Excellent comment over at Obsidian Wings:
I'm struck that so many commenters seem to assume that if only Americans could be made aware of the real facts, they'd all vote for Democrats. I'm not sure that's so. For one thing, it assumes that everyone will freight a given piece of data with equal significance. In my experience, however, we typically invest those facts which accord with our presuppositions with the greatest weight. So if you present a smorgasbord of facts to your average voter, they'll tend to seize upon those which support their point of view, and discount those which do not.So it's not just a matter of telling voters that only a tiny fraction of the most affluent taxpayers end up shouldering the estate tax - it's about convincing them that that fact is significant, even controlling. We tend to assume that others will interpret factual data the same way that we ourselves do. We think of ourselves, after all, as perfectly logical, and have difficulty perceiving that we filter our perceptions of the world through a whole array of beliefs and values.
Recognizing that people aren't paying attention to the facts that we ourselves find most important not simply because they've been bamboozled is the first step to persuading them of our point of view. That acknowledgement suggests that we need to give them not just a new set of facts, but a new frame of reference with which to interpret those facts. And that gets back to Appiah's point. People didn't like the estate tax because it seemed unfair - why should you have to pay a second round of taxes on earnings just because someone dies? That sense of unfairness left them predisposed to certain arguments - that the tax hurt small-businesses and family farms, for example. You can't counter that by pointing to the small number actually affected by the tax - that's mistaking the symptom for the cause. The way to counter the argument is to make the case for its fairness: by pointing out that the rich got that way because America endowed them with opportunity, and that the tax preserves the chance for others to have similar opportunities.
And that's broadly true of voters who cast ballots "against their economic interests." They do so not because they're stupid, and not because - as Drum would have it - social values are somehow more important in their lives than in the lives of Democratic voters. We're not going to win them back by telling them they're stupid, that they've been fooled, or that the facts contradict their beliefs. We'll win them over by showing how our policies actually accord with their beliefs. That if they care about preserving family, gay marriage is a boon and not a curse. That progressive taxation is about ensuring a fair playing field, and not about penalizing the succesful. That not waging ill-advised wars overseas will actually strengthen our national security. In other words, by abandoning the futile quest to provide them with 'facts' that will change their beliefs to match our policies, and demonstrating that our policies actually accord with those beliefs.
The same holds true, of course, in reverse, for those who wish to press the opposing sides of those issues.
The basic problem is one of linguists thinking they have a deeper understanding of the world because they've figured out language. And this argument seems to follow George Lakoff's theory that framing will turn everyone in America into bobble-headed liberal and progressive Democratic voters for all eternity.
How on earth does a tax on years' worth of a person's savings represent a "chance for others to have similar opportunities"? That isn't a statement of fact, it's an interpretation that would instantly escape most people with some residual common sense.
Confiscation of earnings, savings, and property can only be interpreted as giving someone a "chance" if that chance involves bribing voters to get elected. It most reminds me of the "chance" offered to me from time to time to join various class action lawsuits, so that I may "take" $25 for some company driven into bankruptcy, costing oodles of jobs, for the enrichment of trial lawyers. Little wonder that the trial lawyers' association is Democratic party's most influential, richest supporters.
The estate tax is a joke really. Its so easy to avoid with any decent estate planner its not even funny.
And actually tax regime that would replace the estate tax is revenue neutral; the tax will end up being paid on assets subject to the estate tax, but it will be at the time they are sold or liquidated instead prior to distribution. It makes the transition smoother and reduces the possibility of mildly wealthy chaps with one or two big assets getting slapped with a gigantic bill that can only be paid by selling the family farm or business.
So basically the whole argument is in fact about cultural values or something besides generating revenue, because the new regime would be revenue neutral, and frankly the estate tax as a field leveler is a joke. The only thing I can think of is that democrats like the symbolism of a tax that on the surface looks like it knicks 55% of rich peoples estates, when it really does no such thing unless said rich guy is too stupid to hire good legal help.
"We're not going to win them back by telling them they're stupid, that they've been fooled, or that the facts contradict their beliefs"
Hopefully his audience won't listen. The single greatest advantage the right has over the left is the left's assumption that people who disagree with them are stupid.
Megan,
Please fix the link; it goes to TPM Cafe, not to Obsidian Wings.
Can't we at least give the voters the option of hearing information relevant to them and their situations?
96 percent of the population makes under $200,000 annually, yet they decided that 200,000 is the important threshold for the "middle class"? If the US was reduced to 100 people, by their measure, three and a half people would be in the middle and upper class.
100 million have stocks? Ok, but how many of those people are day traders who are seriously impacted by capital gains? But capital gains taxes are clearly a big issue. The census bureau puts the median US household income at 48k. Clearly, the average American needs to hear debates about rates on capital gains over 90k when they are making half that as wages (which are getting taxed at a higher rate).
if only Americans could be made aware of the real facts, they'd all vote for George III.
Ming,
You missing an obvious problem, you are correct that all those individuals won't be directly affected by capital gains tax rates. However, big individual investors who own the same stocks as the other folks will be affected. How those big investors handle the capital gains taxes affects the price of the investments which affects the small investors.
The commenter writes much wisdom but still seems to end up saying "everybody would agree with me if only . . ." For example, I happen to agree in principle that it would be fair to use an estate tax (or a tax on inheritances) as a way of promoting equal opportunity by helping everyone get to the starting gate. But to turn that agreement in principle into my support for an actual legislative proposal, the proponent of the estate tax would have to show me that the tax would fall fairly on the intended target group and that the funds would in fact be used to effectively equalize opportunity (rather than just being dumped into general revenue to be spent, regardless of party in power, on geezers, guns, and re-election of incumbents). That's where my earnest interlocutor would likely come up short. Appealing to my values is certainly a better start than insulting my intelligence, but it still only gets your foot in the door
Recognizing that people aren't paying attention to the facts that we ourselves find most important not simply because they've been bamboozled is the first step to persuading them of our point of view.
Fine, I guess, if that's your goal, but it's no help to the 99% of us whose effort in the national political debate is devoted to the very serious practical matter of how most efficiently to keep ourselves convinced that the other guy's both dumber and more evil than we are. Which, let's face it, in most cases that ain't easy.
As with MarkG, I'm perplexed by this statement:
Does the author really think that if the heirs of Warren Buffet or Bill Gates pay no estate tax that my family can't get ahead? My wife has a top 1% income and came from a family that was on food stamps for a good part of her life. Her father never made above $40k/yr in current dollars (and had 11 kids). She did it the hard way - worked her way through college and medical school.
It has nothing to do with fairness. If it was about fairness, there wouldn't be ways for the Kennedy, Heinz, Ford, Rockefeller, etc. families to hold on to their money. It's about keeping the rich donors rich and the accountants and lawyers paid.
You have two people - person "A" 28 yo high school graduate with 3 kids making 32k with a wife making 20k - and person "B" 28yo with a masters in finance with 1 kid making 350k with an attorney wife making 180k.
I always get the feeling that liberals think guy "B" has done something wrong or must be guilty of something. While guy "A" is somehow more virtuious....
It's not so much the idea that the smart and hardworking need to support that lazy and stupid, it's that the stupid and lazy are somehow more worthy people - salt of the earth and all that...
I guess when you get right down to it - liberals think "the rich" have done something wrong, while conservatives think "the poor" have done something bad.
Xmas,
Are the people in the banking services sector suddenly going to be rendered importent because the capital gains tax rates go back to the rates we had in the 90s? Are they suddenly going to stop investing?
How an investor handles his share of the stock, which in turn earns him millions of dollars, should scare an average person who will not even make that much in his or her lifetime?
I find it dubious that these investor butterfly wing flaps will create tornadolike problems for people who can barely afford to pay their bills, or are worried about losing their house, or paying for health insurance, or sending their kids to college, or earning any money at all because they are losing their jobs or can't find jobs that pay enough to make ends meet, or losing family members in Iraq, or educating their kids, or stopping global warming.
A truism I learned in sales training:
"A person will defend his bad decision to the death if you're the one who points it out to him."
Persuasion is best achieved by starting with the perspective of the person you're trying to persuade, then asking questions that lead to the "correct" (however defined) conclusion. Assuming stupidity on the part of your prospect makes for a short trip to failure.
And BTW even top salespeople fail often, so there's only so much you can do.
To have earned those millions and a great and wonderful thing. To be someone who "can barely afford to pay their bills, or are worried about losing their house, or paying for health insurance, or sending their kids to college, or earning any money at all because they are losing their jobs..." is a tregedy. The degree that being in a distresed financial situation is a result of bad choices is even more tragic.
When people are successful they need to be praised and rewarded and when people fail then need to learn from their mistakes.
"The way to counter the argument is to make the case for its fairness: by pointing out that the rich got that way because America endowed them with opportunity, and that the tax preserves the chance for others to have similar opportunities."
America "endows" us all with opportunity. Not all of us take the opportunity and run with it. Not all of those do succeed.
Specifically, the black children referred to by Bill Cosby, who don't try to do well in school because they view that as being "too white" are offered an opportunity they choose not to take. The revenue collected by the estate tax will not change that decision.
Arguably, those most willing to grasp opportunity and run with it are immigrants, because they see more clearly the extent of the opportunities available to them. Whether it is Joe Biden's "Indians in the 7/11s", or the Koreans in the dry cleaners, or the Vietnamese in the nail salons, or spanish speaking illegals in construction and landscaping, immigrants see and sieze the opportunities America offers.
The US has no shortage of opportunity; it has a shortage of committment to excellence on the part of portions of its population. The rest of us can not force them to take advantage of the opportunities available to them; only they can do so.
Even this is too presumptuous. I know perfectly well that the estate tax only hits a tiny percentage of families, but I oppose it because I think that the integenerational accumulation of capital is a good for society, and high government spending is bad. I oppose higher tax rates on people making more money than I'm ever likely to, largely for similar reasons, and also because it's dangerous to have a situation in which a large percentage of the voters don't feel the sting of the tax bite.
It's not that I'm not paying attention--it's that I am paying attention, and looking beyond the first-order effects of policy.
jmo,
So every poor person in this country, every person who makes under 48k a year, made mistakes, whereas those people making millions made none?
Economic success and moral worth are not the same thing. Some people are in bad economic situations because of bad choices, yes. But there are plenty of people in bad economic situations who worked hard and played by the rules and did everything they were told they were supposed to do, and are still getting fucked over by a system that has become increasingly more favorable to those who are already haves, as well as their progeny.
Those making millions have benefitted from living in the US: From an education system that didn't neglect them and leave them stranded. From an infrastructure system that met the demands of the day. Often times they were born into good economic situations that gave them the boost they needed to be economically successful themselves.
This idea that they got there all on their own merits without any kind of help at any point along the way is laughable.
And the way of course to counteract that argument is point out that America doesn’t “endow” people with opportunities but rather most people make their own through exercising values like hard work, entrepreneurship, and thrift whereas people who tend to be the poorest tend to be those who dropped out of high school, had a child out-of-wedlock, or engaged in substance abuse.
Moreover the people who become successful tend to be people who have already “given back” by the mere fact that they became wealthy by starting business, providing useful goods and services, and in the process of trying to make their own lives and the lives of their families better, made things better for other people in the process.
"Those making millions have benefitted from living in the US: From an education system that didn't neglect them and leave them stranded. From an infrastructure system that met the demands of the day. Often times they were born into good economic situations that gave them the boost they needed to be economically successful themselves."
Those not making millions have also befitted. Don't forget who runs our educational system. The infrastructure is there for all. Yes, some started out in better economic situations, but certainly not all. Many immigrants, now and previously, arrived here with nothing but the clothes on their backs.
So, laugh if you will. That will improve nothing and solve less!
But it's not the amount of monetary capital that is causing this as much as it is a lack of social capital. In 1950 if you had parents who told you college was a waste of time, and you should get a job at the plant like your dad - you would make X. If you had parents who told you to get an education and get a professional job you would make 2X. Today, it's 4X.
I don't understand what using taxes to artificially reduce the income gap is going to do to remidy the underlying lack of social capital.
The fact that many voters are ignorant as a post does seem like a serious underlying problem, though. In 2004 70+ percent of Bush voters thought WMD had been found in Iraq and Saddam was directly linked with 9/11. I don't have comparable figures for Kerry voters, but I'm willing to assume that if they didn't think that, at least a comparable percentage thought something else equally stupid.
I don't know that it would tilt one way or the other, but a better informed electorate might result in more competent and less embarrassing politicians.
This is classic Leftist thought; they tend to think of opportunity and wealth as something that's distributed by authorities (and so should be distributed equally), rather than something that has to be created (and might be created unequally).
One of my grandfathers was a financially succesful phsysician. His given names, Ferdinand Francis, reflected the German Austrian ideals of his family which included that security and wealth were found in owning good farm land. You think he was going to go to a lawyer to do estate planing to avoid tax? Sometimes a persons ideals are not subject to tax policy. It is its own unfairness to assert otherwise, and it is potentially destructive to force people into that mode.
I am "struck" by the arrogance of the author.
He starts out by stating that "so many commenters seem to assume that if only Americans could be made aware of the real facts, they'd all vote for Democrats. I'm not sure that's so". Ok so far.
And then, he proceeds to do just that! It's not that one side is too obtuse to understand the issues, it's that the rubes need to have the issues framed in such a way that their feeble minds can grasp it.
Sheesh, what arrogance.
"a system that has become increasingly more favorable to those who are already haves"
In what way?
As Thorley Winston pointed out, those who have created wealth have already, as a group, made large contributions to society in the process of building their wealth, and then in addition they pay a large share of all taxes. Society gets very large benefits from those that do an especially good job of taking advantges of the opportunities offered to us all.
No one is saying that all rich people are extraordinarily virtuous and that all poor are that way entirely due to their own bad choices. But jmo is right that, as a group, the rich have generally taken actions that have benefited everyone and should be encouraged.
Wow... what an amazing piece of twisted logic. Aside from that fact that the author is STILL convinced that everyone would be a Democrat if they just understood the facts in the proper frame of reference, the Liberal attitude towards taxing the rich reminds of the Ten Years After song "I'd Love to Change the World"
That's one way to ensure equality.
Not the kind of world I want to live in, though.
We used to have this psych test we'd give to friends and coworkers to classify their basis for forming rapport (trust) with people/issues.
When the results were made public, it was inevitable that people would start deriding the classifications of others as if those people had hit a run of bad luck, and those others would, of course, defend their classifications as favorable.
The exception was the Results (manager) types who tended to see Process types (programmers, auditors, etc.) as useful resources.
Many people really do believe that other people's differences are the results of failures rather than deliberate choices.
You find it "amazingly twisted" that a Democrat would stand up for Democratic principles, and believe them correct?
Wow, indeed.
I'm not going to bother arguing against the mountainous pile of straw represented by the various "liberals want to outlaw rich people! leftists=communists! Harrison Bergeron!" ridiculousness. There's no point. I leave it at "that's ridiculous."
Since this has turned into a referendum on the estate tax, let's just look at it a bit:
Who is it that pays this tax? No one.
And what hard work has been done by trust fund babies to "earn" their income?
The straw man in the room is that taxes in themselves are seen as a punishment instead of an investment in the common good.
The moral argument should be: If you have been able to amass such wealth because of the freedoms available in this country, does it not make sense that you should provide a proportionate investment in that country?
But most conservative libertarians want to have their cake and eat it to--taxes and government are evil abrogations of my liberty; there is no reason to tax because we can get rid of all government except for the army, which is necessary to protect my fortune. And yes it's only losers that should pay the price for being to stupid not to be rich or simply print some money and let the future losers pay for my prosperity today.
And if I don't agree with this I am stupid?
What I find amazing is the presumption that Democrats are right and there is no chance that they are wrong, so the only possible reason someone might disagree is that they don't understand something.
Offhand, I can think of two reasons someone might disagree with Democrats without being wrong or stupid or confused.
1. They have different values.
2. Democrats are wrong.
While I am all for people espousing their values and ideals and for people who believe something to believe that they are right. I am against people refusing to acknowledge the possibility that they are wrong and that others are, in fact, right.
Many Conservatives shake their head because they disagree with Liberal values. Many Liberals shake their head because they think Conservatives are dumb (ignorant/confused/etc...).
Everyone pays taxes to pay for the activities of the Federal (and state and local) governments. I'm not sure why a given Estate Tax is morally just... why not a little lower or a little higher? How does one determine the morally just level of Estate Tax? What is the purpose of Estate Taxes? To prevent people from passing on their accumulated wealth to their heirs? Why is this an important thing to do? Why not just have income tax and tax inheritance as income? Why is that morally unjust?
Here is an example of different values. I see taxes as a way to fund the Federal government. I do not particularly like them being used to alter behavior. I especially do not like them being used as a way to take money from people who are "too rich". I have observed that there are Liberals who do see taxes as a way to take money away from people who have too much, hence my Harrison Bergeron allusion. Those same people want to use reverse discrimination to "fix" racism/sexism/etc...ism. I think Harrison Bergeron very nicely sums up the end result of that sort of thinking.
But I realize that people can disagree with me without being stupid, ignorant, or confused.
The appeal to fairness also appears to assume that the estate taxes are earmarked to be redistributed to 'the poor' (possibly those whose parents just died without bequeathing much?). But ... that's not what actually happens.
What is the purpose of Estate Taxes? To prevent people from passing on their accumulated wealth to their heirs? Why is this an important thing to do? Why not just have income tax and tax inheritance as income?
My understanding is that some people believe that the passing of wealth down family lines undercuts the moral justification for having government-protected rights in private property in the first place. The theory is that the right to private property is rooted in the individual's entitlement to enjoy the fruits of his/her labor. Permitting a person to control vast unearned wealth is thus not morally required, and in fact it undermines public respect for property rights in general. (Compare public attitudes toward earners like Michael Jordan or Steve Jobs with those toward non-earners like, say, Paris Hilton.) In order for it to be true, and perceived to be true, that wealth is by and large deserved, it is appropriate to curtail the right to dispose of one's wealth by bestowing upon the natural objects of one's affection large unearned fortunes in the form of gifts and inheritances.
To the extent that argument has merit (and I would at least agree that taxing such unearned wealth is easier to justify than taxing earned income), I think it could be better addressed, as you suggest, by taxing inheritances as income (not necessarily at the same rate as ordinary income) rather than by taxing the whole estate before distribution.
I perceive a difference between the "vast unearned wealth" held by Teddy Kennedy and Jay Rockefeller, for example, and my ability to pass that portion of my IRAs and 401ks I don't use to live on over the next several years to my sons and their families when I die. By my definitions, my "wealth" is "earned" and hardly "vast", though it would be taxable if the Bush estate tax exclusion limits are allowed to expire. I would think that the two orders of magnitude difference between my likely estate and either the Kennedy or Rockefeller estates is significant. Mine just ends up being big enough to tax and too small to afford to hide.
I perceive a difference between the "vast unearned wealth" held by Teddy Kennedy and Jay Rockefeller, for example, and my ability to pass that portion of my IRAs and 401ks I don't use to live on over the next several years to my sons and their families when I die. By my definitions, my "wealth" is "earned" and hardly "vast", though it would be taxable if the Bush estate tax exclusion limits are allowed to expire. I would think that the two orders of magnitude difference between my likely estate and either the Kennedy or Rockefeller estates is significant. Mine just ends up being big enough to tax and too small to afford to hide.
Ed --
I think even the proponents of the views I described recognize the legitimacy of the desire to leave something worth having to one's children, and would allow for a generous zero bracket. The general idea is that nobody should be exempt from earning his/her own material standard of living just because there's family money. That said, nobody on the high side of the zero line will think the line is in the right place, and the question isn't whether the money was earned by the grantor but whether it was earned by the inheritor.
if only Americans could be made aware of the real facts, they'd all vote for George III.
Hillary ain't out of the race unless she crashes and burns in August.
again with the RSS quote problems...
I believe that the proper description for the author is "elitist". :-)
I do agree with the main point of the article, and it is something that both sides would do well to learn. Stop being rude and questioning the intelligence of the other side; do a better job of explaining your reasons for believing what you believe. I find it ironically comical that the author comes across so elitist in his diatribe to stop being rude.
I do disagree on the author's view of the estate tax. My own inheritance (hopefully many years away) certainly won't amount to much. My kid's inheritance won't either; probably. But the estate tax offends my sense of fairness: it is double taxation. My kids are mine. My money is mine. I should be able to give my money to my kids without you stealing any of it.
The author lays out a fairness doctrine that is too socialist for my blood, in his description of the good of the estate tax. Follow his logic here:
1 You had opportunities that were provided by America.
2 You profited from those opportunities.
3 America did not profit from whatever you did that enabled you to profit.
4 The estate tax offers America a way to finally profit from the opportunity it gave you.
5 The outcome of America's profit from taxing your estate is that other Americans will gain additional opportunities.
6 That outcome is more "fair" than your family getting to enjoy the fruits of your labor.
I patently disagree with his assumption #3. Every penny that you earn comes in through an exchange of like values. You provided somebody with something that they wanted--or lots of somebodies, probably. They gave you cash in return. Maybe there was some asymmetrical information involved. Maybe you cheated some. But by-and-large you had to trade some value away in order to make your money. And everyone else did profit from the value that they got from you; or at least they thought at the time that they were profiting from the trade. That is capitalism.
But I more passionately disagree with the author's use of the word "fairness". He is talking about taking from you (an injustice) and giving to others. Those others were not your victims, being compensated for their suffering at your hands. Those others are merely benefiting from the largess of the government. They are not getting justice, they are getting lucky. That trade--injustice to you and good luck to them--cannot be called "fairness". That is socialism.
I'm not sure I understand what you are saying... are you saying that no one should be allowed to inherit significant amounts of money from their parents? (Or, conversely, that no one should be able to give a bunch of money to their children as an inheritance?) That everyone should have to earn their own money?
What about parents who support their adult children while they are alive? Is that okay? What about parents who give their kids lots of money before they die? Is that okay? Is only the transfer of wealth from dead parents to living children that is unacceptable?
Given today's longer lifespans, most inheritance occurs after the children are full grown, often with children of their own. Any head start that they received from family money has already long happened. Should we prevent this, too?
PJ-
(Compare public attitudes toward earners like Michael Jordan or Steve Jobs with those toward non-earners like, say, Paris Hilton.)
Shouldn't that be attitudes towards earners like Paris Hilton- as compared to say 'non-earners' like Ted Kennedy, John and Teresa Heinz Kerry, and/or Nancy Pelosi?
Eddie said,
What these entrepreneurs and oftentimes their children who worked along side them in the family business have produced in their lifetime far exceeds what the grave robbers are trying to get through the death tax. In other words they have already made a proportionate investment in that society.Eddie did not say what I attributed to him in the post above.
Sorry about the mis-attribution.
EI, It's not my theory, and I don't know the thinking in that much detail. I just thought it was responsive to your questions above. I would assume that any estate-type tax has to be backed by a gift tax. And I don't think the idea was to prevent all forms of support (like expensive schools or a spot in the family business or living in the old man's mansion to age 50), just large intergenerational asset transfers. But the basic plan, IIRC, is that a high tax rate would apply on one end or the other to intergenerational transfers over a certain fairly substantial amount, and the justification was along the lines I mentioned above (not what you just quoted, before that).
OOPS,
Eddie did say what I said he said in the first post.
I need either more caffeine of less, I'm not sure which at this point.
Conservative commentors:
You can work hard, make all the right decisions, and still end up economically wrecked. There are many proverbial buses waiting to hit a person and drop them right into destitution.
Bad decision making increases the number of buses but good decision making does not eliminate all of them.
Liberal commentors:
Luck does not decide at random to make certain people wealthy. It may contribute but most of the time there is a little bit of luck and a lot of hard work and smart thinking.
A problem I see is that taxes (presumably) have already been paid on what's being inherited. In our family's case, should something bad happen to myself and my husband, our kids would be inheriting stuff that we paid taxes on in two states. We pay both sales tax in the state we live in and income tax in the other state where my husband works. Sometimes I grumble about this but that was our choice. So now our kids have to pay a third tax, a federal tax, before they can claim whatever we bequeath them?
I'm sorry, but this is a very hard sell.
I should have said another federal tax, because we paid those too. And property tax, and ... A single dollar gets a lot of tax taken out of it anyway. Layering the taxes on gets crazy.
TidJIT
You can work hard, make all the right decisions, and still end up economically wrecked. There are many proverbial buses waiting to hit a person and drop them right into destitution.
Undoubtedly.
Thus, I will propose the "TidJIT Fund" for any individual that has ever been struck by a bus.
TidJIT loves you!
TidJIT wants to give you money!
Oops! TidJIT merely wants to spend somebody else's money to help you...
Earnest Iconoclast: What is the purpose of Estate Taxes?
The purpose of the estate tax is to pay for World War I. Personally, I'm prepared to declare victory and move on.
"seems"?
"the left"?
I think I remember reading that she's not gonna inherit much, either (at least in relative terms). Not that it will matter. She's famous for being famous, is young, pretty, and blonde. She'll be fine.
You need to be careful there. Jordan is popular not because he made a lot of money but because he was talented, had a compelling story, and didn't act like a complete idiot once he got money.
Contrast with Michael Vick and Pacman Jones. They also were "earners" and are pretty much reviled now. Just making money yourself does not confer popularity. Donald Trump for a while there wasn't the most popular guy in the world. John D. Rockefeller was one of the poster boys for the estate tax, at least in part because he was so hated; and you have to admit the same can be said about Sam Walton, at least with regards to the company he founded and his heirs.
Also with regards to the estate tax, my understanding is that it doesn't touch estates under $3 or $4 million. That leaves out an awful lot of people's estates.
I have no objection to getting rich from hard work and smart thinking. It's when that hard work and smart thinking starts getting applied to the question of how to screw everyone else out an opportunity to put in their hard work and smart thinking and get rich that I get an itchy regulatory finger.
I agree with you 100%. But what things are being done by the wealthy to "screw everyone else out an opportunity"?
All the things I can think of aren't really a matter of money but more a matter of priorities. I know parents who will drive their kids all over the state for travel soccer - but couldn't be bothered to sit down and make sure the child finishes his homework.
How do you craft a law that differentiates between hard work and luck vs. devious and tricky behavior (that's not otherwise a crime, like fraud or theft)?
And why would you "regulate" that rather than just make the fraud or theft a crime?
I don't know if anyone has made this point yet, but around 2/3 of people who are actually likely to pay the estate tax favor keeping the estate tax in place (I'm one of them). It's people who are told that their family farm will be taken away after their death and such that support repealing the estate tax.
Mingpicket - Of course the rich won't simply stop investing if the capital gains tax goes up. But they will invest less, and the investment will be driven to a greater degree, by attempts to find loopholes, or otherwise avoid the tax. Most economic effects happen at the margin. You don't get maximum investment at x% tax rate and then 0% at x+1%. You get a gradual decrease as the tax rates go up.
eddie - re "Who is it that pays this tax? No one."
They can reasonably be considered to be a tax on the recently deceased, or a tax on the heir. In effect they are both. Either way it isn't a tax on no one.
"And what hard work has been done by trust fund babies to "earn" their income?"
What has the government done to earn it? Nothing.
The people the "trust fund babies" inherited it from may indeed have done hard work and should be able to dispose of their wealth as they see fit.
In any case even if it was just and good to take away this wealth, the estate/inheritance tax is foolish and inefficient. Rich people get around it, and it doesn't produce any great amount of revenue for the government. But the attempts to get around it distort investment and other activity, and this distortion causes more harm than the gain of the inheritance tax revenue. Even strictly from the government revenue perspective, the indirect effects of the tax may mean that it is a net negative, producing less revenue than the government would get had it never existed.
But if you assume it really does generate positive revenue, this revenue does little or nothing to increase opportunity for the poor. Again when you consider the reduced incentive to save and invest, and the distortion of that saving and investing you probably reduce opportunity for the poor by having an estate tax, at least by having one structured anything like the one we have today.
The main benefit of the tax is for tax lawyers, accountants, and estate planners, who gain from all the efforts of the wealthy to avoid the tax. I don't see a reason to drain investment and distort the economy for the benefit of these groups.
RE: "The straw man in the room is that taxes in themselves are seen as a punishment instead of an investment in the common good."
Apparently you don't understand the meaning of the term straw man. A straw man is when you set up a weak argument, that your opponent is not actually making, so that you can demolish it and make your side seem stronger. The term your probably looking for is "the faulty argument", or "the incorrect idea". Its neither of those things, but those terms would at least fit with what you are apparently trying to say.
Taxes can produce revenue for the common good, but taxes themselves have a direct effect of harming the common good, and are a disincentive, or even a punishment. Also this particular tax almost certainly does more harm to the common good than any help that can be done with its revenue.
RE: "If you have been able to amass such wealth because of the freedoms available in this country, does it not make sense that you should provide a proportionate investment in that country?"
The people who create the wealth frequently do so by investing in the country. They don't take their wealth from the country, and thus owe and have to pay back. They create wealth, and they usually create more wealth for the rest of the country than they do for themselves.
Now someone passively inheriting the money didn't create the wealth, but her or she isn't taking it either. They are inheriting it from those who create it (or from those who inherited it from the people who created it). If you take the accumulated savings, which typically have already faced taxation, than not only are you committing an injustice, but you are reducing the incentive for people to create all this wealth for the country in the first place.
Also many people inheriting wealth where not so passive, instead working in the family business or otherwise working to create the wealth in the first place.
And importantly taxes aren't an investment and most federal revenue doesn't get used for investments. Most of it just gets transfered to other people. The biggest part of the rest is defense spending, which while important, doesn't produce additional wealth. And then much of the rest still isn't investment, or at least isn't productive investment.
Reality Man - Re: "It's people who are told that their family farm will be taken away after their death and such that support repealing the estate tax."
Well its those people, and others (many of whom, don't have anywhere near the level of wealth to be directly effected by the tax) who recognize the injustice and inefficiency of it.