taxes
Old School Role-Player said:
Hmm, well Welsh, it's good to see that your anti-Libertarian hatred can taint your argument.
Actually I like to think that I continued to answer your argument without a particular taint. Don’t take it personally, but I am generally against most –isms or –ians, as I believe that it’s a matter of individual responsibility to think for yourself, to pursue questions with logic and not be blinded by the emotional rhetoric of false assumptions of those who subscribe or want me to subscribe to their way of thinking. This also goes to neo-anarchists and Nazis who I really hate.
Being responsible for thinking for yourself is one of the great hopes for mankind. OSRP, I hope that you will at least agree with that. You might be a Libertarian, but I hope you are still able to think for yourself.
Old School Role-Player said:
I am simply telling you that politicians have been elected on platforms that you claim Americans don't truly want…I am simply stating that you are not speaking for all or even a majority of Americans when you post your views here and claim to represent the majority.
I agree, my position was primarily motivated so that Europeans didn’t think that we share the views that you or other Americans had posited. My opinions are my own, including my perceptions as to what the American majority wants, and where possible, I try to support that with facts. Americans tend to be pretty moderate, swinging to the left or the right depending on circumstances. This is why elections in the US seem to be a bit boring when compared to elections abroad. It’s very much a contest for the median voter in the US. While we do have extremists on either side, most Americans are not but rather seem interested in maintaining a comfortable and happy life.
Old School Role-Player said:
And I do want to bring this up because--well--I just want to retort to your assessment on the Inheritance Tax. Myth #1: Rich people stay rich because they are "old money" and an inheritance tax takes that money away from them. In fact, an inheritance tax only hurts the middle class, as taking even a moderate portion does not suddenly make them unable to make use of their money. Myth #2: People with "old money" are rich simply because their parents are rich. …. Myth #3: Inheritance taxes only hurt the rich. Sorry again, but this is a blatant example of your short-sighted hatred of rich people.
Well two corrections- (1) I didn’t say this and (2) I don’t hate rich people. In fact I have a few rich friends who would be surprised if someone said I hated rich people. What I do hate is people trying to ascribe labels to me that are not justified but would fit into their rhetoric nicely. So please try to be civil.
In fact what I said was- “Likewise, estate taxes (which GB seems to want to get rid of) are about keeping big money out of the hands of the very rich (like the Bush family and their friends) and dispersing it to avoid class distortions, to reinvigorate investment, and to keep society functioning.”
Now with response to the myths you ascribe to me.
Myth 1- Actually this I didn’t say, although it is a common stereotype. As I have argued before, there are plenty of self-made rich people. From your Ben and Jerry of Ben & Jerry’s Ice Cream to the makers of Apple. But you would be foolish not to recognize that a lot of old money exists as well. Names like Vanderbilt, Ford, Rockerfeller, Lauder, Dillard, Kennedy, and many many others. One virtue of the US, historically, was that individuals could climb through class distinctions very quickly in the US. It’s still possible. While there are fewer Horatio Algier stories than you might like, OSRP, there are a few that still exist.
I am also not willing to accept that the rich are only rich because they were crooks. While this is true in some parts of the world, in the US there are still lots of people who become rich because they work hard.
OK, back to the Myth- Yes, inheritance taxes hurt the middle and poorer classes especially. The reason is because of the failure of the middle and poor to make wills. Through testamentary instruments and good estate planning, one can shield the estate to a great degree. Failure to create a will or testamentary instruments, sends you to intestate proceedings, where the state gobbles up much of the deceased’s property, because its in the state’s interest to do so.
This interest has a long history. Kings of England were afraid of wealthy feudal houses that could rival them and therefore tried to constrain the ability of these houses to retain wealth. SO there were such rules as the Rule Against Perpetuities and others laws of property that have ancient roots. OSRP - check your Estate Tax Text book if you have doubts. However, the wealthy, who can afford legal counsel, can do a better job of sheltering their estates than the poor and middle class.
So lets say Middle Class Inheritor takes property from dead parents valued at $300,000. This is a balance of a house, cars, some stock portfolio, etc. No will and estate taxes are 40%. She pays out $120,000 and it hurts, but hey, she still gets to go home with $180,000 of Dad’s estate. Upper Class Inheritor is to acquire from an estate valued at $3 million (which these days would actually make her closer to upper-middle class). Now she should pay 40% but her dad had a lawyer who was able to shelter 20% of the estate in trusts and other instruments. In the end Upper Class inheritor gets to pay $600,000. Proportionately less than middle class but still a big chunk of change, but she still keeps 2.4 million. Not bad. Proportionately, middle class payer is out a higher share, but upper class tax payer pays more absolutely.
Myth #2:
No, as stated before, I don’t believe that the rich are rich only because their parents are rich. But don’t blind yourself to the amount of old money that floats around Fortune’s wealthiest people.
Myth #3: Again, don’t be an idiot and ascribe to me this irrational behavior.
No, inheritance taxes hurt every estate- rich, poor and middle class and especially those who have not prepared wills and estates. But what about those testamentary instruments? Well often they are in the shape of trusts, and often investment vehicles in which the corpus of the trust is not touched and the inheritor is able to collect some of the proceeds. These trusts are split into various investment vehicles- bonds, bank accounts and mutual funds by which the money is again allowed to circulate (either through loans or investment stock).
Old School Role-Player said:
Think about it this way: Say, for instance, your mother dies, and wills her house to you. The house has been something that your grandfather built with his bare hands back at the turn of the century. It's a very nice house, worth $200,000. Now, you're a typical middle-class guy making a typical middle-class income … You eagerly move out of your apartment with your family and return to your childhood home, thankful that you can honor your mother's wishes and keep the memories of your family alive in this house. Unfortunately, Mr. Tax Collector comes knocking on the door, and hands you a bill for a $20,000 inheritance tax (and 10% is a very low estimate). I guess the only thing you can do is sell the house to pay the inheritance tax. Well, you can still get a $170,000 house and still have $10,000 to pay all the settling and closing costs. That's a good house, right? Sure, the memories are gone from your family, but you still got a $170,000 house out of it right? Yeah, that's fair--your family worked very hard to keep an heirloom and Uncle Sam came over and dipped his grubby little paws into the pot so that he can get his share.
A couple of errors here. First, the courts don’t give two shits about your sentiment. They are about adjudication of law and, as an institution, to resolve economic disputes and provide some legal regulation of economic transactions. The way that you get paid in courts is by money. Rarely, usually on matters of real property actually, will the court grant specific performance. When a person dies the process is usually involves an accounting and a distribution of the estate. This makes more sense. Why, imagine the will says four people are going to split a house. Now the court could give the house to the four people who will promptly divide amongst themselves and fight over who gets the house on a particular weekend. Or it could sell the house and split the proceeds up, and let the kids do with the money what they want.
That’s harsh, I know. But money is a fungible instrument of value in this society. One might feel the bitterness of a lost hand, lost spouse, or a lost contract. The way the court recompenses you is the best it can, through money. Damages in contract, through tort damages for the loss of your hand or the wrongful death of a spouse.
But lets go back to your example above. Lets say inheritor has to pay $30,000 total for an estate involving a $170,000 house. Regretfully the estate didn’t plan on closing costs, but that happens. In this circumstances, inheritor could do two things. One he could sell the house, take the money, buy a new place somewhere else, or build a new place and be happy. Hey, he still collected $140,000. Alternatively, he could probably get a mortgage on the property (what the hell he already has the $140,000 for the house after taxes and costs) and then would be better off paying the mortgage then paying his rent (Since $30,000 on current interest rates is ridiculously cheap). In the end he still makes out better than he did before (he’s not dropping rent in something without capital return).
Is it unfair? Hey he got $140,000 for nothing but being the child of a guy who built a house and is substantially well off.
But the economic system, as you have implied, rewards hard work, not fortuitous acquisition of wealth.
Old School Role-Player said:
Funny how when someone in a business skims off the top like that it's called 'embezzlement', but when the government does it, it's called a 'tax'. Hmm. I guess everybody needs to get their share.
A flat income tax works fine and it forces the government to live within it's budget (by making tough-choice cuts). Instead of focusing all your efforts into punishing people who are successful, maybe you should just put some of that effort to becoming successful yourself. If you say that it can't be done, then you just haven't worked hard enough at it (research and education can go a long way, my friend).
There is a difference between embezzlement and taxation, although this is not true in all countries, especially not where the state is predatory by nature. However, where the country’s policies generally support the economic growth of the country, as in the US, we can see a better practice of that social contract favored by Locke, where the state is taking care of national defense, internal defense and playing its roll in the economic development of the state. There is a difference, but perhaps you haven’t figured that out yet.
As for the last statement, what the fuck are you talking about?
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