The ban on the rule against perpetuities is particularly egregious in my opinion. It serves absolutely no public good and is basically just a tool to entrench aristocracies.
Also an example of how so many of our laws are bought and paid for by the rich and powerful. My guess is that 99% of South Dakotans don't even know what a dynasty trust is, much less have a reason to own one.
The basic idea that is that the public interest is poorly served by allowing people who are long dead to exercise control over property based on ideas they held while alive.
For example, imagine I'm a successful tobacco plantation owner in 17th century Virginia, and I define my identity and my legacy as such. I create a perpetual trust and transfer ownership of my land to it; and I place restrictions on that land that it can only be used for growing tobacco.
What if tobacco is no longer a profitable crop in the future, because smoking tobacco is made illegal? What if tobacco is wiped out by a pest, or can no longer be grown due to changes in climate?
So, it sounds more like you have a problem with the trusts and not estate taxes. If we got rid of estate taxes then we could just pass the money on directly.
The article is pretty clear. They allow "families to pass wealth from generation to generation, indefinitely, without estate taxes at each death". Significant estate taxes are important to a democracy to prevent the rise of a noble class. Even Britain, whose system of inherited wealth and power America's founders were desperate to avoid emulating, now has a significant estate tax: https://taxfoundation.org/downton-abbey-and-death-taxes/
I don’t like that the state can take part of the wealth you’ve worked for after you die. But obviously laws to steal money from everybody else are popular.
To emphasise this point, when an employer pays an employee wages, they pay it with a dollar that someone else earned (and paid tax on) and paid to them (and likely paid sales tax on). Money isn’t taxed, and neither are people; transactions are. An estate transfer is a transaction.
Aside from the services provided by your municipality (which may or may not be paid for out of property taxes) there's the aspect of imputed rent; the notional benefit that you as a tenant receive from yourself as a landlord. Some places tax that explicitly, as it happens.
Money is already taxed multiple times though (in my part of the world NE US). If I buy a car with income received via dividends from Apple stock:
* state sales sax on car
* future city property tax on car
* fed dividend tax on money used to pay for car
* apple already paid state and fed corp income tax on money used to pay dividend
* some person already paid income tax on money used to buy iphones/macs/chargers etc.
Is your position that the estate tax in particular is egregious or that all taxes are egregious? If you only want money to be taxed once then you'd have to redo all the taxes no?
Observing the status quo isn't the same as rationalizing it. Many things exist in the world today which are unjust. Some are even common.
If it is possible for taxation to be egregious, then at some point there must be a boundary which is crossed. How can we define what is a just amount of property to confiscate with our subjective judgment?
It is a moral issue in principle. In practice it amounts to whatever politicians can get away with. Ideologues present wealth as evidence of greed. Envy is celebrated. The person with a bigger slice of pie is blamed for other's perceptions of insufficient portions, as if markets represent a zero-sum game.
Cries of, "You didn't build that" are overly simplistic and misleading. If they were valid, collectives and central planners could produce surpluses without need for individualized incentives. Yet history tells us a different story.
That slice of pie which so many here seem unhappy with is much bigger than what was eaten in years before. This is the result of individual profit incentives, competition and innovation, not taxation or central planning.
If it is to be a moral issue, perhaps we should start from the point of not coercing others or violating their property rights?
You made a good job presenting that particular dogma, but you gave the game away here:
> not coercing others or violating their property rights
Property rights always involve coercion, at least when you get beyond the basics of personal property. How does, say, Jeff Bezos own a variety of lavish properties across the country [1] when a half-million people in the US are homeless?
The short answer is that he depends on coercion. He expects that both private and state actors will coerce people into staying away from stuff he has claimed. Violently if necessary. And we're not even getting into the many flavors of coercion that underlie his enormous wealth.
The fundamentalist libertarian position always ends up in these sorts of incoherencies, because it makes ardent demands of a society it wants no part of otherwise.
Property rights are a fundamental cornerstone of society. Rejecting them is incoherent. Infringing on another person's property is synonymous with coercion. Perhaps next you'll venture that self-defense is a bourgeois construct?
As for Amazon, maybe look more closely at the government interventions in the financial markets. Yes, Bezos is an entrepreneurial figure. He is also symptomatic of an artificially supported economic system. The central bank injects liquidity. Financial markets acquire it first, and consumers are left with the inflation.
I would argue that large concerns like Amazon are enabled by the current paradigm. We could describe it as a tax by other means and price fixing of interest rates.
You've constructed a straw man (I never rejected property rights) while ignoring my actual point. This tendentious behavior is typical of fundamentalists, fundamentalist libertarians included. Unless you can do better, I think we're done here.
Bezos owns property, therefore he is coercing others. You conflate voluntary exchange and private ownership with coercion. It is fundamentally nonsense. You'll have to forgive me for having a hard time with this, it seems to be a terrible stretch.
As for libertarianism, observing that adds no more to the conversation than me calling you a socialist, statist or authoritarian.
"You didn't build that" is as naive as "all taxes are theft" no? As important property rights are so is working together. No one human kills a lion or works a farm no?
Your money? It says right on them that they're United States Dollars.
Jokes aside, the rules of property are set up by society to encourage certain jointly beneficial outcomes. Money itself is an inherently social construct. (Imagine how far you'd get creating your own private currency that only you used.) And we are all temporary beings, here a little while and gone. Yes, some of the rules designate some of the property as yours to dispose of for the duration. Which is great! But make no mistake that these rules are contingent.
If tomorrow I hacked all the banks and land registries so I owned everything, people wouldn't say, "Well, I guess that's how it is now." The same is true if I did it technically within the rules. Everybody would make new rules. And they'd be right to. In the phrasing of James Carse, the current rules are the finite game, but like all finite games, the rules are generated by what he calls the infinite game: https://en.wikipedia.org/wiki/Finite_and_Infinite_Games
If more than one person is using a currency, it's definitionally a social activity then, and pretty clearly not what I mean by "your own private currency that only you used".
I think if modern life was a boardgame, no one would want to play because the system is too rigged.
To me it's silly to see how much unused land there is in the USA but people aren't allowed to use it because a few people showed up 150 years ago and claimed it for themselves. And when they did they stole it from other people. Now people are just supposed to respect that forever?
Once you've passed it on to them, it's their money, no longer your money.
The rule against perpetuities only prevents you from constructing a zombie legal entity which outlives you permanently. Some places have a fixed, high time limit; many merely have the non-onerous rule that you can only leave it to people who were alive at the time of your death.
Sure. I don't like people using the infrastructures of the state and community plus community labor while privatizing their gains and socializing the costs.
Maybe we can compromise on you taking yourself to some remote spot cut off from a society and generating your wealth there? Then we can all be sure your gains are truly yours, and so nobody will mind you hoarding them.
A rich person already pays taxes at a rate that is currently heavily influenced by rich people, so I'm not seeing that as much of a justification.
But yes, when a rich person gives their money to another person, that other person now has to pay tax. An estate, gift, or income tax.
Many rich people pay their employees, some don't; wage theft is very popular, as are other forms of labor exploitation. But an educated, healthy, available labor force is a very expensive asset to create. We all invest in creating that through things like paying for schools, health care, and raising children. One of the ways we pay for creating that asset is taxes. Rich people, as the ones most benefiting from society, and also as the ones with the most spare money, should pay their fair share for that.
The recipient of a gift does not pay gift taxes. The payer does if they have not used up their lifetime exemption or unless it is belo the annual limit.
I believe in the US the current annual limit before a gift is taxed is $15,000.
EDIT: the point of raising it is in the context of this discussion, we are talking about the very wealthy. A $15,000 gift to their children isn't very much of a transfer as a percentage. To hand off large amounts of wealth to the next generation, for sure the annual gift exclusion isn't nearly enough to avoid inheritance taxes.
It's quite amazing isn't it? One minute you have the ability to direct wealth towards enriching your children's lives and then you're dead and the state says no we get to take 97% of all of it. It's no wonder wealthy people hoard wealth in none cash forms.
I was under the impression there's a large exemption for inheritances under a few million and then it's still a number lower than income tax on the rest.
Philosophically, you don't own anything after you're dead. Someone else, alive, is getting income in the form of an inheritance.
Of course 97% is nonsense. And $11.7M per family is completely untaxed, something the billionaires pushing for an end to inheritance tax do an amazing job of obfuscating.
If you think death only takes away the ability to spend money, I have some bad news for you.
In any case, in the US the estate tax and the gift tax are basically the same thing, so rich people can give the same millions to their kids either before or after they die and pay basically the same taxes: https://www.cbo.gov/publication/57272
When a human is able to amass billions today it is not because of their own abilities. With their own abilities alone they could at most build a mildly nice hut from mud and forest wood.
The reason they can build modern stuff is due to the work of billions of people networked in space and time (knowledge, processes & culture, tools, infrastructure) to which the "self-made rich person" has the extreme fortune to be able to build on (even today most people are born in places too far away to benefit equally from that network and are only able to access a tiny part of it, so no matter their own contribution they are lacking the base).
Tell me, why would a person whose accomplishments are ~99.99999% based on the work and accomplishments of others be allowed to monopolize it as if they were truly responsible for everything?
As far as I'm concerned the government should truly not be allowed to tax your entirely self-made mud hut disconnected from infrastructure in the middle of nowhere.
For all else, you benefit from gigantic network effects (in space: all other people alive making things, in time: everything we got from previous generations) and should pay your dues. Given that, even a very high tax rate especially after death is extremely generous. The descendants had even less to do with anything the person that sat in a perfect place in the human network accomplished by making use of their advantageous position (to be exact, zero). At most, their contribution is to be able to use said network very well - although it also happens a lot that they did so by preventing others from using it.
>Tell me, why would a person whose accomplishments are ~99.99999% based on the work and accomplishments of others be allowed to monopolize it as if they were truly responsible for everything?
Wealth is the incentive for the wealth creation you're observing here.
Wealth is an incentive for wealth aggregation those aren't the same thing. More wealth would be created if companies payed their workers more (since poor people actually need the money to pay for things)
Businesses don't create value by overcompensating employees. Without the profit incentive for the entrepreneur there is no business. The consumer's problems are not solved, no jobs are provided and no value is created.
In some cases it does make sense for employers to increase compensation. Especially when productivity is high. Usually productivity gains are a result of innovation, which is incentivized by the profit motive.
> Without the profit incentive for the entrepreneur there is no business.
This just isn't true. I have entrepreneurs on both sides of family going back at least 3 generations. Many of them were happy just to create something and make a decent living.
I grant that part of corporate America's civic religion is pretending that greed is the only possible motivator for anything good. And maybe that's true for some people. But if you talk with actual entrepreneurs, especially ones outside the tech filter bubble, their true motivations are rarely about a chance at vast riches.
The profit incentive remains. The ends to which they apply those profits are up to the individual entrepreneurs. There's nothing wrong in my view with worker owned businesses, as long as it is a voluntary arrangement. From where I stand these businesses are entirely valid options which can exist in a free market. Where you paint them as as in conflict with the profit incentive or a 'civic religion of greed', you branch off into pure hyperbole.
It's far from hyperbole. Wealth accumulation is a motivation for some. But it's just not central to a great deal of entrepreneurship and innovation. I know one guy who started a billion-dollar company, and his take on profit was entirely utilitarian: "Profit is permission to continue", meaning that it's just an indicator that the business is self-sustaining.
This is just subjective value, again. He wants permission to continue, thus he wants profits. From there we can conclude that there is a profit motive.
Since we were talking about inheritance, how is this relevant? While alive the person has their wealth and the incentive you mentioned (if it's even all that relevant to them, but that's an unrelated question), and the next generation has the same incentive. More in fact if they have to actually do something compared to them simply inheriting a lot of wealth.
An easy hypothetical would be someone who is incredibly wealthy and near the end of their years. Inheritance and death taxes may reduce their incentives to contribute to the economy. Someone who is an experience job creator might choose leisure instead.
Keep in mind that death taxes may apply not only to what is inherited by family members, but charitable foundations created as well. Charity starts with the possibility of abundance.
> Wealth is the incentive for the wealth creation you're observing here.
That's definitely not true. The great bulk of people, who do the great bulk of the work of value creation, can't possibly be motivated by wealth, because definitionally they won't receive it.
There's also no reason to think that the ecommerce revolution wouldn't have happened without Bezos or some other person becoming a zillionaire. There are plenty of entrepreneurs who are happy as long as they get to make things happen and make decent money.
Absurd levels of wealth are an incentive for wealth concentration, not wealth creation. The creation of value would certainly happen without that. And generally happens better without it, which is why we have things like antimonopoly laws.
Two wrongs don't make a right? I would agree that a free enterprise system
tends to grossly overcompensate its assignation of capital, but you don't cure
it with an even more inefficient system like taxes (which, if you've taken
econ 101, results in something more sinister called "dead weight loss").
Ultimately, it's not a question of how deserving billionaires are (they
obviously aren't). It's more a question of how to best advance the interests
of our species as a whole.
It sounds like you agree that billionaires are overcompensated relative to their contributions to society. If taxes aren't a good way to address this, what is a better solution?
Daytrader, yes. Flight controller, no. Unlike the buffoon with five kids who loses his shirt, your son's losses would presumably be limited to his allowance, at which point he'd learn canning might be more his calling. On the other hand, his chances of succeeding in forex are about as good as anybody else's.
Where do you see "two wrongs"? I don't understand this reply at all. I don't see the connection to what I actually wrote.
> Ultimately, it's not a question of how deserving billionaires are (they obviously aren't). It's more a question of how to best advance the interests of our species as a whole.
I agree, and I don't see any connection to what I wrote here either, meaning how this is supposed to be a contradiction to my point?
Everyone knows billionaires are standing on the shoulders of giants from Shannon to Shockley, neither of whom were billionaires. Getting these pioneers their just desserts from taxes, assuming they even wanted them, would be like using the wrong end of a hammer to nail a board. My initial response (the one you thought missed your point) assumed this and hopefully also disabuses you of the notion that life can or should be fair.
My mom already "owns" whatever money my dad makes and vice versa. They file jointly and have partnership+joint accounts. This has been the case for 40+ years. The money won't go to her when he dies. It's already hers. I see what you're getting at but that's a bad example.
Alternatively: estate taxes are a huge boon to the accumulators of wealth because they allow people to shift much of their tax burden until after they're dead and don't need it anymore. Cut the estate tax and you'll need to increase the taxes people pay while they're alive.
That's a ridiculous point, by the way. All money is taxed repeatedly. Hand it to a store. Sales tax. Report it as profit. Corporate tax. Pay it to employees. Income tax. Hand it to a different store... There's no "moral" calculus here. We tax economic activity. If you give money to someone else, be it for a candy bar or in an inheritance, that's economics and the apropriate place for government to take a cut is on something that sales linearly with the economy.
Why is being taxed multiple times immoral? My income is taxed and when I spend it the receiver is taxed again. Also, “immoral”, is that the word angle you want to take? Seems hyperbolic
You're taxed on income. You save buy a house, and you're taxed on the property you bought. You're also taxed on dividends from any remaining savings. You're also taxed on any spending you do (in most states).
"Money should only be taxed at one specific point as it passes through the economy, and anything more is immoral" is actually a large claim to make. It's not self-evident, and requires at least some justification.
"Hey, that's already been taxed!" does have some intuitive appeal, but honestly I think that intuition comes from the game of Tag or something.
But money, being fungible, in constant circulation, and yielding assets and profits from re-investment, has many points at which it might feel fair to tax it.
It might not feel fair, but at least there's more there to discuss.
Almost every dollar that comes into almost anyone's possession has already been taxed, so you could make the same argument about income taxes and sales taxes. I doubt that I have ever owned a dollar that had not been taxed before I got it.
Same also goes for taxes on real property. My land had already been taxed long before I bought it.
Do you think that all of those taxes are also immoral?
This question is not made in good faith and I think you know it.
The Crown Estate is not the personal property of the monarch, it's essentially just government assets. Who is the Crown Estate going to pay taxes to, itself?
>The Crown Estate is not the personal property of the monarch, it's essentially just government assets. Who is the Crown Estate going to pay taxes to, itself?
Pretty ingenious way to allow "families to pass wealth from generation to generation, indefinitely, without estate taxes at each death". The UK should do something about that. I hear significant estate taxes are important to a democracy to prevent the rise of a noble class.
Weird. I was told that even Britain, whose system of inherited wealth and power America's founders were desperate to avoid emulating, now has a significant estate tax
The Crown Estate does not do this. It is not familial wealth. It arose as a settlement absolving the monarch from personal responsibility for the nation’s finances.
The monarch does does receive a percentage of profits from those Crown Estate assets though.[1]. I understand that some of this goes to the upkeep of royal palaces but it does invite the question of how many palaces one family needs? Especially when the Queen actually owns Balmoral and Sandringham Castles i.e they are not part of the Crown Estate.[3]
I'm curious if anyone knows how or why The Duchy of Lancaster[2] was not included in the The Crown Estate?
The UK has inheritance tax for literally everyone except one person passing that estate to her direct inheritors. This is why bringing it up is derailing.
(and yes obviously the hereditary monarchy and peerages do not belong in the modern era let alone the 21st century, but changing that in a not especially democratic country is hard)
Serious question, what is wrong with a noble class? If the family line squanders that wealth, then they weren’t noble. If they are wise with it and good stewards, then it seems like it makes sense that they would become part of the nobility.
It isn’t some zero sum game, where there is some limited amount of wealth, and by them having it others must be destitute.
I’d be curious if those with several children feel differently than those with none. I love the idea of my sacrifices today one day benefitting my grandchildren’s’ grandchildren in a material way. I feel like if more people lived with the thoughts of how they can improve their own descendants lives over improving their own the world would be a better place.
The problem is that it is largely a zero sum game. Everyone can't be nobility who never has to work a day in their lives. If some % of the population becomes entrenched as perpetual nobility, it becomes almost impossible for anyone else to break in. See feudalism.
I still don’t think it is a zero sum game, persay, but that is a good point about entrenched nobility. Even then the problem is are they exploitative, or are they generous. Then having power is only bad if they are evil. But fortune and chance will affect all, some will rise up, and some will fall down.
I think as a whole the economic pie would grow if all of us strove that our families might become nobility.
No, power over others is intrinsically bad, as it's the ability to force people to do things whether or not they think it's what they should be doing. Sometimes it's necessary to prevent further harm, of course. So we should always be seeking to limit and diminish power differentials in society.
If you disagree, you can demonstrate your commitment by giving me unlimited power of attorney. I'll use that to your assets and income to my accounts and I'll give you back whatever's truly best for you. I am obviously good, so you can trust me on this.
Power over others is not intrinsically bad. It is an utter fact of nature. In some sense having power over others is neutral.
What is also true is there are those who are weak.
And everyone will have some little power at least, and some amount of weakness.
While Marx thinks it is only used to oppress, that is just what he would do with it. I’d say for every person there is an amount of power they can wield for good, and past that they will use it to oppress.
The most wicked can’t even use their smallest bits of power for good. The best of us at some point would start to use our power to oppress.
There is no neutral ground though, you will use your power (be it physical, emotional, sociological, spiritual), to oppress the weak, or to lift them up.
Because in order to have power in one area (e.g. you’re highly educated, speak well, or wealthy), there is someone else who must be weak (uneducated, stammers, or poor).
To say power is intrinsically bad, is to say being weak is intrinsically bad, because being weak means someone else has power over you. “blessed are the meek” is true, but that is because someone powerful took the side of the weak, and defends them.
The problem today is we have a ruling aristocracy, and they’re not noble and good, but oppressive and evil.
What you are indulging in here is the naturalistic fallacy, aka the is-ought fallacy. What's natural tells us nothing about what's good.
Tuberculosis is natural. Tooth decay is natural. If you believe what's natural is what's good, go hang out with people coughing their lungs out. Stop brushing your teeth. Refuse to take antibiotics. Have your next of kin let me know how long you survive in your immersion in utter facts of nature.
Similarly, if you think power over people is good, prove it. Send me all your money. Sign a power of attorney. I'm good, I promise.
(You also have a lot of fantasies about intrinsic goodness/badness. That may work in particularly Manichean novels involving wizards and whatnot. But please recognize that's the inside of your head leaking out, and not what's actually happening in the world.)
What makes us humans as opposed to mere animals, is that we are not ruled by nature. Power exists naturally, the lion will tear apart the gazelle, chimpanzees will engage in cannibalism, it’s our humanness that allows what is natural to also be good. We should not devolve into nihilism, we should reach for what is good.
Those stories are the way we describe what some material thing is doing. They most certainly exist and not just in my head, they’re just not material.
I also might have family wealth be the source of the aristocracy as opposed to the politicians reaping the benefits of taking their wealth. You’ll still have the poor, but those in the aristocracy will be bureaucrats, who effectively stole their way in. It isn’t like these taxes will actually go to the poor.
All forms of taxation and governance are subject to your same vague unfounded "concern" of 100%-embezzlement; the only thing about an estate tax that's special or different in that regard is that it mitigates the formation of a hereditary aristocracy.
A well-managed trust fund is, by definition, a conservative investment portfolio that only distributes a fraction of its value, and only to a chosen few heirs. A government spends its tax dollars, with a significant portion already going to welfare. Even the closest equivalent usage of tax dollars, sovereign wealth funds, are managed for distribution to the citizenry as a whole. Your premise is bunk.
Like I’d hope that my daughters have enough that they don’t have to feel like they have to get married, or if they do that they could feel they have the option to stay home and take care of their children without having to work to make ends meet.
I’d hope my grandchildren are so well off that they can go get a higher education and get a liberal arts degree for the love of learning. Study history, philosophy, sociology, these are all great fields of study, they just don’t pay well. That they could just be intellectuals and not laborers would be great. After a few generations of just being intellectuals or less if they live lavishly, they will have to return to labor, and that ok.
There is nothing wrong with folks like me getting an engineering degree because they want to work and make money, but it doesn’t seem like a bad desire to hope that your children will not have to labor because you did.
I really like this quote from Warren Buffet “Leave your children enough money so they can do anything, but not enough that they don’t have to do anything.”
I want my children to be able to do what they want. However, I want to raise productive, functioning adults.
I don’t think raising productive functioning adults is mutually exclusive from leaving them an inheritance enabling them not to work to live. There is too much ideas that unless you get paid to do something it isn’t worthwhile.
I wish people could study the liberal arts or sciences freely to expand knowledge, not for the sake of money. This is a privilege only provided to those whose parents leave them a large inheritance.
The reason that people have the idea that "unless you get paid to do something it isn’t worthwhile" is because getting paid for something is reasonable evidence that you're creating value for others. That's important to do if you will be consuming the value created by others. Children raised without that feedback loop can easily be not so functional, in that will focus on serving themselves, not others.
If you have enough money to fund things like socially beneficial research, then you should just fund that. The MacArthur Genius Grants are a good example of that. There's no particular reason to think that your particular children are the best ones to be doing that, especially if they've been raised in an environment where their wealth has let them avoid serving others.
> It isn’t some zero sum game, where there is some limited amount of wealth, and by them having it others must be destitute
Take a look at some of the recent "Who owns Britain" exposés, which looks at land ownership in Britain. Last I checked they weren't making any more land, and a huge percentage of British land is held by nobility who passed it down from the times of William the Conqueror. Am I supposed to think it "just" that someone never has to work a day in their life, while their tenant farmers toil to pay rent, because their great great ... great great grandaddy was friends with a French king?
You have the same thing today. The better equivalent of the aristocracy back then is the political leaders today. Back then the merchant class began to gain lots of wealth, which the aristocracy (government leaders) could inhibit, but wouldn’t as long as they got their cut (taxes)
I mean, I guess it's just a matter of perspective. If you think having an entrenched class system is good, then I guess nothing is "wrong" with it.
Sure, early on in the system it's possible for it to be fairly competitive. You have a mix of responsible and irresponsible families passing down wealth, and the ones that do it best will retain their wealth the longest. But over time it becomes a very different game. Take a look through history; the stories it tells don't look good for the bulk of the working class.
It's one thing to be able to leave your wealth to your children, it's another thing to have a completely protected trust that is exempt taxes. The longer this runs, the less money forced back into the economy and through compounding interest it becomes impossible for a new set of "nobility" to reasonable ever achieve the same status.
It is a zero sum game, as there is effectively a limited amount of wealth. And the more it becomes centralized around a noble class the less everyone else has.
You can leave money to your children today, it's not like that's not possible. So I am not sure what you're on about. The loophole being discussed here is doing it free from taxes. Like Elon Musk won't need to shelter his kids kids kids from taxes on his billions. If you make enough money that can be true for you too. But yeah, you might need to teach your kids proper financial skills so that they don't blow through what you leave them so it reaches your grandchildren.
You can already setup a trust today for your kids. You can leave your kids shares in a brokerage account and that has some pretty solid tax advantages. There are a ton of ways to leave behind your wealth that doesn't require completely untaxed assets.
Yes obviously that's what you want, but the public interest is not served by having an economy of which increasingly large parts are held by dead persons and their unaccountable proxies.
Well, some of us who didn't have rich, white relatives in the era of the robber barons would like to leave our children our businesses and wealth intact so they can build up the family. Changing the rules when minorities are trying to build wealth is a bit problematic.
These things aren't black and white. There is an enormous difference between a 7 digit (millions) estate, and one measured in 10+ digits (billions). While income/wealth inequality does encourage work and innovation, it is entirely different when inequality becomes an entrenched oligarchy.
There should not be a difference here. If person who earned 10+ digits produced 10+ digits worth wealth, how can you justify taking it from him? Lets take Elon Musk - did he not earn his 10+ digits? Would you rather live in the world without electric cars and affordable space travel? And now that he already delivered something that greatly benefits everybody you want to steal what he rightfully earned. Why is it that you think you even deserve equality - I know what Musk did for humanity, what was your contribution again?
The estate tax does not apply to the first $11.7 million, the children will be fine. If you're wealthy enough for the estate tax to be relevant to you, you're wealthy enough to do estate planning that factors in the taxes due.
The robber barons you're thinking of lived a long time ago and very few of the wealthy today inherited their wealth from them. We should be more concerned about the robber barons walking around today and how our policies benefit so few winners and fosters income inequality.
But when I'm dead, the wealth I generated isn't. Of course many people would benefit from cannibalizing the result of my work, but calling it "public interest" is disingenuous. If property rights are not respected, nobody wins in the end. Look at [this video](https://www.youtube.com/watch?v=Y0IvTwBWUpE) for example of what happens when mob can take your wealth at any moment. Even the poorest people with no capital win when there is strong protection for the results of their labor.
It really worries me how a bunch of people in this forum promote marxist ideas, with absolutely zero first-hand knowledge of what ends up happening, and hint: it's not in public interest whatsoever. "Democracy" doesn't mean free-for-all.
You're oversimplifying the problem into a binary one where either wealth goes untaxed, or communism prevails. Evidence to the contrary abounds all over the world.
Over a period of a few centuries we have figured out that allowing significant amounts of wealth to be controlled by the wishes of people who died 100 years ago. Imagine, for instance, how perfectly mainstream beliefs in the US would have led someone setting up an educational trust to specify that it was only to support white men. Just a couple generations passed we would look upon that policy with anathema.
The rule against perpetuities is what our legal system evolved to address this problem. It says that you can direct how property is used during your lifetime, and beyond that through the lifetime of someone who was living at the time you died. But that you cannot control how money and property is to be used beyond that point.
First, a little background on estates in land. The simplest is what is called a "fee simple". When you have a fee simple interest in some land it is what we traditionally think of as owning the land. That land is yours to do anything you want with (that's legal) from when you acquired the interest until the end of time or until you convey your interest to someone else.
Another common estate in land is the leasehold estate. If I own some land in fee simple I can sell you a leasehold estate that runs for a specific time period. During that time period it is essentially your land. When the leasehold ends my fee simple ownership resumes.
Another common estate is the life estate. This is a lot like a leasehold except that rather than being for some fixed time period it is for the life of someone. They were common in wills (I have no idea if they still are common), typically with someone leaving their estate to the widow for life with the remainder (the term for what comes after any finite estates like life estates end) to the eldest son or split among their children or some such.
Note that in the above example of creating a life estate, the dead person is able to control both what happens to their land immediately (their widow gets it) and what happens in the future when their widow dies.
It didn't end there. Let's say you were an army veteran and very religious. You could in your will give your widow a life estate, then your oldest direct male descendant an estate that lasts until he dies or until one of your direct descendants reaches the rank of Captain in the army or becomes a priest or nun in which case the first such direct descendant gets a life estate, with the remainder to their oldest child if they have one else to be sold at auction with the proceeds split equally among your living direct descendants.
Lord Montague could stick conditions in the estates he left in his will so that anyone who came into possession of the Montague lands after he died, no matter how long after, would lose their estate if they married a Capulet or descended from a Capulet.
In short if you owned a fee simple estate you could impose nearly arbitrary conditions on who could possess the land after you and what they could do with that could in theory restrict the land forever afterwards.
This makes it hard to put land to its economically best use. A seller cannot sell more than they have. I'm not going buy or lease your land to build my factory on, or build a housing development, or do anything that requires a significant investment if I have to worry that some third cousin of yours will marry a doctor and trigger some condition in the will of some ancestor of yours that died 200 years ago that gives them the land. Maybe my lawyers and genealogists can identify all people that might be beneficiaries of such un-triggered conditions and get them all to sell or lease me the land--but often even that won't be enough because some such people might have yet to be born.
Governments recognized that it is good for land to generally be freely sellable and buyable, and that the living should be able to fully use the land. And thus we got rules to limit the ability of dead people to place far reaching long lasting limits on what happened to their land after they died.
The rule against perpetuities strikes a quite reasonable balance between keeping land reasonably buyable and sellable with minimal restrictions on what the living can do with the land and giving people some say in how their land is inherited.
The classic statement of the rule is:
> No interest in land is good unless it must vest, if at all, not later than 21 years after some life in being at the time the interest was created.
This basically gives you the current generation plus 21 years of control over what happens to your land. It is enough that you can specify conditions involving grandchildren that do not yet exist, or even conditions on adult grandchildren that do not yet exist because if any such come into existenc...
Strongly. Take a step out of San Francisco and step into a diner in the midwest: ask a patron about dynasty trusts and they’ll talk your ear off! While not a top-of-mind concern, it’s something people feel strongly about. /s
To be honest though there’s a lot of fear mongering around the estate tax causing a family to lose their farm.
It’s not fear mongering if it’s factual. Farms are low margin businesses — If they are being taxed when the patriarch dies, I don’t see how they keep their farm.
Democrats love estate taxes because small businesses and farms don’t have the political power to fight them off.
>Democrats love estate taxes because small businesses and farms don’t have the political power to fight them off.
You don't think they like estate taxes since a fundamental building block of progressive thought is to dismantle nobility? You're hiding behind farmers when it's really centa-millionaires and billionaires that are the largest opponents of estate taxes.
Are centa-millionaires and billionaires the ones most likely to avoid such taxes by setting up these dynasty trusts, or other tax shelter, in whichever jurisdiction that allows it?
Puerto Rico blossomed over tax benefits by bringing your business there, then that stopped and things were not the same since unfortunately. It now has some tax incentives for people bringing their businesses there or so I have heard from relatives.
Tax incentives and tax havens are pretty different. Every US state uses tax policy to encourage industry. Tax havens are places that use their legal power to help rich people elsewhere avoid accountability and their tax laws at home. None of these rich people are moving to South Dakota to open factories. They're just sending their money there so it's harder for people in their own states and countries to see what's actually going on.
Is there even much money being sent to South Dakota other than fees and a few meager salaries to satisfy government paperwork or trustee residency requirements?
Good question! From this I was thinking yes: "The state’s trust assets have more than quadrupled to $360 billion over the past decade, the report finds." But you're right, unless there's special language to the contrary, presumably those trusts just put the money elsewhere.
So what taxes does South Dakota actually levy on the trusts? I doubt the beneficiaries actually live in South Dakota and setting up a trust does not imply the movement of businesses. Does South Dakota gain much from this tax haven-laws?
The trustee must live in South Dakota for at least half the year. I'm unsure if there are any other taxes involved but it at least creates a number of high income financial jobs in the state.
That's another quirk of South Dakota law. Essentially the state has no limit on interest rates, which is why all the credit card companies have offices there.
I think you're confused as to who the trustee is, they are the one who legally owns the money but has no legal right to use it. The people who can receive/use the money are the beneficiaries, and the people putting money into a trust are the grantors.
The relentless media barrage of hit pieces on taxes continues. It’s non-stop with outrage inducing prose aimed at drumming up enough outrage to justify the ludicrous tax changes being purposed by the current administration including a 3.5 trillion dollar infrastructure bill that isn’t even infrastructure. Learn more about the real purposed tax changes and how they hurt middle class, upper middle class, and impeded innovation at https://www.advantaira.com/blog/how-bidens-3-5t-infrastructu...
the infrastructure bill is awful, but pitting it against tax policy proposals is a false dichotomy. both can be bad and in need of change.
taxes should be simple, continuous and highly progressive. if it were so, most americans (90+%) would enjoy the same or lower tax rates with little change in public services and potentially a boost in infrastructure. we’re highly inefficient and there’s little political will to change that.
Being against estate taxes and being against entrenched aristocracies are not mutually exclusive positions.
Being against taxes on already-taxed monies benefits self-made families as well.
Provided that old money can lose money by squandering inherited wealth, the two positions are very logical and to the benefit of society.
The issue here that no one seems to mention is that aristocracies should not be able to leverage the state to protect their wealth.
Old money in france and italy is sustained due to protection of state. The US rich, due to the growth of the growth of the state apparatus, having increasing ability use the state to shield aristorcracy here.
Quick examples:
- TARP bailouts
- Neverending wars to benefit defense industry
- Biden admin reversing hospital pricing transparency executive order.[1]
- All the newly minted 'czars'
- Disney IP laws
- Antitrust failures in the last 30 years
I don't think anyone has a problem woth the rich if they get there by playing by the same rules everyone else plays by.
However when you see major rich politicians on TV, dining without masks, while telling everyone else this is prohibited, you know the problem is not the rich, but the rule-makers
On August 2, 2021, the Centers for Medicare and Medicaid Services (“CMS”) issued its hospital inpatient prospective payment system (“IPPS”) final rule (“Final Rule”) for fiscal year 2022. In addition to a number of other changes, the Final Rule **repeals the price transparency requirement** for hospitals, discussed in our September 2, 2020 blog post, obligating hospitals to report certain contract terms with Medicare Advantage (“MA”) plans for cost reporting periods ending on or after January 1, 2021.
An inheritance is a transaction, the notion that the money “has already been taxed” makes no more sense than it does to say that income or sales taxes are double taxation because my income was taxed already when someone made a purchase at the store I work at.
I don’t understand why it’s more reasonable to characterize those who do business in low tax areas as “tax dodgers” than it is to characterize high tax governments as “new business haters.”
If you've never visited, give it a try. Flat lands, no pollution, little traffic, friendly people who put a great value on freedom. Truly a great state.
Mount Rushmore is in South Dakota, as is the Corn Palace and Wall Drug. (If you want to study ingenuity in business, have a look at Wall Drug.)
Just don't visit in the winter months. One of the few things that will give you a negative impression of the state.
> (If you want to study ingenuity in business, have a look at Wall Drug.)
I wasn't aware of Wall Drug [0].
From their homepage:
Wall Drug has a rich history in the state of South Dakota. Nestled in the city of Wall in the western part of the state, Wall Drug has grown from its humble beginnings in 1931 to a thriving oasis. Wall Drug offers dining, activities, gifts and souvenirs, visitor information and, of course, free ice water. Many road-worn travelers stop at Wall Drug and leave awake and refreshed, just like they did more than 80 years ago.
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[ 2.9 ms ] story [ 218 ms ] threadAlso an example of how so many of our laws are bought and paid for by the rich and powerful. My guess is that 99% of South Dakotans don't even know what a dynasty trust is, much less have a reason to own one.
For example, imagine I'm a successful tobacco plantation owner in 17th century Virginia, and I define my identity and my legacy as such. I create a perpetual trust and transfer ownership of my land to it; and I place restrictions on that land that it can only be used for growing tobacco.
What if tobacco is no longer a profitable crop in the future, because smoking tobacco is made illegal? What if tobacco is wiped out by a pest, or can no longer be grown due to changes in climate?
In fact, I'm fairly sure the rule against perpetuities predates the existence of any substantive probate or estate taxes.
After all it's new income for them.
And if it did, then taxes would have been done a long time ago, because money in its endless circulation pays taxes all the time.
To emphasise this point, when an employer pays an employee wages, they pay it with a dollar that someone else earned (and paid tax on) and paid to them (and likely paid sales tax on). Money isn’t taxed, and neither are people; transactions are. An estate transfer is a transaction.
A house isn’t a person. Saying transactions, not people, are taxed doesn’t mean that only transactions are taxed.
* state sales sax on car * future city property tax on car * fed dividend tax on money used to pay for car * apple already paid state and fed corp income tax on money used to pay dividend * some person already paid income tax on money used to buy iphones/macs/chargers etc.
Is your position that the estate tax in particular is egregious or that all taxes are egregious? If you only want money to be taxed once then you'd have to redo all the taxes no?
If it is possible for taxation to be egregious, then at some point there must be a boundary which is crossed. How can we define what is a just amount of property to confiscate with our subjective judgment?
It is a moral issue in principle. In practice it amounts to whatever politicians can get away with. Ideologues present wealth as evidence of greed. Envy is celebrated. The person with a bigger slice of pie is blamed for other's perceptions of insufficient portions, as if markets represent a zero-sum game.
Cries of, "You didn't build that" are overly simplistic and misleading. If they were valid, collectives and central planners could produce surpluses without need for individualized incentives. Yet history tells us a different story.
That slice of pie which so many here seem unhappy with is much bigger than what was eaten in years before. This is the result of individual profit incentives, competition and innovation, not taxation or central planning.
If it is to be a moral issue, perhaps we should start from the point of not coercing others or violating their property rights?
> not coercing others or violating their property rights
Property rights always involve coercion, at least when you get beyond the basics of personal property. How does, say, Jeff Bezos own a variety of lavish properties across the country [1] when a half-million people in the US are homeless?
The short answer is that he depends on coercion. He expects that both private and state actors will coerce people into staying away from stuff he has claimed. Violently if necessary. And we're not even getting into the many flavors of coercion that underlie his enormous wealth.
The fundamentalist libertarian position always ends up in these sorts of incoherencies, because it makes ardent demands of a society it wants no part of otherwise.
[1] https://www.businessinsider.com/jeff-bezos-owns-five-massive...
As for Amazon, maybe look more closely at the government interventions in the financial markets. Yes, Bezos is an entrepreneurial figure. He is also symptomatic of an artificially supported economic system. The central bank injects liquidity. Financial markets acquire it first, and consumers are left with the inflation.
I would argue that large concerns like Amazon are enabled by the current paradigm. We could describe it as a tax by other means and price fixing of interest rates.
https://www.nasdaq.com/articles/amazon-borrows-%2410-billion...
As for libertarianism, observing that adds no more to the conversation than me calling you a socialist, statist or authoritarian.
Jokes aside, the rules of property are set up by society to encourage certain jointly beneficial outcomes. Money itself is an inherently social construct. (Imagine how far you'd get creating your own private currency that only you used.) And we are all temporary beings, here a little while and gone. Yes, some of the rules designate some of the property as yours to dispose of for the duration. Which is great! But make no mistake that these rules are contingent.
If tomorrow I hacked all the banks and land registries so I owned everything, people wouldn't say, "Well, I guess that's how it is now." The same is true if I did it technically within the rules. Everybody would make new rules. And they'd be right to. In the phrasing of James Carse, the current rules are the finite game, but like all finite games, the rules are generated by what he calls the infinite game: https://en.wikipedia.org/wiki/Finite_and_Infinite_Games
Coinbase and other places seem to facilitate private currencies.
To me it's silly to see how much unused land there is in the USA but people aren't allowed to use it because a few people showed up 150 years ago and claimed it for themselves. And when they did they stole it from other people. Now people are just supposed to respect that forever?
The rule against perpetuities only prevents you from constructing a zombie legal entity which outlives you permanently. Some places have a fixed, high time limit; many merely have the non-onerous rule that you can only leave it to people who were alive at the time of your death.
Maybe we can compromise on you taking yourself to some remote spot cut off from a society and generating your wealth there? Then we can all be sure your gains are truly yours, and so nobody will mind you hoarding them.
This is nothing but double taxation. Ie highway robbery.
But yes, when a rich person gives their money to another person, that other person now has to pay tax. An estate, gift, or income tax.
Many rich people pay their employees, some don't; wage theft is very popular, as are other forms of labor exploitation. But an educated, healthy, available labor force is a very expensive asset to create. We all invest in creating that through things like paying for schools, health care, and raising children. One of the ways we pay for creating that asset is taxes. Rich people, as the ones most benefiting from society, and also as the ones with the most spare money, should pay their fair share for that.
EDIT: the point of raising it is in the context of this discussion, we are talking about the very wealthy. A $15,000 gift to their children isn't very much of a transfer as a percentage. To hand off large amounts of wealth to the next generation, for sure the annual gift exclusion isn't nearly enough to avoid inheritance taxes.
I was under the impression there's a large exemption for inheritances under a few million and then it's still a number lower than income tax on the rest.
Philosophically, you don't own anything after you're dead. Someone else, alive, is getting income in the form of an inheritance.
In any case, in the US the estate tax and the gift tax are basically the same thing, so rich people can give the same millions to their kids either before or after they die and pay basically the same taxes: https://www.cbo.gov/publication/57272
Similarly, the rich person paid taxes and then their rich kids pay taxes on their inheritance.
No more double taxation, and everyone gets to do whatever they want with their post-tax income!
The reason they can build modern stuff is due to the work of billions of people networked in space and time (knowledge, processes & culture, tools, infrastructure) to which the "self-made rich person" has the extreme fortune to be able to build on (even today most people are born in places too far away to benefit equally from that network and are only able to access a tiny part of it, so no matter their own contribution they are lacking the base).
Tell me, why would a person whose accomplishments are ~99.99999% based on the work and accomplishments of others be allowed to monopolize it as if they were truly responsible for everything?
As far as I'm concerned the government should truly not be allowed to tax your entirely self-made mud hut disconnected from infrastructure in the middle of nowhere.
For all else, you benefit from gigantic network effects (in space: all other people alive making things, in time: everything we got from previous generations) and should pay your dues. Given that, even a very high tax rate especially after death is extremely generous. The descendants had even less to do with anything the person that sat in a perfect place in the human network accomplished by making use of their advantageous position (to be exact, zero). At most, their contribution is to be able to use said network very well - although it also happens a lot that they did so by preventing others from using it.
Wealth is the incentive for the wealth creation you're observing here.
In some cases it does make sense for employers to increase compensation. Especially when productivity is high. Usually productivity gains are a result of innovation, which is incentivized by the profit motive.
https://www.npr.org/2014/01/27/267145552/the-middle-class-to...
This just isn't true. I have entrepreneurs on both sides of family going back at least 3 generations. Many of them were happy just to create something and make a decent living.
As an example, look at Bob's Red Mill, a 500+ person company in Oregon. The owner recently turned the whole thing over to his employees: https://www.oregonlive.com/clackamascounty/2010/02/bobs_red_...
You could also look at worker-owned co-ops. In SF, Arizmendi is a very successful string of worker-owned bakeries: https://arizmendibakery.com/faq
Or take a look at the Zingerman's community of businesses in Ann Arbor, MI: https://www.zingermanscommunity.com/about-us/a-bit-of-zinger...
The founder, Ari Weinzweig very clearly doesn't give a shit about the profit incentive. I recommend his book, "A Lapsed Anarchist's Approach to Building a Great Business": https://www.zingermans.com/Product/zingermans-guide-to-good-...
I grant that part of corporate America's civic religion is pretending that greed is the only possible motivator for anything good. And maybe that's true for some people. But if you talk with actual entrepreneurs, especially ones outside the tech filter bubble, their true motivations are rarely about a chance at vast riches.
Keep in mind that death taxes may apply not only to what is inherited by family members, but charitable foundations created as well. Charity starts with the possibility of abundance.
That's definitely not true. The great bulk of people, who do the great bulk of the work of value creation, can't possibly be motivated by wealth, because definitionally they won't receive it.
There's also no reason to think that the ecommerce revolution wouldn't have happened without Bezos or some other person becoming a zillionaire. There are plenty of entrepreneurs who are happy as long as they get to make things happen and make decent money.
Absurd levels of wealth are an incentive for wealth concentration, not wealth creation. The creation of value would certainly happen without that. And generally happens better without it, which is why we have things like antimonopoly laws.
Ultimately, it's not a question of how deserving billionaires are (they obviously aren't). It's more a question of how to best advance the interests of our species as a whole.
Where do you see "two wrongs"? I don't understand this reply at all. I don't see the connection to what I actually wrote.
> Ultimately, it's not a question of how deserving billionaires are (they obviously aren't). It's more a question of how to best advance the interests of our species as a whole.
I agree, and I don't see any connection to what I wrote here either, meaning how this is supposed to be a contradiction to my point?
When I die and give my home to my kid that’s not a transaction that a family home going to family.
Or are you arguing that when a husband dies the wealth should be taxed before going to the surviving spouse?
Or if you pay for your kids education (say college - they’re an adult) should that money be taxed?
That's a ridiculous point, by the way. All money is taxed repeatedly. Hand it to a store. Sales tax. Report it as profit. Corporate tax. Pay it to employees. Income tax. Hand it to a different store... There's no "moral" calculus here. We tax economic activity. If you give money to someone else, be it for a candy bar or in an inheritance, that's economics and the apropriate place for government to take a cut is on something that sales linearly with the economy.
"Hey, that's already been taxed!" does have some intuitive appeal, but honestly I think that intuition comes from the game of Tag or something.
But money, being fungible, in constant circulation, and yielding assets and profits from re-investment, has many points at which it might feel fair to tax it.
It might not feel fair, but at least there's more there to discuss.
Same also goes for taxes on real property. My land had already been taxed long before I bought it.
Do you think that all of those taxes are also immoral?
The Crown Estate is not the personal property of the monarch, it's essentially just government assets. Who is the Crown Estate going to pay taxes to, itself?
Here is a better discussion of the details around the queen's estate tax exemption: https://www.townandcountrymag.com/society/money-and-power/a3...
Pretty ingenious way to allow "families to pass wealth from generation to generation, indefinitely, without estate taxes at each death". The UK should do something about that. I hear significant estate taxes are important to a democracy to prevent the rise of a noble class.
I'm curious if anyone knows how or why The Duchy of Lancaster[2] was not included in the The Crown Estate?
[1] https://www.bbc.com/news/explainers-57559653
[2] https://www.lancastercastle.com/history-heritage/duchy-of-la...
[3] https://www.standard.co.uk/insider/royals/queen-elizabeth-ne...
(and yes obviously the hereditary monarchy and peerages do not belong in the modern era let alone the 21st century, but changing that in a not especially democratic country is hard)
It isn’t some zero sum game, where there is some limited amount of wealth, and by them having it others must be destitute.
I’d be curious if those with several children feel differently than those with none. I love the idea of my sacrifices today one day benefitting my grandchildren’s’ grandchildren in a material way. I feel like if more people lived with the thoughts of how they can improve their own descendants lives over improving their own the world would be a better place.
If you disagree, you can demonstrate your commitment by giving me unlimited power of attorney. I'll use that to your assets and income to my accounts and I'll give you back whatever's truly best for you. I am obviously good, so you can trust me on this.
What is also true is there are those who are weak.
And everyone will have some little power at least, and some amount of weakness.
While Marx thinks it is only used to oppress, that is just what he would do with it. I’d say for every person there is an amount of power they can wield for good, and past that they will use it to oppress.
The most wicked can’t even use their smallest bits of power for good. The best of us at some point would start to use our power to oppress.
There is no neutral ground though, you will use your power (be it physical, emotional, sociological, spiritual), to oppress the weak, or to lift them up.
Because in order to have power in one area (e.g. you’re highly educated, speak well, or wealthy), there is someone else who must be weak (uneducated, stammers, or poor).
To say power is intrinsically bad, is to say being weak is intrinsically bad, because being weak means someone else has power over you. “blessed are the meek” is true, but that is because someone powerful took the side of the weak, and defends them.
The problem today is we have a ruling aristocracy, and they’re not noble and good, but oppressive and evil.
Tuberculosis is natural. Tooth decay is natural. If you believe what's natural is what's good, go hang out with people coughing their lungs out. Stop brushing your teeth. Refuse to take antibiotics. Have your next of kin let me know how long you survive in your immersion in utter facts of nature.
Similarly, if you think power over people is good, prove it. Send me all your money. Sign a power of attorney. I'm good, I promise.
(You also have a lot of fantasies about intrinsic goodness/badness. That may work in particularly Manichean novels involving wizards and whatnot. But please recognize that's the inside of your head leaking out, and not what's actually happening in the world.)
Power over people can be used for good, and can be used for evil.
I would give all my money to that which is good.
Where do you think goodness comes from? You said it is not from nature? So you believe things exist outside of the material world?
Those stories are the way we describe what some material thing is doing. They most certainly exist and not just in my head, they’re just not material.
A well-managed trust fund is, by definition, a conservative investment portfolio that only distributes a fraction of its value, and only to a chosen few heirs. A government spends its tax dollars, with a significant portion already going to welfare. Even the closest equivalent usage of tax dollars, sovereign wealth funds, are managed for distribution to the citizenry as a whole. Your premise is bunk.
I’d hope my grandchildren are so well off that they can go get a higher education and get a liberal arts degree for the love of learning. Study history, philosophy, sociology, these are all great fields of study, they just don’t pay well. That they could just be intellectuals and not laborers would be great. After a few generations of just being intellectuals or less if they live lavishly, they will have to return to labor, and that ok.
There is nothing wrong with folks like me getting an engineering degree because they want to work and make money, but it doesn’t seem like a bad desire to hope that your children will not have to labor because you did.
I want my children to be able to do what they want. However, I want to raise productive, functioning adults.
I wish people could study the liberal arts or sciences freely to expand knowledge, not for the sake of money. This is a privilege only provided to those whose parents leave them a large inheritance.
The reason that people have the idea that "unless you get paid to do something it isn’t worthwhile" is because getting paid for something is reasonable evidence that you're creating value for others. That's important to do if you will be consuming the value created by others. Children raised without that feedback loop can easily be not so functional, in that will focus on serving themselves, not others.
If you have enough money to fund things like socially beneficial research, then you should just fund that. The MacArthur Genius Grants are a good example of that. There's no particular reason to think that your particular children are the best ones to be doing that, especially if they've been raised in an environment where their wealth has let them avoid serving others.
Take a look at some of the recent "Who owns Britain" exposés, which looks at land ownership in Britain. Last I checked they weren't making any more land, and a huge percentage of British land is held by nobility who passed it down from the times of William the Conqueror. Am I supposed to think it "just" that someone never has to work a day in their life, while their tenant farmers toil to pay rent, because their great great ... great great grandaddy was friends with a French king?
Sure, early on in the system it's possible for it to be fairly competitive. You have a mix of responsible and irresponsible families passing down wealth, and the ones that do it best will retain their wealth the longest. But over time it becomes a very different game. Take a look through history; the stories it tells don't look good for the bulk of the working class.
It's one thing to be able to leave your wealth to your children, it's another thing to have a completely protected trust that is exempt taxes. The longer this runs, the less money forced back into the economy and through compounding interest it becomes impossible for a new set of "nobility" to reasonable ever achieve the same status.
It is a zero sum game, as there is effectively a limited amount of wealth. And the more it becomes centralized around a noble class the less everyone else has.
You can leave money to your children today, it's not like that's not possible. So I am not sure what you're on about. The loophole being discussed here is doing it free from taxes. Like Elon Musk won't need to shelter his kids kids kids from taxes on his billions. If you make enough money that can be true for you too. But yeah, you might need to teach your kids proper financial skills so that they don't blow through what you leave them so it reaches your grandchildren.
You can already setup a trust today for your kids. You can leave your kids shares in a brokerage account and that has some pretty solid tax advantages. There are a ton of ways to leave behind your wealth that doesn't require completely untaxed assets.
The robber barons you're thinking of lived a long time ago and very few of the wealthy today inherited their wealth from them. We should be more concerned about the robber barons walking around today and how our policies benefit so few winners and fosters income inequality.
It really worries me how a bunch of people in this forum promote marxist ideas, with absolutely zero first-hand knowledge of what ends up happening, and hint: it's not in public interest whatsoever. "Democracy" doesn't mean free-for-all.
The rule against perpetuities is what our legal system evolved to address this problem. It says that you can direct how property is used during your lifetime, and beyond that through the lifetime of someone who was living at the time you died. But that you cannot control how money and property is to be used beyond that point.
Another common estate in land is the leasehold estate. If I own some land in fee simple I can sell you a leasehold estate that runs for a specific time period. During that time period it is essentially your land. When the leasehold ends my fee simple ownership resumes.
Another common estate is the life estate. This is a lot like a leasehold except that rather than being for some fixed time period it is for the life of someone. They were common in wills (I have no idea if they still are common), typically with someone leaving their estate to the widow for life with the remainder (the term for what comes after any finite estates like life estates end) to the eldest son or split among their children or some such.
Note that in the above example of creating a life estate, the dead person is able to control both what happens to their land immediately (their widow gets it) and what happens in the future when their widow dies.
It didn't end there. Let's say you were an army veteran and very religious. You could in your will give your widow a life estate, then your oldest direct male descendant an estate that lasts until he dies or until one of your direct descendants reaches the rank of Captain in the army or becomes a priest or nun in which case the first such direct descendant gets a life estate, with the remainder to their oldest child if they have one else to be sold at auction with the proceeds split equally among your living direct descendants.
Lord Montague could stick conditions in the estates he left in his will so that anyone who came into possession of the Montague lands after he died, no matter how long after, would lose their estate if they married a Capulet or descended from a Capulet.
In short if you owned a fee simple estate you could impose nearly arbitrary conditions on who could possess the land after you and what they could do with that could in theory restrict the land forever afterwards.
This makes it hard to put land to its economically best use. A seller cannot sell more than they have. I'm not going buy or lease your land to build my factory on, or build a housing development, or do anything that requires a significant investment if I have to worry that some third cousin of yours will marry a doctor and trigger some condition in the will of some ancestor of yours that died 200 years ago that gives them the land. Maybe my lawyers and genealogists can identify all people that might be beneficiaries of such un-triggered conditions and get them all to sell or lease me the land--but often even that won't be enough because some such people might have yet to be born.
Governments recognized that it is good for land to generally be freely sellable and buyable, and that the living should be able to fully use the land. And thus we got rules to limit the ability of dead people to place far reaching long lasting limits on what happened to their land after they died.
The rule against perpetuities strikes a quite reasonable balance between keeping land reasonably buyable and sellable with minimal restrictions on what the living can do with the land and giving people some say in how their land is inherited.
The classic statement of the rule is:
> No interest in land is good unless it must vest, if at all, not later than 21 years after some life in being at the time the interest was created.
This basically gives you the current generation plus 21 years of control over what happens to your land. It is enough that you can specify conditions involving grandchildren that do not yet exist, or even conditions on adult grandchildren that do not yet exist because if any such come into existenc...
To be honest though there’s a lot of fear mongering around the estate tax causing a family to lose their farm.
Democrats love estate taxes because small businesses and farms don’t have the political power to fight them off.
You don't think they like estate taxes since a fundamental building block of progressive thought is to dismantle nobility? You're hiding behind farmers when it's really centa-millionaires and billionaires that are the largest opponents of estate taxes.
They have no income tax but do sales taxes.
taxes should be simple, continuous and highly progressive. if it were so, most americans (90+%) would enjoy the same or lower tax rates with little change in public services and potentially a boost in infrastructure. we’re highly inefficient and there’s little political will to change that.
Being against taxes on already-taxed monies benefits self-made families as well.
Provided that old money can lose money by squandering inherited wealth, the two positions are very logical and to the benefit of society.
The issue here that no one seems to mention is that aristocracies should not be able to leverage the state to protect their wealth.
Old money in france and italy is sustained due to protection of state. The US rich, due to the growth of the growth of the state apparatus, having increasing ability use the state to shield aristorcracy here.
Quick examples:
- TARP bailouts - Neverending wars to benefit defense industry - Biden admin reversing hospital pricing transparency executive order.[1] - All the newly minted 'czars' - Disney IP laws - Antitrust failures in the last 30 years
I don't think anyone has a problem woth the rich if they get there by playing by the same rules everyone else plays by.
However when you see major rich politicians on TV, dining without masks, while telling everyone else this is prohibited, you know the problem is not the rich, but the rule-makers
Edit: added source per request
[1]https://www.natlawreview.com/article/cms-backs-price-transpa...
Source?
All I can find is that the admin plans to do the exact opposite and actually enforce the rule that was in place but no one has been following (because it wasn't enforced): https://www.washingtonpost.com/politics/2021/07/12/health-20...
The CMS final rule was only issued after :
https://www.natlawreview.com/article/cms-backs-price-transpa...
First paragraph:
On August 2, 2021, the Centers for Medicare and Medicaid Services (“CMS”) issued its hospital inpatient prospective payment system (“IPPS”) final rule (“Final Rule”) for fiscal year 2022. In addition to a number of other changes, the Final Rule **repeals the price transparency requirement** for hospitals, discussed in our September 2, 2020 blog post, obligating hospitals to report certain contract terms with Medicare Advantage (“MA”) plans for cost reporting periods ending on or after January 1, 2021.
If you've never visited, give it a try. Flat lands, no pollution, little traffic, friendly people who put a great value on freedom. Truly a great state.
Mount Rushmore is in South Dakota, as is the Corn Palace and Wall Drug. (If you want to study ingenuity in business, have a look at Wall Drug.)
Just don't visit in the winter months. One of the few things that will give you a negative impression of the state.
I wasn't aware of Wall Drug [0].
From their homepage:
Wall Drug has a rich history in the state of South Dakota. Nestled in the city of Wall in the western part of the state, Wall Drug has grown from its humble beginnings in 1931 to a thriving oasis. Wall Drug offers dining, activities, gifts and souvenirs, visitor information and, of course, free ice water. Many road-worn travelers stop at Wall Drug and leave awake and refreshed, just like they did more than 80 years ago.
[0]: https://www.walldrug.com/