It seems like one of the least evil taxes to me. $3.5 million or more worth of assets are absolutely irrelevant to a corpse. So the great evil is that the descendants of someone who amassed a great fortune only get $1.5+ million that they did absolutely nothing to earn, after presumably having every conceivable advantage growing up? To me that seems much less evil than taking a fraction of what a living person actually worked to earn and might still need.
Of course, I usually reserve the word "evil" for killing, raping, arson, dragons, Satan and that kind of thing. Taxes seem to have a much less dramatic effect on their victims.
This looks at the tax from the perspective of those who will inherit, and concludes that since spoiled kids don't deserve big inheritances, the estate tax is fair, just and moral. But what about where the money goes? Does the government deserve it? I don't think so. One might be able to make an argument that the money should go to society, because the system is what made the creation of wealth possible. But that's not what the estate tax does, the estate tax takes the money to the government. Arguing that spoiled kids have not earned it is a lot easier than arguing that the government is deserving.
What about looking at the tax from the perspective of the individual who created the wealth? What the tax does is encumber the creator of the wealth from deploying it as he/she sees fit. Why do we want to encumber creators of wealth?
TO CLARIFY: the gift taxes that are part of the estate tax complex encumber creators, not just corpses. If you remove the gift tax, I have no problem with the estate tax because nobody would ever pay it.
How can a corpse deploy wealth? If they wanted to do something with that wealth, which I agree they have the right to do, wouldn't it make sense to do it while they still have the ability to have thoughts?
It makes more sense to me for the government to get it, because that reduces the need for them to take wealth from people who are alive and might be able to use their wealth.
> "Arguing that spoiled kids have not earned it is a lot easier than arguing that the government is deserving."
Isn't "the government is deserving" the crux of the Gates/Buffett argument? That government has provided them, as wealthy people, far greater services than the average person? (In the form of providing safety, protecting property, supplying an educated workforce, enforcing market rules, etc)
The general idea being that you simply can't become fabulously wealthy via anything short of barbarism without government, so the government does deserve something more to further these services that they're providing?
If Gates/Buffett really believe that the government is deserving, why have they arranged their affairs to pay as little tax as possible? Including (but not limited to) essentially zero estate tax?
Forgive me if I'm not convinced by an argument that suggests that others should be compelled to do something the proponents of the argument relentlessly avoid.
To be fair, I think their argument is more accurately phrased: the government is more deserving than the heirs (after a reasonable threshold, natch). Or, more generally, society is more deserving.
I don't see a logical conflict in their preference for private charity over government redistribution.
Honestly, I don't think any proponent of the estate tax would mind if the practical result of a high estate tax was that the rich just gifted their estates to private charity to spite the government. Government is just the only group with a sufficient cudgel to enforce the practice and sufficient reach to ensure that otherwise-undirected estates do give back to society.
Why want to encumber an aristocracy, not creators of wealth. The creators in question are dead. Thomas Paine covers this in his pamhlet _Rights of Man_.
Sure. Until we have a better organization, whose primary concern is the overall health of society, to distribute it.
Government is certainly a flawed organization. But we currently trust them with all our other tax dollars. I don't see any reason to hold estate tax dollars to a different standard than any other government revenue.
Except that deserving isn't a binary attribute. So pointing out the government is undeserving isn't sufficient.
My point is that we as a society have entrusted government specifically with the job of redistributing wealth to better society and that makes them the better of bad choices.
It may be true the government does not redistribute wealth in a way that provides value to the purpose of an estate tax. I would hardly call it evil though. If other aspects of society and government were managed well, an estate tax might be a valuable part of the machinery.
Without regard to the efficiency and quality of government, when you die, "your" estate gets taxed 100%, not 55%. This happens without government intervention. I know many high net-worth people that get upset about estate taxes. I know many that don't care. The key difference between these two types is the later accepts you can't take it with you. The former is still holding on to some feeling that they can control things after they die.
I assume you agree that there's some level of necessary taxation? You then need to make an argument that people who receive money from an inheritance don't deserve to have that income taxed, whereas an entrepreneur who builds a company and sells it to Google does.
The argument is that they already own it. My kids have rooms in my house now. You are saying they should have to give money to other people (i.e., be taxed) for those rooms when I die? They are getting food and education costs based on the profits from my company- I die so they must be taxed on that on top of the income tax? It's not income from an inheritance, it's a continuation of what they are already getting tax free. My death shouldn't have anything to do with it.
They're already benefiting from the money you've earned, but that doesn't mean they own it in any meaningful way. You have complete control over your assets, you can refuse to support your kids and they can't head to Vegas and gamble it away.
As a general rule we tax assets when they change ownership, maybe because the benefit to the recipient cushions the pain of giving away part of it to other people.
Just to be clear, the tax is on a transfer of money, not on the money itself. If you transfer only $10 million to your family, the tax will only apply to that $10 million in transfer. Similarly, if you gift them $10 million while they are alive, that money will be subject to taxes.
Of course, I usually reserve the word "evil" for killing, raping, arson, dragons, Satan and that kind of thing. Taxes seem to have a much less dramatic effect on their victims.