or plan around it. But I guess that is what all those tax exemptions are for.
Quote from: Gups on October 19, 2016, 11:03:41 AM
Quote from: Berkut on October 19, 2016, 11:00:08 AM
Quote from: The Minsky Moment on October 19, 2016, 10:59:20 AM
The federal estate tax exemption is $5.45 million
That is just ridiculous.
It really is.
It's £325,000 here. The rate is 40%.
That sounds excellent for Marty's billable hours :P
But even that rate strikes me as something people could manage. Marty would talk about just taking everything over a certain amount in the past.
Quote from: The Minsky Moment on October 19, 2016, 09:24:29 AM
What does morality have to do with it?
+1, this is really about what behaviors you want to incentivise/disincentivise in your society.
Quote from: Tamas on October 19, 2016, 11:19:55 AM
Quote from: frunk on October 19, 2016, 11:15:12 AM
Quote from: Gups on October 19, 2016, 11:10:37 AM
I know. You'd have to pay £37,500 just to own a £400,000 property. Who the fuck would want to put up with that shit. Better off just gifting it to charity.
Or even worse, selling it for £400K to pay the £37.5K instead of getting to sell it for £80K without having to pay any of that awful tax.
What if you do not want to sell it because it hold sentimental value, or would be a property you could move your own family into to have better quality of living?
You would have a better quality of lvining with 350k in your pocket to go buy or upgrade your current house.
And if it holds sentimental value, great. How much? 350k worth?
I am sentimentally attached to my current house, but I still have to pay property taxes on it.
What does sentimental value have to do with taxes? Is there some unknown moral code that says that as long as people are emotionally attached to something, it's value for purposes of taxation must be zero?
Quote from: LaCroix on October 19, 2016, 10:58:10 AM
do the non-privileged rely on inheritance?
Well if the UK plan was in effect in Austin that would effectively annihilate the remaining traditionally African American neighborhoods left in the city. But property taxes was already doing a great job of that on a more slow boil level.
I think a wealth tax, especially one increasing somewhat at higher net worths is a sensible way to approach the issue. Since it applies to net worth, it's harder to avoid it using schemes and exemptions and a progressive version means that the accumulation of wealth at the bn+ level becomes harder, at least to maintain that level for the long term.
I can't say much about morality. My impression is that the state is poor at managing money, so I would guess keeping taxes as low as reasonably achievable makes sense.
My country doesn't have taxes on gifts or inheritance. AFAIK they were ended because it was felt that they weren't worth the hassle.
To be clear, there can be ethical/moral considerations concerning tax - with respect to distribution of wealth and social power, or for confiscatory motives ("the power to destroy") etc. I just don't think there are any significant moral questions (aside for purely utilitarian ones) with respect to different sources of income. I.e. in itself there is nothing inherently virtuous or reprehensible about investment income or wage income.
Unrelated point re estate taxation - the way the US estate tax is structured now, it's probably a waste of effort. The yield is not worth the cost of administering plus the waste from all the efforts to avoid it.
Quote from: Valmy on October 19, 2016, 12:05:20 PM
My main concern with punitive (like 60%+) inheritance tax is that it seems like it would fall super hard on a very specific part of the population. Small business owners and people who own realestate in cities. It would pretty much destroy them, while the wealthy could easily bear it and/or plan around it. But I guess that is what all those tax exemptions are for.
This is a silly argument. If the company couldn't exist if faced with debt, it wouldn't exist, because how did it ever get started without ever incurring debt? The idea that the heirs should be able to receive a debt-free business inheritance when the original owners (their parents) never did is absurd. Receiving valuable property is not going to 'destroy' anyone, even if they have to pay taxes on it, unless the inheritance is worth less than the tax, which is impossible.
This is going a little beyond the tax question, but to Tamas point about the moral need for parents to "make a better life for their kids" by, presumably, leaving them piles of cash...
I don't get it. I had a pretty tough childhood, and came from a very poor family. I certainly want better for my kids. But I think I've mostly achieved that not by thinking I am going to leave them a bunch of money, but by giving them a stable life where they have great opportunity for education and emotional development.
Honestly, by the time I am dead, their place in life will hopefully be largely set - not by me leaving them money, but by me giving them the tools necessary for them to create the kind of life they want through their own efforts.
I think whether I leave them $100 or $1,000,000 when I die will have very little impact on whether I think I have done right by them, or whether (I hope) they think I have done right by them. Indeed, from what I've seen from others, leaving your kids a bunch of money doesn't generally seem to have much positive impact on them as far as their personal happiness is concerned.
Not all parents have kids they know will be able to work for a living.
Quote from: Berkut on October 19, 2016, 01:23:28 PM
This is going a little beyond the tax question, but to Tamas point about the moral need for parents to "make a better life for their kids" by, presumably, leaving them piles of cash...
I don't get it. I had a pretty tough childhood, and came from a very poor family. I certainly want better for my kids. But I think I've mostly achieved that not by thinking I am going to leave them a bunch of money, but by giving them a stable life where they have great opportunity for education and emotional development.
Honestly, by the time I am dead, their place in life will hopefully be largely set - not by me leaving them money, but by me giving them the tools necessary for them to create the kind of life they want through their own efforts.
I think whether I leave them $100 or $1,000,000 when I die will have very little impact on whether I think I have done right by them, or whether (I hope) they think I have done right by them. Indeed, from what I've seen from others, leaving your kids a bunch of money doesn't generally seem to have much positive impact on them as far as their personal happiness is concerned.
It is also a matter of timing. In the ordinary course, given that the typical life-span in Canada at least is around 80 years, and the average age at which one has a child is around 30, the average age at which a child can expect to receive this inheritance is going to be around 50.
By age 50, most people's lives are pretty well established. The pathway of the average person will not be affected by receiving cash at that age, except insofar as it may affect their decision as to when to retire.
Well, seeing how whole properties' worth of money is not an issue to any statistically significant prortions of your societies, I will just withdraw my objection, as it is indeed null and void in this case.
Quote from: Berkut on October 19, 2016, 01:23:28 PM
This is going a little beyond the tax question, but to Tamas point about the moral need for parents to "make a better life for their kids" by, presumably, leaving them piles of cash...
I don't get it. I had a pretty tough childhood, and came from a very poor family. I certainly want better for my kids. But I think I've mostly achieved that not by thinking I am going to leave them a bunch of money, but by giving them a stable life where they have great opportunity for education and emotional development.
Honestly, by the time I am dead, their place in life will hopefully be largely set - not by me leaving them money, but by me giving them the tools necessary for them to create the kind of life they want through their own efforts.
I think whether I leave them $100 or $1,000,000 when I die will have very little impact on whether I think I have done right by them, or whether (I hope) they think I have done right by them. Indeed, from what I've seen from others, leaving your kids a bunch of money doesn't generally seem to have much positive impact on them as far as their personal happiness is concerned.
This x 100.
I believe that looking forward to inheriting considerable wealth (aka "having great expectations") can be an active detriment to proper individual moral and emotional development. I've known kids who stood to inherit tens or hundreds of millions of dollars and they didn't give a rat's ass about education or making strong friends, because they were going to be rich and "leave all these losers behind." I've also known a near-billionaire (could be a billionaire by now) who has told his kids he'll pay tuition, books, and a stipend for as long as they want to stay in school, but that they will inherit nothing, because he will give his estate to charity. Those billionaire (+/-) kids are pretty much ordinary kids as far as ambition and interpersonal relationships go.
I've never thought kids should be rewarded for their choice of parents.
Quote from: grumbler on October 19, 2016, 02:30:23 PM
I've never thought kids should be rewarded for their choice of parents.
You don't think parents should influence the lives of their kids?
God that near billionaire sounds like a douche.
Quote from: The Brain on October 19, 2016, 02:32:45 PM
Quote from: grumbler on October 19, 2016, 02:30:23 PM
I've never thought kids should be rewarded for their choice of parents.
You don't think parents should influence the lives of their kids?
Nice red herring! :)
Quote from: garbon on October 19, 2016, 03:11:14 PM
God that near billionaire sounds like a douche.
He is. He spends nearly all his time as a volunteer coach for youth leagues and, now that his kids have moved out, lives in a small house. Total douche. Oh, and he inherited none of his money. That's the douchiest thing.
Quote from: grumbler on October 19, 2016, 03:23:14 PM
He spends nearly all his time as a volunteer coach for youth leagues and,
Hate him!
Quote from: grumbler on October 19, 2016, 03:21:20 PM
Quote from: The Brain on October 19, 2016, 02:32:45 PM
Quote from: grumbler on October 19, 2016, 02:30:23 PM
I've never thought kids should be rewarded for their choice of parents.
You don't think parents should influence the lives of their kids?
Nice red herring! :)
Why not answer the question? If for instance you strictly mean inheriting wealth just say so.
Quote from: The Brain on October 19, 2016, 03:24:31 PM
Quote from: grumbler on October 19, 2016, 03:21:20 PM
Quote from: The Brain on October 19, 2016, 02:32:45 PM
Quote from: grumbler on October 19, 2016, 02:30:23 PM
I've never thought kids should be rewarded for their choice of parents.
You don't think parents should influence the lives of their kids?
Nice red herring! :)
Why not answer the question? If for instance you strictly mean inheriting wealth just say so.
Because it is a stupid question unrelated to what I said. You should answer your own question first. I don't play the Yicratic game.
Quote from: grumbler on October 19, 2016, 02:30:23 PM
Quote from: Berkut on October 19, 2016, 01:23:28 PM
This is going a little beyond the tax question, but to Tamas point about the moral need for parents to "make a better life for their kids" by, presumably, leaving them piles of cash...
I don't get it. I had a pretty tough childhood, and came from a very poor family. I certainly want better for my kids. But I think I've mostly achieved that not by thinking I am going to leave them a bunch of money, but by giving them a stable life where they have great opportunity for education and emotional development.
Honestly, by the time I am dead, their place in life will hopefully be largely set - not by me leaving them money, but by me giving them the tools necessary for them to create the kind of life they want through their own efforts.
I think whether I leave them $100 or $1,000,000 when I die will have very little impact on whether I think I have done right by them, or whether (I hope) they think I have done right by them. Indeed, from what I've seen from others, leaving your kids a bunch of money doesn't generally seem to have much positive impact on them as far as their personal happiness is concerned.
This x 100.
I believe that looking forward to inheriting considerable wealth (aka "having great expectations") can be an active detriment to proper individual moral and emotional development. I've known kids who stood to inherit tens or hundreds of millions of dollars and they didn't give a rat's ass about education or making strong friends, because they were going to be rich and "leave all these losers behind." I've also known a near-billionaire (could be a billionaire by now) who has told his kids he'll pay tuition, books, and a stipend for as long as they want to stay in school, but that they will inherit nothing, because he will give his estate to charity. Those billionaire (+/-) kids are pretty much ordinary kids as far as ambition and interpersonal relationships go.
I've never thought kids should be rewarded for their choice of parents.
YOur billionaire friend sounds like a great guy. But shouldn't it be up to the parents to decide whether (or not) their kids inherit any money?
I think it's a red herring to think of it as the 'kids being rewarded', when it is better to look at it as 'the parents getting to decide what to do with their own money'.
Quote from: grumbler on October 19, 2016, 03:29:04 PM
Quote from: The Brain on October 19, 2016, 03:24:31 PM
Quote from: grumbler on October 19, 2016, 03:21:20 PM
Quote from: The Brain on October 19, 2016, 02:32:45 PM
Quote from: grumbler on October 19, 2016, 02:30:23 PM
I've never thought kids should be rewarded for their choice of parents.
You don't think parents should influence the lives of their kids?
Nice red herring! :)
Why not answer the question? If for instance you strictly mean inheriting wealth just say so.
Because it is a stupid question unrelated to what I said. You should answer your own question first. I don't play the Yicratic game.
:lol: Chillax. You said something you hadn't thought through and you got called on it. No reason to lash out.
This is relevant to my interests.
Quote from: Barrister on October 19, 2016, 03:31:14 PM
YOur billionaire friend sounds like a great guy. But shouldn't it be up to the parents to decide whether (or not) their kids inherit any money?
I think it's a red herring to think of it as the 'kids being rewarded', when it is better to look at it as 'the parents getting to decide what to do with their own money'.
I think it's a red herring, when talking about taxes, to treat them as contrary to "X getting to do what they want with their own money." All taxes reduce the ability of people to "decide what to do with their own money." I am proposing that estate taxes are the best kinds of taxes, in that they have the least distorting impact on the ability of individuals to make the most sensible economic decisions. Why? Because he money in the estate doesn't belong to anyone, so no one is making any decisions to be distorted by the tax.
Now, it may be that there is some currently-unarticulated societal goal that is advanced by having higher taxes on income or sales or property or whatever in order to afford a non-confiscatory estate tax, but I haven't seen anyone advance it yet. Minsky has a sort-of argument that estate taxes are too difficult to collect for the gain gotten out of them, but I'd need to see more info on that. Other than that, the argument against confiscatory estate taxes seems to be "it's just bad, mkay?"
Quote from: The Brain on October 19, 2016, 03:32:33 PM
:lol: Chillax. You said something you hadn't thought through and you got called on it. No reason to lash out.
:lol: I note that you are avoiding answering your own question! I guess that tell us all we need to know about the quality of the question.
Quote from: grumbler on October 19, 2016, 03:23:14 PM
lives in a small house.
Nice big FU to the construction trades, right there.
Quote from: grumbler on October 19, 2016, 02:30:23 PM
I believe that looking forward to inheriting considerable wealth (aka "having great expectations") can be an active detriment to proper individual moral and emotional development. I've known kids who stood to inherit tens or hundreds of millions of dollars and they didn't give a rat's ass about education or making strong friends, because they were going to be rich and "leave all these losers behind." I've also known a near-billionaire (could be a billionaire by now) who has told his kids he'll pay tuition, books, and a stipend for as long as they want to stay in school, but that they will inherit nothing, because he will give his estate to charity. Those billionaire (+/-) kids are pretty much ordinary kids as far as ambition and interpersonal relationships go.
More seriously, this is argument by anecdote. I could counter with anecdotes about kids of very wealthy people who do stand to inherit yet worked hard in school, are very down-to-earth etc. It really depends on the individual. If someone is a decent bloke and well-motivated to make something of themselves, the prospect of an inheritance isn't likely to change that. And someone who is easily corrupted by money into indolence is going to have a tough time of it even w/o the money.
Quote from: grumbler on October 19, 2016, 05:45:16 PM
Minsky has a sort-of argument that estate taxes are too difficult to collect for the gain gotten out of them, but I'd need to see more info on that. Other than that, the argument against confiscatory estate taxes seems to be "it's just bad, mkay?"
Estate tax revenue is in the $20 billion range, which is pretty small potatoes on the scale of the budget. The way it exists now it is shot through with loopholes. To give an example of how bonkers some of the rules are now - you can put a huge chunk of money into a charitable annuity trust. The rules require that the trust pay out a certain rate of return to charity. As long as you do that, it's exempt from estate tax. But the rate of return is based on treasury rates and for the last few years has been around 1.5%. If the trust has higher annual returns, the entirety of the excess can be distributed back to the heirs tax free. This is one of the dodges the Walton family abused the hell out off to escape estate taxation.
That criticism applies to the tax as it currently exists on the federal level in the US. I wouldn't say its generally true of all possible or actual estate taxes.
Quote from: The Minsky Moment on October 19, 2016, 06:18:06 PM
Quote from: grumbler on October 19, 2016, 05:45:16 PM
Minsky has a sort-of argument that estate taxes are too difficult to collect for the gain gotten out of them, but I'd need to see more info on that. Other than that, the argument against confiscatory estate taxes seems to be "it's just bad, mkay?"
Estate tax revenue is in the $20 billion range, which is pretty small potatoes on the scale of the budget. The way it exists now it is shot through with loopholes. To give an example of how bonkers some of the rules are now - you can put a huge chunk of money into a charitable annuity trust. The rules require that the trust pay out a certain rate of return to charity. As long as you do that, it's exempt from estate tax. But the rate of return is based on treasury rates and for the last few years has been around 1.5%. If the trust has higher annual returns, the entirety of the excess can be distributed back to the heirs tax free. This is one of the dodges the Walton family abused the hell out off to escape estate taxation.
That criticism applies to the tax as it currently exists on the federal level in the US. I wouldn't say its generally true of all possible or actual estate taxes.
This strikes me as the same kind of progression that Beebs laid out for why it is perfectly reasonable for the cops to search your bank account when they stop you for speeding. A series of seemingly reasonable steps taken for seeminglly reasonable reasons that leads somewhere ridiculous.
"You have to have a bigger exemption of estate taxes to save the family farm!"
OK. Raise exemption from some small amount to something larger.
"ZOMG family owned businesses are being destroyed by estate taxes! Why are you people so anti-small business???"
Oh dear. Raise the exemption for all these middle class business owners right away!
"You know, some family businesses might have a pretty high valuation, even if they aren't really all that profitable! Tax is theft! Raise the exemption some more!"
GO TEA PARTY! RAAR! Raise exemption some more!
"Hey, I noticed that we don't really generate much income from estate taxes, only some 0.1% of estates actually even pay anything. We should just get rid of it!"
Yeah, good point.
Quote from: Martinus on October 19, 2016, 10:38:09 AM
Tamas, my position was that it is immoral to tax work income more than inheritance. Probably, for utilitarian reasons, taxing all kinds of income at the same rate would be the best - thus removing the incentive to cheat.
How would that remove the incentive to cheat? It would make it pointless to attempt to convert one form of income to another (at least for tax purposes), but there would still be plenty of incentive to cheat in other ways, by understating/hiding the amount of income or overstating/fabricating deductions.
Quote from: The Minsky Moment on October 19, 2016, 06:08:50 PM
Quote from: grumbler on October 19, 2016, 02:30:23 PM
I believe that looking forward to inheriting considerable wealth (aka "having great expectations") can be an active detriment to proper individual moral and emotional development. I've known kids who stood to inherit tens or hundreds of millions of dollars and they didn't give a rat's ass about education or making strong friends, because they were going to be rich and "leave all these losers behind." I've also known a near-billionaire (could be a billionaire by now) who has told his kids he'll pay tuition, books, and a stipend for as long as they want to stay in school, but that they will inherit nothing, because he will give his estate to charity. Those billionaire (+/-) kids are pretty much ordinary kids as far as ambition and interpersonal relationships go.
More seriously, this is argument by anecdote. I could counter with anecdotes about kids of very wealthy people who do stand to inherit yet worked hard in school, are very down-to-earth etc. It really depends on the individual. If someone is a decent bloke and well-motivated to make something of themselves, the prospect of an inheritance isn't likely to change that. And someone who is easily corrupted by money into indolence is going to have a tough time of it even w/o the money.
I am not sure what argument you are making here. Are you agreeing that the prospect of inheriting great wealth
cannot be a detriment to proper individual moral and emotional development, or agreeing with me that it can be? It isn't argument by anecdote to point out a possibility and provide an example of that possibility coming true.
Quote from: grumbler on October 19, 2016, 07:59:38 PM
Are you agreeing that the prospect of inheriting great wealth cannot be a detriment to proper individual moral and emotional development, or agreeing with me that it can be?
Lots of things are possible, it's possible that could be true (that it can be).
Quote from: Berkut on October 19, 2016, 07:02:29 PM
This strikes me as the same kind of progression that Beebs laid out for why it is perfectly reasonable for the cops to search your bank account when they stop you for speeding. A series of seemingly reasonable steps taken for seeminglly reasonable reasons that leads somewhere ridiculous.
Not on topic but you should check out a case recently decided, United States v. Ganias. Similar kind of logic employed, leading to the conclusion that is perfectly OK and reasonable for the government to seize vastly more material than a warrant allows, keep it for years and years, then go back and look at the part they were never supposed to collect in the first place and use it bring a criminal case. Because, you know, computers.
You live in the Second Circuit - so may be of interest:
https://www.eff.org/files/2016/06/08/ganias_combined_opinion.pdf
I do sort of think there is a middle class value judgment common in this type of discussions. "true virtue is through hard work and making your own way like I"m doing/trying to do! A kid knowing he is getting a multimillion trust fund won't push himself to work hard!" It is just taken for granted that jet setting around the world to do coke off of models tits in five star hotels is somehow less cool than working your ass off in a cube and sucking up to a loser boss.
Quote from: dps on October 19, 2016, 07:30:31 PM
Quote from: Martinus on October 19, 2016, 10:38:09 AM
Tamas, my position was that it is immoral to tax work income more than inheritance. Probably, for utilitarian reasons, taxing all kinds of income at the same rate would be the best - thus removing the incentive to cheat.
How would that remove the incentive to cheat? It would make it pointless to attempt to convert one form of income to another (at least for tax purposes), but there would still be plenty of incentive to cheat in other ways, by understating/hiding the amount of income or overstating/fabricating deductions.
Well, but this is a problem that always exists and somehow the system gets by nonetheless.
However, by taxing all income equally, you are removing the incentive to try to hide one type of income under the guise of another. Otoh, it is relatively easy to check that someone who did not have some money or asset now has it.
Quote from: grumbler on October 19, 2016, 11:43:24 AM
Quote from: Berkut on October 19, 2016, 10:52:38 AM
Quote from: Tamas on October 19, 2016, 10:47:32 AM
QuoteIf we assume that the overall taxation rate is a constant, then presumably if they tax you more at death, they are taxing you less at earning.
If you do not make that assumption, then we are not arguing about what kind of tax is better, but overall taxation levels, which is a completely different discussion.
Even if we assume that, one does probably not come from the other.
I guess it heavily depends on the country in question but I doubt anything but an obscenely high inheritance tax could compensate for any noticeable decrease in any earning-side taxes, unless you talk about replacing another minor tax with an inheritance tax.
And in that case, my previous argument stands: there are far better taxes in terms of their level of impact on citizens. For example, a tax on dividends (while still under my moral issues of double taxation, but whatever) is far more fair as it does not result in an unexpected and disproportionate financial strain for the non-privileged.
The moment you start using words like "fair" your argument is pretty toast. That is purely subjective.
And how is an inheritance tax "unexpected"? Are you thinking your parents will never die?
Finally, most inheritance taxes are specifically designed to handle issues like property taxes on family homes and businesses. There is typically a very large floor under which there is no tax - I think in the US it is something obscenely high like a million or so.
Death and taxes are supposed to be the two things we can all count on - taxes on death ought to be pretty darn non-surprising, and should in fact be planned for...
And the argument that receiving a behest results in "an unexpected and disproportionate financial strain for the non-privileged" is ludicrous on the face of it; if receiving the behest would be too great an imposition, the heir could simply refuse the behest and have no strain whatsoever.
Admit it, grumbler, you wrote that post just to be able to use the word "behest". :P
Quote from: Valmy on October 19, 2016, 12:07:25 PM
Quote from: Gups on October 19, 2016, 11:03:41 AM
Quote from: Berkut on October 19, 2016, 11:00:08 AM
Quote from: The Minsky Moment on October 19, 2016, 10:59:20 AM
The federal estate tax exemption is $5.45 million
That is just ridiculous.
It really is.
It's £325,000 here. The rate is 40%.
That sounds excellent for Marty's billable hours :P
But even that rate strikes me as something people could manage. Marty would talk about just taking everything over a certain amount in the past.
Yeah but I changed my view on that.
Quote from: Hamilcar on October 19, 2016, 12:32:34 PM
I think a wealth tax, especially one increasing somewhat at higher net worths is a sensible way to approach the issue. Since it applies to net worth, it's harder to avoid it using schemes and exemptions and a progressive version means that the accumulation of wealth at the bn+ level becomes harder, at least to maintain that level for the long term.
My problem with wealth tax is that it makes it more difficult to retire once you have hit the jackpot.
Quote from: alfred russel on October 19, 2016, 08:53:12 PM
I do sort of think there is a middle class value judgment common in this type of discussions. "true virtue is through hard work and making your own way like I"m doing/trying to do! A kid knowing he is getting a multimillion trust fund won't push himself to work hard!" It is just taken for granted that jet setting around the world to do coke off of models tits in five star hotels is somehow less cool than working your ass off in a cube and sucking up to a loser boss.
Nah, I consider poor hard working people to be highly immoral as they squander their once-in-the-lifetime gift of life on a shitty standard of living.
Sure, be my guest and spend all your money on models and drugs, but do so with money you earned yourself.
In other words, my dislike of inheritance is a part of my general hatred for family as a basic social unit and my desire to destroy it.
Also, leaving inheritance to others is, generally, something that should be frowned upon.
Whether you believe that you have an immortal soul or we only get one life and it's oblivion after death, the only thing that counts is our experiences. So one should spend money one owns on enriching those experiences. Leaving money and assets to others, to inherit them on our death, essentially means you are trading your own experiences for someone else's. And refusing to develop oneself when given an opportunity to experience something is the only sin worth condemning.
That's why I do not blame heirs who squander their parents' inheritance - that's the only sensible thing to do.
Quote from: alfred russel on October 19, 2016, 08:53:12 PM
I do sort of think there is a middle class value judgment common in this type of discussions. "true virtue is through hard work and making your own way like I"m doing/trying to do! A kid knowing he is getting a multimillion trust fund won't push himself to work hard!" It is just taken for granted that jet setting around the world to do coke off of models tits in five star hotels is somehow less cool than working your ass off in a cube and sucking up to a loser boss.
Some people may, indeed, share your middle-class moral judgement, but I base my stance on what I see as the overall benefit to society that comes from people producing as well as consuming. Having more money chasing a set amount of goods and services leads to inflation. That's not really a hard-and-fast rule, of course: we don't look see youngsters or retired persons, for instance, as a social negative because they only consume.
Some day the average person will probably be mostly consuming, as automation makes work optional, so your value system will probably need adjustment.
But, mostly, I am talking about the least-distorting method of raising taxes. There's no moral stance on my part there, either. As I noted, there may be collection reasons why taxing estates is a bad idea.
Quote from: Martinus on October 20, 2016, 04:40:25 AM
Admit it, grumbler, you wrote that post just to be able to use the word "behest". :P
:ph34r:
Quote from: Martinus on October 20, 2016, 04:56:41 AM
Also, leaving inheritance to others is, generally, something that should be frowned upon.
Whether you believe that you have an immortal soul or we only get one life and it's oblivion after death, the only thing that counts is our experiences. So one should spend money one owns on enriching those experiences. Leaving money and assets to others, to inherit them on our death, essentially means you are trading your own experiences for someone else's. And refusing to develop oneself when given an opportunity to experience something is the only sin worth condemning.
That's why I do not blame heirs who squander their parents' inheritance - that's the only sensible thing to do.
Yes, if one is inherently selfish.
Marty teaches us every day new ways to be repulsive.