House votes to end federal estate taxes

[AmbitV]

Originally posted by: SuperTool
Because income tax redistributes income, but not wealth. Estate tax redistributes wealth. That's a good thing, IMO.

First you argue for the estate tax by saying inheritances are "income" to the heir. Now you say it's good because it redistributes wealth. So which is it? If it's wealth redistribution you're after, then there's no point in waiting for the guy to die. You can tax the wealthy while they're still alive - what would be the difference?

Regardless, at least you're being honest with your justification. You're basically advocating a Robin Hood position of taking from the rich to give to the poor. Although I disagree with it, at least it's a more coherent position than those who cite heirs being unproductive.

 

[SuperTool]

Originally posted by: Mill

Originally posted by: SuperTool
Because income tax redistributes income, but not wealth. Estate tax redistributes wealth. That's a good thing, IMO.

Yeah, because that worked so well in your home country! :roll:

No, but it worked so well in yours. The 20th century US economic boom occured in a time of very high marginal tax rates, what the conservatives would call wealth redistribution.

 

[imported_redlotus]

Originally posted by: AmbitV

Originally posted by: SuperTool
Because income tax redistributes income, but not wealth. Estate tax redistributes wealth. That's a good thing, IMO.

First you argue for the estate tax by saying inheritances are "income" to the heir. Now you say it's good because it redistributes wealth. So which is it? If it's wealth redistribution you're after, then there's no point in waiting for the guy to die. You can tax the wealthy while they're still alive - what would be the difference?

Regardless, at least you're being honest with your justification. You're basically advocating a Robin Hood position of taking from the rich to give to the poor. Although I disagree with it, at least it's a more coherent position than those who cite heirs being unproductive.

You make a good point, Ambit. Although I disagree with your earlier post that wealth redistribution can be the only honest justification for an estate tax, so let's remove that from the equation. We can do this by reforming the estate tax without disposing of it entirely.

What I propose is an estate tax on all estates, large, small, or medium sized. This removes the 'Robin Hood' argument completely. All inheritors would then have to report any inheritance as income on their tax returns and pay income taxes per the normal income tax schedule.

Now, since we don't want to tax so much that it causes undue hardship, there have to be a few clarifications to this:
1. This law would not apply to surviving spouses. After all, the entire estate belonged to both partners equally, so no real assets have exchanged hands. (On a side note, repubs should love this as it encourages marriage)
2. The reportable inheritance income could be spread over x number of years. I'm not sure what x should be, but for the sake of argument, let's call it 10 years. This should help prevent those in poverty from having to pay huge amount of taxes all in one year.
3. Children under the age 18 would be able to defer the taxes until the year of their 18th birthday. For each year that said child is under legal age, he/she could deduct a standard cost-of-living amount from the total inheritance. Once 18, that person could also spread the reportable inheritance income over the same x number of years. Although the spirit of this clarification is to make sure that orphaned children are not unfairly robbed of their needed living expenses, I feel that it's not unjustifiable to grant the same exemption to those minors who receive an inheritance from people outside of their immediate family.

I am sure that I am forgetting something, so if anyone can think of any other 'undue hardship' case, I'd be glad to hear it.

Now the question is would this type of taxation be more palatable(sp?) to everyone, or does it concede too much to one side or the other?

 

[HeaterCore]

HC, I enjoyed the dicussion, thanks for being a calm rational voice.

Like my father always reminded me, "If you remain reasonable, and near the center, you might be wrong -- but at least you won't be an asshole."

nothing you've said justifies an estate tax. Facts are not the same thing as justifications.

Absolutely true, though hopefully facts inform one's positions. (Although, taking a quick look around, I'm not so sure....) Hence the first line of my original post. In general, I try to argue facts rather than ideology. Facts can be argued without people going for the throat; and the better we all understand the factual issues behind political debates, the more informed and reasonable a later values-based debate will be. Maybe none of us change our opinions, but at least we understand the issues better.

Call it the anti-Crossfire principle.

Only if you assume a wealth redistribution principle can you then conclude that an estate tax is justified.

Not necessarily. I could value balanced budgets, for example, and make a deliberate and considered decision that the estate tax is one of the least painful means of keeping a steady revenue stream.

And yes, I favor some serious budget cuts as well. I wish I didn't have to say that, but I've noticed that on this forum you're either a gun-toting, bible-thumping racist conservative or a whiny anti-American neocommunist liberal. I refuse to be either.

-HC-

 

[AmbitV]

Originally posted by: HeaterCore

HC, I enjoyed the dicussion, thanks for being a calm rational voice.

Like my father always reminded me, "If you remain reasonable, and near the center, you might be wrong -- but at least you won't be an asshole."

nothing you've said justifies an estate tax. Facts are not the same thing as justifications.

Absolutely true, though hopefully facts inform one's positions. (Although, taking a quick look around, I'm not so sure....) Hence the first line of my original post. In general, I try to argue facts rather than ideology. Facts can be argued without people going for the throat; and the better we all understand the factual issues behind political debates, the more informed and reasonable a later values-based debate will be. Maybe none of us change our opinions, but at least we understand the issues better.

Call it the anti-Crossfire principle.

Only if you assume a wealth redistribution principle can you then conclude that an estate tax is justified.

Not necessarily. I could value balanced budgets, for example, and make a deliberate and considered decision that the estate tax is one of the least painful means of keeping a steady revenue stream.

And yes, I favor some serious budget cuts as well. I wish I didn't have to say that, but I've noticed that on this forum you're either a gun-toting, bible-thumping racist conservative or a whiny anti-American neocommunist liberal. I refuse to be either.

-HC-

1) I'd rather be right and considered an "asshole". I seek the truth, not popularity.

2) I agree that facts should inform one's positions. My point is that the facts you mentioned didn't necessarily bring anything new to the discussion. Maybe some other people here are against the estate tax because, in their opinion, it affects farmers/middle-class, but as I said, I don't hold that view.

3) Even if one were to take the value of balanced budgets as an ostensible reason for levying the estate tax, that position would still require an implicit wealth redistribution principle. That is, one would still have to justify why taking from the wealthy is "the least painful". If "balancing the budget" were my sole objective, I could levy any number of illogical taxes - taxes on gays, jews, minorities. The only reason why an estate tax might appear more palatable than these alternatives is an implicit assumption of wealth redistribution.

4) I've made two threads in politics and news, and from that you infer I'm "either a gun-toting, bible-thumping racist conservative or a whiny anti-American neocommunist liberal". This reasoning alone tends to taint the credibility of any argument you might give.

 

[Mill]

Originally posted by: AmbitV

Originally posted by: HeaterCore

HC, I enjoyed the dicussion, thanks for being a calm rational voice.

Like my father always reminded me, "If you remain reasonable, and near the center, you might be wrong -- but at least you won't be an asshole."

nothing you've said justifies an estate tax. Facts are not the same thing as justifications.

Absolutely true, though hopefully facts inform one's positions. (Although, taking a quick look around, I'm not so sure....) Hence the first line of my original post. In general, I try to argue facts rather than ideology. Facts can be argued without people going for the throat; and the better we all understand the factual issues behind political debates, the more informed and reasonable a later values-based debate will be. Maybe none of us change our opinions, but at least we understand the issues better.

Call it the anti-Crossfire principle.

Only if you assume a wealth redistribution principle can you then conclude that an estate tax is justified.

Not necessarily. I could value balanced budgets, for example, and make a deliberate and considered decision that the estate tax is one of the least painful means of keeping a steady revenue stream.

And yes, I favor some serious budget cuts as well. I wish I didn't have to say that, but I've noticed that on this forum you're either a gun-toting, bible-thumping racist conservative or a whiny anti-American neocommunist liberal. I refuse to be either.

-HC-

1) I'd rather be right and considered an "asshole". I seek the truth, not popularity.

2) I agree that facts should inform one's positions. My point is that the facts you mentioned didn't necessarily bring anything new to the discussion. Maybe some other people here are against the estate tax because, in their opinion, it affects farmers/middle-class, but as I said, I don't hold that view.

3) Even if one were to take the value of balanced budgets as an ostensible reason for levying the estate tax, that position would still require an implicit wealth redistribution principle. That is, one would still have to justify why taking from the wealthy is "the least painful". If "balancing the budget" were my sole objective, I could levy any number of illogical taxes - taxes on gays, jews, minorities. The only reason why an estate tax might appear more palatable than these alternatives is an implicit assumption of wealth redistribution.

4) I've made two threads in politics and news, and from that you infer I'm "either a gun-toting, bible-thumping racist conservative or a whiny anti-American neocommunist liberal". This reasoning alone tends to taint the credibility of any argument you might give.

Ambit, I think you are taking his post the wrong way. I don't think he was implying that you were a racist conservative or anything at all like that. He was making a broad based statement about how he views himself as being a moderate.

 

[Mill]

Originally posted by: SuperTool

Originally posted by: Mill

Originally posted by: SuperTool
Because income tax redistributes income, but not wealth. Estate tax redistributes wealth. That's a good thing, IMO.

Yeah, because that worked so well in your home country! :roll:

No, but it worked so well in yours. The 20th century US economic boom occured in a time of very high marginal tax rates, what the conservatives would call wealth redistribution.

Do you have any proof of this? People always forget that Clinton cut taxes too... and reduced government spending. By your logic, that should have put us in Economic hell.

 

[AmbitV]

Originally posted by: Mill

Originally posted by: SuperTool

Originally posted by: Mill

Originally posted by: SuperTool
Because income tax redistributes income, but not wealth. Estate tax redistributes wealth. That's a good thing, IMO.

Yeah, because that worked so well in your home country! :roll:

No, but it worked so well in yours. The 20th century US economic boom occured in a time of very high marginal tax rates, what the conservatives would call wealth redistribution.

Do you have any proof of this? People always forget that Clinton cut taxes too... and reduced government spending. By your logic, that should have put us in Economic hell.

It goes both ways - some argue that the real economic boom in the 20th century came only after marginal rates were lowered drastically by Reagan.

But there are so many factors involved that just looking at marginal tax rates is myopic. For instance, technological/scientific discoveries obviously played a huge factor in the economic boom, and probably had little to do with tax policy.

 

[AmbitV]

Originally posted by: redlotus

Originally posted by: AmbitV

Originally posted by: SuperTool
Because income tax redistributes income, but not wealth. Estate tax redistributes wealth. That's a good thing, IMO.

First you argue for the estate tax by saying inheritances are "income" to the heir. Now you say it's good because it redistributes wealth. So which is it? If it's wealth redistribution you're after, then there's no point in waiting for the guy to die. You can tax the wealthy while they're still alive - what would be the difference?

Regardless, at least you're being honest with your justification. You're basically advocating a Robin Hood position of taking from the rich to give to the poor. Although I disagree with it, at least it's a more coherent position than those who cite heirs being unproductive.

You make a good point, Ambit. Although I disagree with your earlier post that wealth redistribution can be the only honest justification for an estate tax, so let's remove that from the equation. We can do this by reforming the estate tax without disposing of it entirely.

What I propose is an estate tax on all estates, large, small, or medium sized. This removes the 'Robin Hood' argument completely. All inheritors would then have to report any inheritance as income on their tax returns and pay income taxes per the normal income tax schedule.

Now, since we don't want to tax so much that it causes undue hardship, there have to be a few clarifications to this:
1. This law would not apply to surviving spouses. After all, the entire estate belonged to both partners equally, so no real assets have exchanged hands. (On a side note, repubs should love this as it encourages marriage)
2. The reportable inheritance income could be spread over x number of years. I'm not sure what x should be, but for the sake of argument, let's call it 10 years. This should help prevent those in poverty from having to pay huge amount of taxes all in one year.
3. Children under the age 18 would be able to defer the taxes until the year of their 18th birthday. For each year that said child is under legal age, he/she could deduct a standard cost-of-living amount from the total inheritance. Once 18, that person could also spread the reportable inheritance income over the same x number of years. Although the spirit of this clarification is to make sure that orphaned children are not unfairly robbed of their needed living expenses, I feel that it's not unjustifiable to grant the same exemption to those minors who receive an inheritance from people outside of their immediate family.

I am sure that I am forgetting something, so if anyone can think of any other 'undue hardship' case, I'd be glad to hear it.

Now the question is would this type of taxation be more palatable(sp?) to everyone, or does it concede too much to one side or the other?

Your system would make sense, if you assume that inheritances should be treated the same as any other taxable income. The argument here is no longer one of wealth redistribution, but one of treating inheritances as income, and I already pointed out earlier that I disagree with this. In my view, there is simply no reason to assume this. Even the current system (and even the system before Bush) recognizes this - the tax rates and exemptions on inheritances are unlike that of any other taxable income.

When an heir instantly inherits millions by right of birth, that is in no way comparable to other "taxable income" - i.e. wages, salaries, interest, capital gains.

 

[SuperTool]

Originally posted by: AmbitV

Originally posted by: Mill

Originally posted by: SuperTool

Originally posted by: Mill

Originally posted by: SuperTool
Because income tax redistributes income, but not wealth. Estate tax redistributes wealth. That's a good thing, IMO.

Yeah, because that worked so well in your home country! :roll:

No, but it worked so well in yours. The 20th century US economic boom occured in a time of very high marginal tax rates, what the conservatives would call wealth redistribution.

Do you have any proof of this? People always forget that Clinton cut taxes too... and reduced government spending. By your logic, that should have put us in Economic hell.

It goes both ways - some argue that the real economic boom in the 20th century came only after marginal rates were lowered drastically by Reagan.

But there are so many factors involved that just looking at marginal tax rates is myopic. For instance, technological/scientific discoveries obviously played a huge factor in the economic boom, and probably had little to do with tax policy.

You can't ignore the 1950's which were huge boom times for America with very high marginal tax rates, and I believe high estate tax rates, which financed the postwar infrastructure buildup, education for GI's returning from war, propping up poswar Europe, etc. Taxing the high earners to pay for educating GI's with the GI bill was wealth redistribution. Marshall plan was wealth redistribution. Most taxation and government programs are wealth redistribution. I don't necessarily have a problem with it.

 

[HeaterCore]

4) I've made two threads in politics and news, and from that you infer I'm "either a gun-toting, bible-thumping racist conservative or a whiny anti-American neocommunist liberal". This reasoning alone tends to taint the credibility of any argument you might give.

Yeesh, way to prove my point. I was just trying to head off the inevitable assumption that a person is either a hard-line liberal or conservative due to a single expressed opinion, and expressing my refusal to make that assumption about anyone else. Besides, you're assuming I've actually read anything else you've written.

Anyhoo, rest assured I wasn't attacking you or anyone else.

1) I'd rather be right and considered an "asshole". I seek the truth, not popularity.

Who said I wasn't right? I just said I prefer not to be a prick about it.

And being an asshole -- as opposed to being considered one -- is always wrong. I mean, that's sort of implicit in the epithet, eh?

If "balancing the budget" were my sole objective, I could levy any number of illogical taxes - taxes on gays, jews, minorities. The only reason why an estate tax might appear more palatable than these alternatives is an implicit assumption of wealth redistribution.

How's that? The former is racial discrimination, bias based upon one's birth; the latter could still be construed as discrimination of a sort, but it's based upon an objective criteria -- a baseline financial position -- that is itself nondiscriminatory. I can stop being poor, or being rich, but I can't stop being black or Jewish. (Or Lenny Kravitz.) They're entirely different things.

Besides, how can that be the "only" reason? I mean, if I need to raise revenues and decide to do so by raising corporate taxes, am I anti-corporate? If I increase the tax burden on the middle class by eliminating, say, the child tax credit, am I against the middle class? If I drastically cut the top marginal income tax rates but leave untouched the payroll tax, which takes a bigger cut from 40 percent of all taxpayers than does the income tax, am I against the poor?

For that matter, if I refuse to restrain spending in the least while repeatedly cutting taxes in the face of unprecedented deficits, am I discriminating against the future generations who will have to pay off my debt?

You've got to make choices somewhere. So, under your approach to the question, who would you "discriminate" against?

-HC-

 

[AmbitV]

I can stop being poor

Really? Please do tell how, because the large portion of the world living in poverty wants to know.

Besides, how can that be the "only" reason? I mean, if I need to raise revenues and decide to do so by raising corporate taxes, am I anti-corporate? If I increase the tax burden on the middle class by eliminating, say, the child tax credit, am I against the middle class? If I drastically cut the top marginal income tax rates but leave untouched the payroll tax, which takes a bigger cut from 40 percent of all taxpayers than does the income tax, am I against the poor?

For that matter, if I refuse to restrain spending in the least while repeatedly cutting taxes in the face of unprecedented deficits, am I discriminating against the future generations who will have to pay off my debt?

You've got to make choices somewhere. So, under your approach to the question, who would you "discriminate" against?

I'm not sure I understand your point here. It seems you are admitting that you "discriminate" against the wealthy.

 

[AmbitV]

BTW if you think the examples I came up with aren't based on "objective criteria", think of the professions people choose. Or even the clothes people choose to wear. It would be illogical and indeed meaningless to levy taxes on people who wear red shirts simply to "balance the budget".

 

[HeaterCore]

Really? Please do tell how, because the large portion of the world living in poverty wants to know.

A combination of hard work, education, persistence, and usually a small spark of luck. That's the American way, right?

Obviously it's easier to be born Paris Hilton...but then again I'd trade my decent salary and personal dignity and self-respect for her undeserved fortune any day.

I'm not sure I understand your point here. It seems you are admitting that you "discriminate" against the wealthy.

Well, by the definition of discrimination you propose, sure I do. My actual point was that any change in the tax code "discriminates" against a certain cohort; every choice will benefit some more than others. Short of a flat tax, which has its own problems, there's simply no way around "discrimination" as you define it.

BTW if you think the examples I came up with aren't based on "objective criteria", think of the professions people choose. Or even the clothes people choose to wear. It would be illogical and indeed meaningless to levy taxes on people who wear red shirts simply to "balance the budget".

OK, now it's my turn to not follow you. The red shirt example might make sense if the nation was in desperate need of red shirts and was taking those. But that's not what you're getting at, I think. If you're trying to say that levying a tax on the wealthy rather than on the poor is arbitrary, or "illogical and meaningless," well, I'd obviously have to disagree. I mean, you can't get blood from a stone, eh?

-HC-

 

[imported_redlotus]

Originally posted by: AmbitV
Your system would make sense, if you assume that inheritances should be treated the same as any other taxable income. The argument here is no longer one of wealth redistribution, but one of treating inheritances as income, and I already pointed out earlier that I disagree with this. In my view, there is simply no reason to assume this. Even the current system (and even the system before Bush) recognizes this - the tax rates and exemptions on inheritances are unlike that of any other taxable income.

When an heir instantly inherits millions by right of birth, that is in no way comparable to other "taxable income" - i.e. wages, salaries, interest, capital gains.

A'right. I guess we'll have to live with the fact that we agree to disagree on that point. This, however, just brings things back to my original question (and I aim this at everyone, not just Ambit): why is the estate tax such a rub with the repubs? There are so many taxes out there that, one, make less sense than an estate tax and, two, would affect a larger number of people (rich, middle-class, and poor alike) if repealed or cut. For example, wouldn't it make more sense to cut taxes on retirement disbursements than to repeal the estate tax?

I guess what I'm trying to say is 'help me understand this.' And I am saying this in all honestly, because I don't understand.