In the midst of a severe economic crisis that is, among other things, depressing federal tax revenues and adding to the national debt, the debate over the estate tax has flared up again. The basic question is whether the exemption will be raised from $1 million – where it was in 2002-03 and where it is scheduled to return after the Bush tax cuts expire – to $3.5 million (Obama) or $5 million (Lincoln-Kyl) per person; there is also disagreement over whether the marginal rate should be 35% or 45%. (Note that even with Obama’s proposed 45% tax rate, the average effective tax rate on estate would be 19%, because of the $3.5 million exemption.)
There is plenty of debate over this already, so I will confine myself to three points.
1. It’s not a question of whether the estate tax is good or bad; it’s a question of whether it’s better than the alternative. If you take away $100 billion of tax revenue (that’s the Times’s figure – not sure how many years that is over), you have to add it to the debt or raise it some other way. Compared to raising marginal tax rates on income, the estate tax almost certainly has less impact on incentives to work, for a few reasons: (a) most people with that much wealth make most of their money from investments, not working; (b) most people – even high earners who pay the top marginal income tax rates – are unlikely to ever pay the estate tax, and even if they do, it will be decades after the current period; and (c) to the extent that that people plan to consume or donate their marginal income (like Bill Gates), the estate tax doesn’t affect incentives to work at all. The estate tax has more impact on what people do with their money once they’ve made it: it encourages contributions to charity, but arguably it encourages consumption instead of saving.
2. The estate tax has the unusual property that even though it only affects the super-rich (and thereby benefits everyone else), many people who are completely unaffected by it are against it. Part of this is undoubtedly due to the fact that far more Americans believe they will someday become rich than actually will become rich. (There was a famous poll cited in The Economist a long time ago according to which some large proportion of Americans believed that they were already or would someday be in the top 1% of the population by wealth.) If this economic crisis has any salutary effects, perhaps one of them will be to convince many people that they are not rich enough to pay the estate tax and that, even in this land of opportunity, they are statistically unlikely ever to be rich enough to pay the estate tax – and therefore they should start voting in their own interests and not the interests of celebrities. (And even if you think you will be rich someday, shouldn’t you hedge against that not happening, rather than the opposite?) Put another way, the movement to repeal the estate tax should have crested along with the stock market.
3. Like most Silicon Valley entrepreneurs, when I started my company, one of the motivations was the small chance of someday making a lot of money. Back in 2001, none of us looked around the table and said, “You know, I would work really hard at this startup, but since I’m going to have to pay the estate tax if we’re successful, I’m just going to phone it in.”
The Baseline Scenario 
If your parents give you a tax-free 3.5 million, you don’t have to work anayway, because you will get n exceptional income from interest alone.
3.5 million, therefore, is plenty. Plenty.
I would add to your comments but you have pretty much covered the subject. As John Grisham says, “people live poor and vote rich”. I live in Tn and during the Bush years I knew people who lived in single wides and listened Rush Limbaugh and thought the liberals were going to take half their home. I’m also amazed at the number of the younger generation who at pretty much certain they are going to be wealthy someday. The odds are simply against it- about 1 in a 1000 at best.
Excellent points all, esp that you not we are talking about what to implement among many *alternatives*.
I would argue however that to maximize incentive as well as potential revenues from the tax you want to have progressive tax systems so that a biz owner will continue to work hard (and thus create more jobs and economic good stuff) even after his biz value is greater than the 3.5 million.
You examine the subject of the estate tax from the point of view of an entrepreneur and investor. But you do not see it from the point of view of the farmer, who must sell off the family property to pay the estate taxes on it. It is clear that confiscatory estate taxes destroys the family farm, and encourages the consolidation of farms into larger and larger ones controlled by conglomerates. So we make a new generation of tenant farmers, perhaps out of the legions of illegal immigrants pouring over our borders. If this is what we want, I would rather it be done directly through legislation, rather than the backdoor method of estate taxes.
primary purpose is to keep excessive, exclusive wealth from being passed down from generation to generation; ie to keep us from having a wealthy aristocracy. that would justify a limit of > $10M. after that it’s just another source of revenue for the govt and one of the few that actually increases velocity of money.
personally i would rather see lower ceilings if this would offset taxes elsewhere. i think the $1.2M limit is fine. disclosure: at that level it is likely to affect me through my parents; at the $3.5M level it is not. but it will probably come close to balancing out over my lifetime in lower taxes, no?
As a financial advisor let me first say, I don’t care where they put the number, just as long as we get one. We’ve been living in no mans land for about a decade, where no body can really plan for the Estate tax because no one knows where it is. Also, helping people avoid the estate tax or at least minimize it is one of the most lucrative parts of a financial planning practice, so the sooner we have a firm number the better for me.
That said, the Estate tax is probably the most voluntary tax there is. I’m certain there have been, “family farmers” and small business owners who had equipment etc. that put them over the former modest limits and screwed their families out of the family business, but that’s a lack of awareness and planning by the business owner, not a predatory government. Take whatever the put the tax at and at least double it for married couples, and probably multiply it by 4, once a competent financial planner gets done setting up ILITs, QPRTs, GRUTs, GRATs and family partnerships. I have yet to have a client’s beneficiaries lose inheritance to the Federal Estate Tax. So in reality they’re arguing about $14M vs. $20M. Boo Hoo to the poor saps in that tax bracket.
It’s called life insurance. Buy enough to pay the tax and put it in a trust in the name of your children. Obviously you have to set it up at a reasonably young age to do it, but it’s not tremendously expensive. Besides, fair use value of farm property means you can multiply the earnings of the farm by a discount rate, usually in the 8% range to calculate the value of the farm, you don’t have to add up all the equipment and land value. So in order to have a farm worth more than $3.5 million dollars, if you have a single owner (and if you’re a middle aged person who wants to pass the farm along you should have started giving shares to your kids as soon as they turned 18 anyway) you would have to earn after all expenses approximately $280,000 a year. If you earn that much and you don’t pay for tax and financial advice then shame on you.
Now when the cap was $650,000 back in the mid-90’s that was a completely different story. But not at $3.5M.
Some times the ignorance is overwhelming. The estate tax hits capital very hard, reducing productive investment. It particularly hurts small family business who may have book assets worth that much (at market values) but not the cash to pay the taxes. The estate tax is a huge contributor to the disappearance of the family farms who had large holdings in land and barns, but no cash.
And why should a family, that has already paid tax on the income and accumulation, have to pay additional tax to leave assets to heirs? Why should they have to pay 10’s of thousands to attorneys to try to shield it from the taxes.
We are becoming more and more ignorant on capital development and rewarding the producers – we punish them increasingly and reward sloth, waste and inefficiency, and people wonder why for the first time in our history we have 4th and 5th generations being raised on welfare…..
You have to know some old, rich people to understand the real impact of this.
To many of them, it’s deeply offensive to get taxed again on money every cent of which was already fully taxed when they received it, and again annually since then, just because they will be dead. Taxed by a society and a government which, we should note, can offer them at that point no conceivable benefit in exchange.
For many older people, the response is that they will just take no risks, because if they lose the loss is theirs, while if they win the government will tax their gains twice within a short time.
This increase in aversion to risk among people who have a lot of money to invest is not something we need at this time.
This is part of the general pattern under which people who are overtaxed and have the means to do so tend to secede from the life of the general community. Fortunately it’s something ordinary people seem to have a better grasp of than academics, so that ordinary people reject the option to ‘vote their own interests’ in the narrow sense of defining their interest as grabbing at everything they might be able to get.
The estate tax, like all taxes, subtracts from aggregate demand. Lack of aggregate demand is what is driving this recession.
Arguing *for* the estate tax at a time like this is a triumph of ideology over sense.
The estate tax is in place because it drives life insurance sales and because dead rich people can’t vote. It is purely a political device and not a driver of government revenue. It is not a significant part of tax policy.
This debate should be focused on the top marginal rate occurring at the 250K level- this affects far more people and has a disproportionate (and unfair) effect on people from different parts of the country.
3.5mm generating 4% after tax = 140K/year
definitely a good living now (unless you live in ny or ca), but not sure it’s enough not to work.
In 20 years, it won’t be.
a farmer is probably a bad example bc of all the subsidies, but…
why should someone have to buy life insurance to hedge against future taxation? if you think that is a reasonable suggestion, i pity you.
I have an idea. Let’s just not pay any taxes !
The wealthy benefit far more from our current system of government than the poor. Though, most wealthy are too stupid in these matters to understand that.
Good luck protecting your private property, and enforcing a legal system, without a government.
Farming is very much a special case – the return on capital in farms is low compared to other industries. This is by design, because the govt. subsidizes farms to encourage over production (so that if we suffered a drought or crop failure, we would not see real starvation). But in normal times, a comfortable margin of overproduction means lower prices.
Most businesses with >3.5m in capital generate more income than a family farmer. There is a strong case for increasing the limit on family farms.
HOWEVER, I do think that there should be a quid-pro-quo. Once the land is passed down and taxes are avoided, there should be a restriction on the ability of the next owners to split the land and/or parcelize it for construction. If this happens, the current owner should be made immediately liable for a large deferred tax penalty (at current land value).
Society has an interest in supporting family farms, but should not subsidize the conversion of family farms into housing subdivisions, strip malls, and parking lots.
As someone who lives in a high cost of living area, I should like to raise one major issue about the 250k marginal tax rate.
Earning 250k in a city like San Francisco, Boston, or NYC is far different than earning 250k in a place like Pittsburgh, Kansas City, or Alburquerque. Particularly if that 250k results from two working parents (with childcare expenses, which are capped uniformly regardless of the local cost of care).
Thus, many low-tax states like to point at California as an example of govt. run amok, when in fact it is an example of poor states (like the Red South) sucking California dry – while California gets back 77 cents on every dollar of federal taxes, the Red South gets back far more than a dollar for every dollar taxed. The mortgage disaster, I suppose, is California’s revenge.
In any case, there are some other clear issues – among them the fact that the tax on capital gains is so much less than the highest marginal employment tax rate (to the point that Warren Buffett’s secretary pays a higher rate than he does).
Also, there clearly remain some areas where taxes – rather than being a disincentive to productive activities – could serve as a disincentive to unproductive activities (pollution, drug use).
But you are generally correct that the impact of the estate tax is limited because of the effectiveness of estate planning (e.g. life insurance, trusts).
PURPLE: Great idea! Right now, cutting all taxes is the best way to get aggregate demand back to where it needs to be, and fund the private sector’s desire to save through higher Federal deficits.
When inflation ticks up, we can turn the taxes back on.
And here we have the real reason for tinkering with the estate tax numbers. It is not to get at the rich, and it is not really to raise revenue. The real reason for changing the tax laws is to provide jobs for financial advisers. Sure, wealthy farmers can afford to hire a tax adviser to get around whatever the new tax laws say, but what about the smaller farmers. You might remember the save the family farm movement of a decade ago, composed of those who got caught up in the vise of the last effort to reform the estate tax. There are farmers in this country who are not familiar with tax laws, and who have other things to do than hire advisers to think of keeping their farms intact. It is not the rich who are hurt when the tax laws are changed, but the guy in the middle who doesn’t pay attention.
And why should a family, that has already paid tax on the income and accumulation, have to pay additional tax to leave assets to heirs?
Why should someone be able to live a life of opulence and debauchery, never working a single day, just because his or her parents were wealthy?
Do we want a country where everyone has equal opportunities, or not? (Note: Not equal outcomes; just equal chances…)
We can find some other way to address the problem of farmers and small businesses. Oppose the (ongoing) emergence of permanent aristocratic and political families.
“If you take away $100 billion of tax revenue… you have to add it to the debt or raise it some other way.”
Uhm, there is another option, you know.
The exemption should be per inheritor, muting the “dynastic wealth” argument.
If this were in fact true, then I’d agree that farmland should be treated differently from other kinds of wealth. Statsguy’s version of entailment sounds good, although the point is that famrland should be preserved as farmland. Splitting, on the other hand, as long as it’s into smaller farms only, is a good thing which must be encouraged, since America is going to need millions more farmers, and it’s going to need them soon.
However, my understanding is that whenever a reporter tries to find a documented example of a farm, family business, etc. which actually was split up on account of this tax, even the right wing front groups can’t come up with one. Clearly this is just a lie. The one and only agenda here is to protect the feudal prerogatives of pure rent-seeking parasites (isn’t it the Mars heirs and their ilk who fund this?) who shouldn’t be suffered to exist at all.
2. The estate tax has the unusual property that even though it only affects the super-rich (and thereby benefits everyone else), many people who are completely unaffected by it are against it. Part of this is undoubtedly due to the fact that far more Americans believe they will someday become rich than actually will become rich. (There was a famous poll cited in The Economist a long time ago according to which some large proportion of Americans believed that they were already or would someday be in the top 1% of the population by wealth.) If this economic crisis has any salutary effects, perhaps one of them will be to convince many people that they are not rich enough to pay the estate tax and that, even in this land of opportunity, they are statistically unlikely ever to be rich enough to pay the estate tax – and therefore they should start voting in their own interests and not the interests of celebrities. (And even if you think you will be rich someday, shouldn’t you hedge against that not happening, rather than the opposite?) Put another way, the movement to repeal the estate tax should have crested along with the stock market.
This is one of the most successful and sinister accomplishments of American brainwashing.
More and more it’s impressed upon me how we see in America today the historical socioeconomic base for fascism: those who are in fact downwardly mobile but who cling to the magic belief in upward mobility. This type reviles any sense of proletarian class consciousness, or even the reality of downward mobility and class struggle itself, but rather responds rapturously and aggressively to magic formulas which allow them to deny reality and continue to “believe” they’ll someday be rich.
(For those familiar with Rawls’ “veil of ignorance”, here we have the opposite, a veil of social Darwinist faith.)
So the magic formulas they cling to are propaganda, “Drill Baby Drill”, culture war issues (they think opposition to gay marriage will somehow help their pocketbook), the words and notions of religion (the real thing, not so much), conspiracy theories, hatred of any hint of “socialism”, slavishly parroting media demagogues, denying climate change, mindlessly supporting war, any war, and so on.
(In every one of these, even as they deny class war, they are viciously waging it, most of all against themselves.)
All of these have in common:
1. They allow economic elites to manipulate the less intelligent among the economically downward-heading.
2. They do not help the downtrodden with their economic plight. On the contrary, as rational people keep trying to point out (evidently having too much faith in reason), these only increase the pain and accelerate the slide downward, which is of course the real Republican goal.
“There was a famous poll cited in The Economist a long time ago according to which some large proportion of Americans believed that they were already or would someday be in the top 1% of the population by wealth” – sounds like they surveyed their readers.
The argument FOR appears to be, “Lets not worry about the estate tax because it isn’t all that much and is levied only on a few very wealthy people.”
The Phil Ochs argument AGAINST would be,
“And I’m sure it wouldn’t interest anybody
Outside of a small circle of friends”
The estate tax is not a driver of revenue for the government. As tax policy, it is borderline irrelevant in this country.
Two major groups lobby for it- life insurance salesmen who build their careers around helping families fund the payment of estate taxes and financial advisers, accountants, lawyers who build careers around avoiding it. Otherwise, it is a tax that brings in enough money for an aircraft carrier. It affects so few voters that politicians can vote for it without moving any outrage needle.
One good thing it does is that it tends to force philanthropic giving since most individuals think that they are better allocators of capital than the government. As such, they would rather see their earnings go to causes they like rather than having their life’s work wasted funding a museum for flutes.
The tax is purposefully uncertain because it ensures that politicians receive a steady flow of donations on one side from life insurance companies and financial advisers who want to keep it and on the other side, the superwealthy who wnat it abolished.
They will always draft it to have yearly shifts and sunset provisions for this reason.
i guess the phrase ‘bought the farm’ is relevant here, but i’m not sure how.
The farmer thing is a red herring. See the Tax Policy Center for example. At $3.5 million, there would be 100 farms and small businesses that would be affected; at $5 million, there would be 40. So the difference between the two plans affects 60 farms or small businesses. Even then, there is already a provision that allows farms and small businesses to pay the tax over many years, preventing them from having to sell assets to pay the tax.
How does the estate tax subtract from aggregate demand? If anything, it gives rich people the incentive to consume rather than invest, which has the opposite effect.
The issue here is whether or not this makes a difference to the average citizen – the issue is whether or not the policy is moral and constitutional. What you suggest is class warfare a la Marx. Soon, as our nation continues to be destroyed from its own economic policies, the “average” citizen will be so destitute that you and I will surely be a among the wealthy and be primary targets of new policies to fund our bankrupt government. Keep passing the hot potato and eventually it will wind up in your lap. Your comments on entrepreneurship are naive. Many young people, including myself are reconsidering our career paths as those we would normally hold up to as archetypes for success are vilified. Failed business are rewarded. People understand this, even if the basis of their decision is not one specific tax policy. As evidence:
You raise a fair point about splitting, so long as land is preserved as farmland. And there would need to be a reasonable effort to think through and avoid various loopholes.
As to the reality of family farms, here is the data from a 2005 report (data gathered in 2003).
Click to access EIB12c.pdf
I recall a general statistic that small family farms (to be distinguished from large family farms and corporate farms) make up ~40% of production. I can’t find that datapoint, but the data for different crops (30% to 60%) supports that number.
And average farms – counting the huge ones – had only ~400 acres. (“only”) Since the 50’s, however, we’ve seen a decline in total acreage being farmed, confirming that urban sprawl is having an effect. Simultaneously, this has been balanced by increased yields, but the yields may be using some technologies and water supplies that are unsustainable. Also, global population is increasing.
So it would seem that, long term, the govt. (and society) has a strong interest in keeping farmland for farming. However, when a farmer who eeks out 35k-60k a year is being offered 100k an acre to break apart his land into a housing subdivision, it’s hard to expect him to say no unless that farmland is protected.
You are not sure if $140,000 net is enough to avoid working? Most people who do work know that is more than enough, because they live it. And, even if it is not enough, what is the point? Is it somehow more fair to tax working people more so that offspring of the rich do not have to work? And why would anyone conclude the rate will not rise over 20 years?
And, as someone who has set it up, it is very easy to set up trusts so whatever limit exists is multiplied. $3.5 million from a mom and dad is $7 million total.
As an Iowan, I am well aware of the myth that farmers sell their property to pay the estate tax. I realize awards have been offered to anyone who can pinpoint someone who has done this, and the award has never been claimed.
Live poor and vote rich is right. I call them Lottery Republicans, because winning the lottery is the only way Joe the Plumber has to worry about the estate tax.
Your logic appears a bit muddled. First, you equate taxing rich offspring to provide tax cuts for working people with class warfare, and then you complain against bailing out failed businesses.
Can you organize your thoughts, do you support free enterprise or welfare for the rich?
Additionally, by the time Farmer Brown dies, chances are the life insurer will have figured out a way to bankrupt itself and not pay the claim. Having read the paper these last few weeks, it seems as though the insurance carriers are now in the “bail me out too” line in Washington.
AA
Wow, proving the point that people don’t understand the issues, we see all the mistaken arguments trotted out again.
1. The wealthiest families are mostly inheritors, not entrepreneurs. It’s called the Paris Hilton tax, because she didn’t do anything to earn it. The Walton family (Walmart) are worth about $100 billion, Sam created the company, not them.
2. Arguments about small businesses and family farms have already been addressed, yet they keep resurfacing. I’ll get to that.
3. There is an ethical argument to be made about disallowing multi-generational transference of wealth, this has nothing to do with economics. A democracy cannot function properly if a small group can control the political process. This is what the British finally realized and why they broke up the big estates of the landed gentry via death duties. They also got rid of rotten boroughs. The result was the first real democratic governance ever and the rise of the voice of labor in policy making. The economy boomed too (allowing for two wars). It took 50+ years.
The reason the that estate tax issue never dies is because the group of super wealthy families that gains the most from repealing it keeps funding a misinformation campaign to the tune of millions.
You can read about their efforts here:
Click to access EstateTaxFinal.pdf
People just find it unbelievable that just 18 super wealthy families could be behind this whole campaign, but it’s true. The Waltons stand to save $40 BILLION in taxes if the tax is eliminated. Would you spend a few million to defend such a windfall?
Concentration of money leads to buying political influence and we see how well that has worked out for the general population of late.
Unless I am misreading the tables (mea culpa if I am), these numbers are _per year_. The actual size of the constituency that will be affected is somewhat more substantial Over the course of a generation (which is now about 25-30 years), perhaps 1200-3000 will be affected (depending on how many farms/small businesses close to the 2-3 million asset range graduate to the 3.5+ million range).
Click to access T09-0196.pdf
Also, there’s a substantial group of people who think they are worth more than they are, and/or who think they will be millionnaires by the time they die. So if you look at the lower rungs (1-2 million), these are the “hopefuls”.
If the rallying cry is small farms (which it has become), then why not aim for the knees and simultaneously further (a little bit) an important policy objective? (see proposal above) At the minimum, such a policy would offer a needed public relations victory…
Um, isn’t there a capital gains tax in the US? I know there use to be, or did your last President repeal that too? I’m not sure about the US tax code, as I am, thank god, not there.
AA
My god Mario?????????? You mean…..CUT SPENDING ON NONSENSE? That’s a very un-american way of thinking. You must be French? :-)
AA
Finally, some truth…..and reality.
AA
Being forced to sell the farm, and being affected by the tax, are two different things. The current law which amortizes the tax burden over many years addresses the issues of selling the farm, but not the issue of a certain group being affected by the tax.
While not many (or possibly any) family farms are being directly lost due do death, more are being lost due to consolidation/sprawl. The proposal offered above would cost minimal revenue, possibly have some social benefits, and undercut a major political argument.
And which “archetypes for success” are being villified? The only villification I see is some soft lobbing at bankers for feeding at the public trough, from people who really don’t know who to blame. Are there some truly successful, self made people being villified?
Thank you for a concise summary.
Life insurance is a very common vehicle for paying the estate tax with “cheap” dollars, especially through trust arrangements (look up irrevocable life insurance trusts, for example).
It is also very common for people who are property-rich, where the real estate would have to be liquidated to pay the taxes.
I doubt very many people affected by the tax do not have some financial arrangement to minimize the hit of the tax.
I think some people who oppose the estate tax, but are unlikely to be affected by it, oppose it because they perceive it to be unfair.
To Erich-
if you are paying for a mortgage, helping with college and parental health care, 140K/year could be cutting it close in NYC, but yes, having a 3.5mm cushion will get you more than a long way.
There is no guarantee that the exemption will increase in 20 years. Just look at the bang-up job that the gov’t did with the AMT.
So, the real fear is that the wealthy in the US will use their money to corrupt the lawmakers….is that correct? It sounds like you have come full circle, and returned to the baseline problem: you have a nation of corrupt citizens and policymakers. I rest my case….your witness.
AA
What you suggest is class warfare a la Marx.
Marx did not invent nor advocate aggressive class warfare. He analyzed the existing aggressive class warfare being waged by the bourgeoisie against the workers and sought to organize class consciousness among the hitherto victimized workers so they could fight back.
(He was less sure about the peasantry, who he saw as especially manipulable against their own interests. This is perhaps the most relevant angle for this thread, the type the rich elite currently manipulates in America. The best pieces on this are The Class Struggle in France, The 18th Brumaire of Louis Bonaparte, and The Civil War in France.)
You write: “Why should someone be able to live a life of opulence and debauchery, never working a single day, just because his or her parents were wealthy?”
Yes, of course! Who are YOU to decide what someone can or cannot do? It appears you would make a very good government bureaucrat/politician with your completely unadulterated “morals” to impose on the rest of us.
If I work hard to create wealth for myself (paying a huge amount of taxes along the way), why shouldn’t I have to ability to leave that wealth to my family? That is in large part why people work very hard, is it not?
I find the estate tax fundamentally vile. Taxing income twice on a minority population just because the majority can through government by force confiscate that wealth.
I believe Mr. Kwak doesn’t understand why people vote against their own interests. They are voting because they have some sense of right and wrong regarding the estate tax. They vote because they don’t see the confiscation of wealth by the state for redistribution to well connected constituencies as a proper function of government. Perhaps these votes are voting based on a set of values and not simply for their “best interests”.
If the estate tax is justifiable I see no reason that it should not be applied at all income levels.
Whether $3.5Million or $5 Million why does it not take into account the number of heirs? It sure seems to discriminate against families with many children… I guess that is part of why you have less and less children and have to import nurses from abroad to take care of you in your older days.
It is not the accumulation of wealth that is “evil” as you seem to by implying, but the our corrupt government bureaucrats.
And why is it that government is so corruptible or even why would it be beneficial to engage in this corruption? The power of the purse.
The government, through its vast looting of the population, has a huge concentrated amount of cash to disperse to the preferred constituencies whether that be certain companies awarded no-bid contracts or pork spending at local districts.
Do you really believe that YOU are more worthy of those $40B than the Waltons? What more arbitrary justifications do you have for the looting of private property from individuals? Perhaps we should apply a Jew tax upon death? Or maybe one for Democrats? Or perhaps …
while I am a proponent of the Estate Tax (although I am likely to benefit individually if it is gone) there is a better way to avoid aristocracy.
I’m talking about the method we used in the ’40s ’50s and most of the 60’s, the 90% top marginal income rate. This tax rate also has the salutory effect of eliminating the bloating bonuses and salaries of US CEOs. Maybe if we can get CEO/CFO/other top corporate officer salaries back down to “merely” 30x to 60x the wage of the lowest paid worker, we will see more rational behavior on the part of large companies.
Where is your inducement to “loot and run”, after all, when the government will just take 90% of your ill gotten gains in taxes … perhaps you will be motivated to, instead, make decisions that are to the long term benefit of the company.
That’s so stupid it makes my head hurt. Why SHOULDN’T someone be able to enjoy the fruits of their labors?? Who are you to steal it from them, to loot their possessions for your selfish and lazy interests?
Why reward the non-productive and penalize the productive? It only breeds more non-production and encourages the welfare state – which we’ve seen grow enormously in this country the past 50 years….
Look at history, with open eyes. There’s your reason why free market production is always better for everyone….
Uh, the dead can’t spend. The beneficiary’s can’t spend it before it is taxed.
Think before you post.
yeah, cry me a river for old (white) rich people. Didn’t they get us into this mess to begin with? And don’t they have a responsiblity to the society that has allowed them to succeed so spectacularly beyond merely “personal benefit”?
You simply deny history and the facts then. American has always been ‘upwardly moblie’ – we’ve always had poor, but they – for the first 175 years, were improving their lot, their position was replaced by new immigrants. It wasn’t till we started implementing the socialist agenda in the 60’s that we saw the middle class stagnate and the poor class become an institution – now for the 5th and 6th generations – for the first time in our history.
We’ve seen the labs, we KNOW socialism fails to deliver the goods and simply amounts to a power grab by the elite (gov’t). Look at the Koreas, Chinas and Germanys – perfect labs created after WWII. The only difference was the economic system chosen – free markets versus socialist/communist. In EACH case, which lab delivered the most prosperity for the common people, the most freedom, the best health care… etc. We only lessen each one of those the more socialism we adopt.
History doesn’t lie.
Silly really, the estate tax has nothing to do with ‘breaking up big estates’ – and the Walton’s won’t save a dime – there’s tons of estate planning trusts, charitable trusts ect that allow the super rich to escape it – that’s why Paris inhereted a “TRUST FUND” DOH!
What it hurts are the entrepreneurs and small farmers who don’t have the cash to pay the taxes and or afford the high priced lawyers and who wanted to leave something to their heirs.
Next…
“The estate tax has the unusual property that even though it only affects the super-rich (and thereby benefits everyone else), many people who are completely unaffected by it are against it.”
I’d say that’s par for the course for American politics since the Reagan “revolution”. What would be unusual is if Americans actually supported tax policies that were in their own best interest.
As for people who aspire to become rich, they should ask themselves two questions: 1) is it better to be rich and have your ginormous estate taxed when you die or to be middle class and get to pass on your tiny “estate”, and 2) is it easier or harder for you to become rich if you have to pick up some of the tax burden resulting from abolishing or neutering the estate tax?
http://foundationcenter.org/pnd/news/story.jhtml?id=140100009
But hey, that was 2006.
Bullshit?
For starters, since all taxes end up as spending at some point, taxes have no effect on aggregate demand. You take a dollar out of private spending and put it into public spending and GDP doesn’t change. Which dollar is better for future growth is obviously something we can discuss, but such is not knowable a priori. (For example, we can be relatively certain that a dollar spent on a child’s education will do more for GDP 20 years from now than a dollar spent on an investment banker’s penthouse).
Not sure I totally agree with you, judge.
The Waltons definitely availed themselves of a lot of tools.
The tax does break up illiquid estates (through forced sales) like closely held companies and land estates. It actually favors those who have liquidity or investments in publicly traded assets. the use of estate freeze and transfer techniques usually only gets you part of the way there. then life insurance helps mop up the rest of the liability.
One policy question to consider is whether the use of life insurance to fund an estate tax liability is a legitimate use of the tax-favored status of life insurance. It’s almost like paying the estate tax- except that it goes to companies like AIG.
So Paris Hilton controls the political process? We really are doomed then.
Amo and Judge make good points…
On the other hand, living in a caste society doesn’t seem very appealing either.
But the real problem is not living off of ACCUMULATED wealth. The real problem is that the EARNINGS on the accumulated wealth are taxed at a far lower rate than higher tier income. This, more than anything else, propagates a dynastic wealth system.
As to why the tax rates on capital earnings is so low, I submit that it has a lot to do with global international pressure created by the high mobility of capital (and the relatively lower mobility of labor). [This goes beyond the classic Heckscher-Ohlin model; the issue has to do with bargaining power, lack of coordination among state actors, and the ‘race to the bottom’ effect. This is one of the major reasons why seriously wealthy folks favor free trade – because it increases the bargaining power of capital and finance vis-a-vis other sectors (and labor).] Frieden/Rogowski have written a lot about this.
Finally – I must say that I grow irritated with the argument that the framers of the constitution did not intend for wealth to be taxed. Back in the 1790s, most wealth was in the form of land, which was directly taxed on an annual basis. The shift to industrialization made that model impossible, and the tax on trade (tariffs) simply could not keep up.
History does not lie, but history is not actually on your side here.
The poverty rate has a decided downward trend since 1950, then flattens till 1980, then spikes in the 80s (reagan), then declines in the 90s (clinton) then goes back up again under Bush.
Interestingly, the poverty rate seems to be inversely proportional to the debt-to-gdp ratio. Debt is very low through 1970s, then spikes in the 80s, flattens under Bush I and drops under Clinton, then debt spikes dramatically under Bush II.
Prior to the 60s, we have worse data, but many confounding effects – among them FREE LAND. In every depression, opportunity to move West was always open – until the late 19th century and early 20th century, when we had the emergence of a massive underclass (sweatshops, child labor, the Pinkertons vs. unions, remember your history books?).
Meanwhile, you seem to be citing Korea, Germany, and China… none of which are as free market as the US. Korea had and still has a strong industrial policy (which was panned by Friedmanomicons). China has a massive industrial policy and huge intervention – it is a statist market economy with some of the trappings of socialism. Germany is probably corporatist and socialist, more “managed market” than free market.
So yes, history does not lie. But it does not say what you seem to think it is saying.
Amo,
Well, I don’t think that I am entitled to anything from the Waltons estate, as I am not an American……for which I am greatful everyday. And, I am not familiar with, what did you call it? The “Jew” tax? What is that, exactly? I believe Adolph Hitler imposed such a tax years ago, didn’t he? Or is my history off?
AA
Why SHOULDN’T someone be able to enjoy the fruits of their labors??
Of course you should, and can. But we are not talking about that. We are talking about people enjoying the fruits of somebody else’s labors. I find it generally distasteful when anyone receives something for doing nothing, and that happens to include the children of the wealthy.
You cannot “penalize” a dead person. Your claim on the world and its goods ends when you leave it, I am sorry to say. Here in America, we like to think that what matters is who you are, not who your family is. Or we did once upon a time.
Finally, the “double taxation” argument is complete nonsense. Are you “double taxed” by sales taxes because you already paid income on the money? Is your employer “double taxed” when they pay corporate tax on income followed by income tax to you?
Your children are not you. Money transferred from you to them is not fundamentally different from money transferred to you by your employer, and it should (obviously) be taxed at least as much. You can argue for lower income taxes because you want to encourage labor and production. But your children do not produce anything in exchange for their inheritance, so taxing it higher actually makes more sense in terms of incentives.
So yes, you can spend your money however you want. You can hire laborers to take care of your house, you can pay someone to drive your car, or you can simply give the money to your kids… But in all of these cases, the recipient pays taxes on the income. Kind of obvious, actually.
So, if you can’t take it with you, should everyone’s property go to the government upon death? Why should this principle only apply to the wealthy?
No, in 2000 there were about 100,000 estate tax returns involving property worth more than $2 million, according to the Congressional Budget Office. Of these, 6 percent involved property involved in agriculture, horticulture or fisheries. That looks like a sizeable number would be affected by this than the Tax Policy Center’s 100 farms.
Source: http://www.cbo.gov/ftpdocs/65xx/doc6512/07-06-EstateTax.pdf
So, if you can’t take it with you, should everyone’s property go to the government upon death?
OK, I concede that would be extreme. But I still think all of it should be taxed as ordinary income at least. Lottery winnings are the closest analogy; how do we tax those?
And I never understood the rationale for omitting the first N million from taxation. Why do I pay higher taxes on money I earn than someone who inherits millions for doing nothing?
Lots of people “earn” money for doing nothing while they are alive too. Both rich and poor.
This tax does not do any of the things the people who are for it or against it claim it does. It does not generate enough tax revenue to make or break the federal government. It does not level the playing field. And, as MK pointed out above, it is the most voluntary tax there is (aside from income tax, I guess).
We can debate the moral or economic issues of the tax all we want, but at the end of the day, both Republicans and Democrats get into office owing someone with resources. If the tax survives, there will be some loophole to undermine it.
There is a very rapid falloff between 2 million and 3.5 million. The 100 number from the Tax Policy Center appears to be the number of small business/farms above 3.5 million in assets that would be affected per year.
Also, note that this is NOT total affected estates. This is small business – to qualify as a small business, you need to have less than 5 million in assets under their definition.
Also, it’s hard to tease apart “wealthy people who own farms” from people whose primary wealth and source of income is the farm they own.
So, the 100 number appears to be the number of business/farms (with farming as the primary activity/income source) with assets between 3.5 and 5 million dollars that would be affected annually. This is not necessarily inconsistent with the CBO report.
That first sentence did not exactly say what I meant it to…. What I mean is earned income (aside from inherited resources) is not always derived from actual labor.
I am appalled and disgusted by the comments I see here.
We are told average Americans should vote “in their best interests” which means taking away assets of “the super rich” for purposes of redistribution. I am disabled, unemployed, and I make under $10K per year, and I oppose death taxes. Whether it benefits me or not, my sense of morality and fairness determines whether I’m in favor of it or not.
Here’s a thought. To replace $100 billion stolen from the estates of the wealthy deceased, why not cut government spending $100 billion dollars? Living within the nation’s means seems to be a concept now viewed as quaint as banks making mortgage loans and holding those loans to maturity (i.e. not passing risk on to the next guy).
You want average Americans to become people looking for a government tit to suck on. If the AIG bailout and bank bailouts are immoral, then government Robin Hood policies — taxing the rich because they are rich — are equally immoral.
Looter Nation
In morality and ethical terms I see no difference between confiscation of wealth in a dictatorship by, for and of the people and a dictatorship of a ruling elite. In both cases confiscation of private property is the end result. In practical terms, then, we own no assets, we only hold assets as nominees “for the People”. The property rights this Nations has grown strong and wealthy on are being torn asunder.
The acceptance of the confiscation of property as a principle of taxation is a slippery slope. In effect, the principle of the Looter Nation is to take as much wealth as possible but not so much that those with the ability and drive to create wealth will stop working as hard as possible to create more wealth, which can then also be taken. We have become, in my opinion, both a Looter Nation and an Immoral Nation.
I realize that, as someone who thinks that the government has zero moral authority to decide how someone directs their already-taxed money after their death (and that the truly wealthy will simply set up foundations and engage in nepotism anyway) I am not in the majority here. But let me plead two points:
* Index the tax to inflation
* Tax the children inheriting the money, rather than the person who died. Someone splitting an inheritance across five children is in a very different than a couple giving everything to their one child.
Cheers,
Carson
Well… Let me just say that arguments for (or against) any tax based on how easy it is to evade are not the most convincing. I guess I am just idealistic that way.
Make’s you wonder if we actually live in a a society founded on capitalist values with estate taxes like these:
http://iloveclosing.wordpress.com/wp-admin/index.php?page=stats&day=2009-04-12
Stay Minty
The Closer
AND WITH THE CORRECT LINK!!!
Makes you wonder if we actually live in a a society founded on capitalist values with estate taxes like these:
http://iloveclosing.com/2009/04/13/the-capitalist-versus-the-communist/
Stay Minty
The Closer
It is extremely unlikely that the estate tax has undermined the family farm. As someone who grew up on a family farms in the 1950s (chickens and eggs in upstate NY), majored in agricultural economics in college and has spent a 40+ year career as an economist, it seems clear that the decline of the family farm is due to technology, scale economies and the rising share f final price that goes to transportation, retailing, pre-prepared food, etc. Our farms, with 3,000 hens, could not compete today.
This entire debate is another example of argument without data, the triumph of political rhetoric over hard evidence. How many family farms, or family businesses, will be assessed at more than the exemption level of the estate tax?
You claim that the estate tax only affects the super-rich; however, the super-rich seem to do quite well at avoiding it. Let’s have a fair estate tax: Eliminate all of the loop-holes. Let’s tax the Kennedy estate and ensure that the Pelosis pay their fair share too. The problem with the estate tax is that it hits the intermediately wealthy. A reasonable exemption and a two-tier tax will put the focus on the stinking rich where it belongs while permitting the rest of the population to improve their lot over a few generations.
Behind every great fortune is a crime.
Balzac didn’t really write that, but everyone recognizes the truth of the quote. Taxes are one way of payment for the crime. And the inherited money does seriously screw up a lot of the heirs.
Another tax I would like to see would be a sales tax on equities and bonds. If it is bought and sold in the market, it should have a sales tax.
That would temper some of that irrational exuberance the next time around.
This is absurd – why is a “family farm” any more sacred than a “family company” or a “family investment portfolio”?
If the idea of taxing wealthy estates is appealing, it should be exactly as appealing to seize 40% of the acres of a $100mm farming business as to seize 40% of the interests of a $100mm of equity family company or 40% of $100mm of cash in a family bank account.
Somehow the farmers have convinced people that they have a more of a right to preserve wealth than others, as if their notion of “family” is more valuable than someone else’s.
I don’t think the estate tax is a good idea for anyone; there is a bit of a pitchforks and torches approach to a majority voting to tax a minority they will likely never join. But if the tax makes sense, it should be applied without exception.
The return on capital in farming is low because there are great non-monetary rewards from farming, which lead to overinvestment in farmland.
If you make your money in waste management, you look at garbage all day. If you make your money in the wine business, you look out over beautiful vineyards.
Same reason the return on capital is low in the movie business.
The argument that government subsidies contribute to a low ROIC doesn’t stand up – farm income INCLUDING government subsidies is factored into the cash flow a purchaser of farmland expects.
Regardless, there is no reason that someone who has chosen to build his wealth in farmland should be treated any differently than someone who has chosen to build his wealth in sanitation or Treasuries. If the rule is that you kick 40% of what you have to the government at death, it should be 40% of your farm or 40% of your sanitation company or 40% of your Treasuries.
Exempting farms will only encourage continued overinvestment in farmland.
Most people, myself included earn a lot less than $140K gross. I have a hard time feeling sorry for someone who’s inheritance “only” nets that amount.
Isn’t the Walton argument a reason not to have an estate tax?
If it really is a negligible percentage of the population that would be eligible for the tax – the handful of holders of huge estates – then it perverts the nature of democracy for the rest of us to try to vote them out of existence. For a tax policy to be meaningful it should be something that each of us could reasonably expect to have applied to us.
Balancing the budget on the backs of a few families hardly seems a good way to respect individual rights.
Setting up my family trust cost $2k – is that prohibitive?
All taxes subtract from aggregate demand. This is not a bad thing — it helps control inflation — but at a time like this it is the last think you need.
When the Government taxes the private sector, it removes money the private sector could have spent. This reduces aggregate demand.
Nope. The Government does not need to tax in order to spend. It is a currency issuer, remember?
We aren’t on a gold standard any more.
There is another another option. Have the government run a deficit. It can print money, you know.
“For a tax policy to be meaningful it should be something that each of us could reasonably expect to have applied to us.”
Absolutely!
3 of the 3 countries you reference Germany, China, and S. Korea as “Labs” for the failure of socialism…..also happen to have very good economies at the moment. Is it BAD to provide a few social services for your citizens? If kids get their teeth fixed, no matter how rich they are, is that such a world-ending issue? Give it a rest….
Maybe if all of your elected officials over there in the US actually paid their own taxes, you wouldn’t have to tax the wealthy. After all, the politicians should be careful not to bite the hand that bribes them. If the US Politicians raise the taxes on the wealthy citizens, those citizens may stop funneling cash bribes to the Pols via the Lobbyists. I don’t know though, we don’t have the massive corruption here where I live, like you have in what seems like every corner of american society, so it’s hard for me to get my arms around this problem.
AA
Purple,
Actually it wouldn’t be that hard. Most rich people could afford private armies to defend themselves at far less cost than what they pay in income tax. Seriously, how many guards do you think George Soros could afford with the $1B he paid to the us last year. If he really wanted to, he could probably take over all of NY state.
States run by the wealthy, ex Luxemborg, Monaco, Andorra, etc. actually provide legal systems and security at minimal cost to the wealthy & marginal tax rates of less than 10%. We are very lucky that the wealthy are subsidizing the rest of us (they pay most of the taxes)
I think I am rather consistent. I am against government handouts period. I realize this fails to fall in the conventional two party paradigm that currently exists. We Americans need to end the current cartel that is the Dems & Repubs.
I am for a constitutional limited government with very limited taxation.
So the vilification seems to be present among our elected leaders and those supporting them. When the feds can also assign a 90% tax against all executives at a particular company – I am sure they are not all evil people. What was that with Obama’s pitchfork comments that he was protecting these executives from public outrage?
I would relate tax rates with who is vilified by our society. Tax rates already, for successful entrepreneurs, aside from estate taxes, are at all time highs for recent times in this country. Ask a small restaurant owner or other small business that doesn’t raise capital thru a VC.
Yes, of course you are right. But as in our current system, the systems that have advocated Marxism, allowed for a small oligarchy of power at the top while destroying all else – all the while promoting class warfare.
The Marxist system survives by pitting everyone against eachother – to confuse everyone from focusing on the real oligarchs in charge. It is highly effective but deceptive.
The tax system does not discriminate against many children. Quite the contrary, it massively subsidizes birth rates.
Begin with deductions and exemptions – these come off the top (meaning, the highest marginal rate). Then consider the tax system which encourages provision of health benefits (due to partial exemption of medical expenses as a business cost rather than earned income); in spite of recent reductions, most employees still have workplace subsidized insurance. Then consider schools. Local property taxes provide an essentially free public education.
Beyond this, we have SCHIP, earned income tax credit, and then more traditional welfare system programs.
I am not against this, but there is a noted social impact:
The system creates an incentive to have many children and have society pay the costs of raising them, rather than to have fewer children (1 or 2) and truly invest a lot in their education and upbringing. It is designed to encourage population growth.
If one believes in a Darwinist/Becker theory of social propagation, then this shifts the optimal gene-propagation strategy toward having more kids (rather than investing more in fewer children). This has long term impacts on sustainable development.
OTOH, maybe it just serves to compensate for our social birth control methods – cable TV and videogames.
“If one believes in a Darwinist/Becker theory of social propagation, then this shifts the optimal gene-propagation strategy toward having more kids (rather than investing more in fewer children). This has long term impacts on sustainable development.”
My comment was related to the estate tax, but am I now to believe some are considering the Chinese model of allowing only one child so as to be able to invest a whole lot of love in it?
The comments on this website are generally very good, so it is with great disappointment that I have read through the large majority of these.
The one thing that hasn’t been mentioned once (based on an admittedly less than thorough read through) is unrealized capital gain at death. Opponents of the estate tax love to talk about wealth that has already been taxed. Is there a consensus then that it is appropriate to fully tax unrealized capital gain at death?
Take the Walton/Walmart example, when the Waltons start the business and own all, or nearly all, of the stock, it has a low tax basis and value. 50-60 years later, it is worth billions. That growth is not taxed. Dividends are taxed, sales of stock are taxed, but not unrealized accretions of wealth through asset appreciation.
Under current law, at times when there is a federal estate tax (i.e., every year except for 2010), there is a so-called “stepped up basis at death”. After paying any estate tax owed (which is none for most everyone), the tax basis of capital assets is increased to the fair market value at the time of death. This means that if an heir turns around and immediately sells the asset, there is no capital gains tax for the heir – even if there would have been for the decedent immediately before death.
For 2010, when there is no estate tax, I am nearly certain that this stepped up basis at death goes away. The result is that many estates with lower aggregate value will face greater capital gains taxes. (For example, the heirs of a decedent whose only asset is $1 million of stock with $0 tax basis would face 15% (or 20% if the rates go up as scheduled) tax, whereas with the estate tax/stepped up basis combo there would 0% tax on the estate or on the heirs, assuming an immediate sale.)
Logically, you really can’t have both things (unless you eliminate the capital gains tax). So which one do the opponents of the estate tax prefer? (1) An estate tax or (2) no stepped up basis at death on capital assets.
Wow, I had to read half way through the comments to finally find someone with the rational response to this issue: cut spending.
How sad everyone is quibbling about the wrong side of the argument.
Here here!
Re poor people who think they will get rich: think of all the young shop assistants or clerks at WalMart who think they will be models or movie stars before long. Good sense would be the death of the American Dream.
Actually, it is capitalism which both in theory and in practice pits everyone against each other.
(For example, just a moment ago I again had the displeasure of being subjected to one of those fascistic Microsoft commercials with some guy blathering about a “wolfpack” ripping each other to shreds.)
Socialism at least in theory tries to get people to work together as a team, even if the real life results have not always lived up to that ideal.
And of course Marx personally should not be blamed for abuses by his descendants any more than Locke or Smith.
Judge wrote, “Why SHOULDN’T someone be able to enjoy the fruits of their labors?? Who are you to steal it from them, to loot their possessions for your selfish and lazy interests?”
A huge fraction of inherited wealth is either land, or stuff bought up with income earned from owning land.
As such, all that wealth is stolen from the fruit of someone’s labor, and it’s eminently just that the government tax it away.
Of course, a better way to do that would be to tax land value heavily.
“In effect, the principle of the Looter Nation is to take as much wealth as possible but not so much that those with the ability and drive to create wealth will stop working as hard as possible to create more wealth, which can then also be taken.”
Garbage. A large fraction, probably most, of huge sums of wealth are just economic rents sucked out of those who actually make productive contributions to society.
You have areas of California where land is selling for $100,000 an acre. So a 40-acre California ranchette would come under this definition. The average farm in the United States is now 400 acres. So you can see that even average farms in areas where land is selling for $20,000 an acre would be affected by this tax. Of course, the way out for farmers is to sell their property to Archer Daniels Midland, ConAgra, or some other conglomerate which holds the medieval equivalent of mortmain over property.
Actually I’ve always thought that the estate tax was a pretty good deal for the Rich. Think about it–you get to push off a very large part of your tax burden into the far future, leaving you more money to invest in the present, which (thanks to compound interest) ought to make you better off overall. You either 1) get to build up a massive fortune, or 2) don’t get taxed as much.
And as far as reducing the incentive to work–well lets face it being able to inherit a massive fortune tax free would be a pretty solid incentive against ever working at all, wouldn’t it? If Republicans want to decrease someone’s tax burden Paris Hilton should not be at the top of the list…
Basically everyone should remember that the alternative to taxing the dead is taxing living people who actually do work…
I wholeheartedly agree, but gift horse and mouths etc. However, the small family farm argument at these estate tax levels is a non-argument as I mention above. When the tax was on $650K of assets that’s a completely different anaylsis. As I mention above, farms don’t have to value their estates at the value of the land and equipment, they can value it based on current use, so at $3.5M using an 8% discount value the farmer, assuming he owns the farm completely by himself not joint with a spouse or a child, would have to clear $280,000 of income for the farm to be valued at $3.5M under that analysis. At that level he could afford to hire me.
I’m not saying it’s fair that I get thousands of dollars in fees so the government collcts no revenue, when we could have no Estate Tax and have the same net effect – but my family has to eat too.
An alternative is LESS taxation period. Applying taxes arbitrarily to a minority population is in my opinion immoral.
It is simply outstanding that the majority of the posts in favor of the estate tax basically rest on the principle that: “well they are rich anyway so it doesn’t matter” … or … “they don’t deserve that money!” … “Simply spoiled heirs!” … and countless other completely arbitrary and subjective statements.
If we are to be a nation of formal laws we should apply them equally across the board to every citizen. If you are in favor of the “estate” tax then it is only logical that you agree that it should be applied across the board to all.
just want to touch on these tea parties. what do you want america to be akin to somalia? just rediculous and clueless. they’ll be packing so sure to get the pig!
Buy an asset, sell an asset.
You pay taxes on the appreciation.
Buy an asset, die.
Your estate pays taxes on the appreciation.
Why should beneficiaries get a free ride on the appreciation?
try generation skipping trust fund. all priciple is tax free. AND i believe this administration is ok with that. BUT i might add that when that money is spent is taxed and interest is taxed. you know i live in florida and the tobacco tax increase just kicked in and next is alcohol. i have no problem with it as i imbibe in both.
I never said competition was bad. Competition is good. Concentrated power by government decree is bad. Obviously you and I fundamentally disagree.
At the current rate, in a few years a few million dollars will probably not buy a college education or home. I am glad the state of the economy and the estate tax will force ALL of our children will learn the rugged individualism you people claim to support. I’ll continue to seek my liberty to give my children as much money as I want without it being taken from my family.