This page has been archived and commenting is disabled.
Death and Taxes
This article originally appeared in The Daily Capitalist.
I've been meaning to write a major piece on the inheritance/estate/death tax for quite a while, but until then I wish to share some brief thoughts on it since the topic is front and center in the current tax debate in Congress.
First some background. The inheritance/estate/death tax came into being in modern times by the Brits in order to break up the large landed estates held by the leftover royalty. They really hated these families who had gathered huge estates from as far back as feudal times. The socialist Labor Party made class warfare a foundation of their party. After the nobles were hit, then anyone with money was their target in their goal of socialist leveling.
That great regressive president, Woodrow Wilson had such a tax passed in the US in 1916. Wilson was a "Progressive" and basically believed in social engineering. The concept behind the law had nothing to do with feudal estates, but more with class warfare, the enmity that demagogues stir up against the "rich" among needy voters.
The ostensible reason that Wilson had for the law was that "concentrated wealth" in his version of what capitalism should be was bad for America. There is no evidence, empirically or theoretically, that "concentrated wealth" is harmful to the economy. You hear this argument anew with people like Bill Gates, Sr. who has no clue what he is talking about. But he sure "feels" strongly about it.
In other words, they say, without the tax financial power is concentrated in the hands of the rich whose interests are obviously adverse to "society's" interests. Somehow they will use that financial power to gain economic and political advantage. What a crock. If that were the case then, every successful institution should be stripped of wealth in order to protect society from their harmful effects.
The other reason is, they wish to control the way you raise your children as part of a social experiment. Such inherited wealth is bad for your kids because they won't work hard. Instead, the State has a duty to step in and stop you from making decisions that they believe are socially harmful -- to your kids. And we can't have that.
The real reason for the tax is class enmity. It is an ancient view of wealth that equates entrepreneurial success with theft. Which it was in pre-capitalistic societies through feudal and royal privilege and government-created monopolies. Today in free market1 capitalist societies, wealth is created through the entrepreneurial process. Businesses don't steal your money, they earn it. But old ideas, like stubborn bacteria, are hard to kill.
Today there is another idea floating around and that "we can't afford" to "cut" the estate tax and give "the rich money." In other words they are saying it's OK to tax the "rich" because "we" (i.e., the government) need it. Which is another way of saying that "we have wasted the taxpayers' money because of our foolish and wasteful spending and don't care where we get the money as long as we get it. Screw the rich." As I heard on a news report the other night, politicians have been using the argument that we need this money to balance the budget for the past 50 years and they haven't been fiscally responsible yet.
One last thought. If you think about the theory of taxation, almost all major taxes are based on some economic event: earning money, selling something at a profit, paying dividends or interest. So when has death become an economic event? It isn't and that's why it doesn't make any economic sense (assuming any tax makes economic sense). You work a lifetime to build a business and you've become successful and wealthy. You have been paying taxes on earnings, profits, and gains over the years and now they want to take a big chunk of your wealth just because you died. It's just theft. How is that morally justifiable?
1I'm not talking about current forms of crony capitalism such as exist in our financial markets which has resulted from government interference and manipulation. Free market capitalism is something else entirely.
»
- advertisements -
Dead on, AH, dead on. Wake up, people!
Taxes on labor is slavery. Taxes on product is theft. Taxes on Interest is Theft. The only tax that is justifyable is tax on land.
Henry George.
Curious that you did not explain why taxing land is justified. Is your copy of the class warfare script missing that page?
Windemup
In a word, we reject all legislation, all authority, and all privileged, licensed, official, and legal influence, even though arising from universal suffrage, convinced that it can turn only to the advantage of a dominant minority of exploiters against the interests of the immense majority in subjection to them. --Mikhail Bakunin, God and the State
All I know for sure is that estate taxes have been fucking small farmers for years now and have been one of the major enablers to corporate consolidation of farmland which has led to the joys of petrochemical ag, terminator seeds, genetic pollution of stable legacy strains in all sorts of crops, production and market dominance of ADM, Monsanto et al. From that standpoint at least they suck completely.
Econophile, you are complete fucking idiot. You could not have made this more clear than with this piece of Faux news talking point bull shit.
I thank you. Since you have made it so clear to me that you are this much of an idiot, you have saved me time from ever reading anything that you write in the future.
Later, dumb fuck.
Thanks!
So when the person on the more poor end of the scale dies; and whom also has barely anything to his name gets taxed in death and his family has to spend more of their own money than was left after the tax just to bury him/her, this is somehow morally acceptable? fuck that shit! and if you think that the death tax isn't some way to perform the exact opposite of accumulation of "wealth and estate" for the rich without alowing those who've lived and tried to amass "something" to give their kids a kick-start to a better life.. then fuck you too.
They are going to raise all sorts of taxes on the middle class and steal 40-years of FICA taxes you fucking idiot to reduce deficits.
You're a little late to worry about that shit now, don't ya think? maybe we should have stopped or rather our parents and grand-parents should have put a stop to the social security scam. I'm for ending that shit too. But what the fuck does them raising taxes and stealing 40 years of FICA have to do with my post that supports preventing the less rich from having their proportionate percentage of their estate STOLEN?
The rich people that you hate so much will just stay rich in proportion ANY WAY. Some dude with 10 million in estate is still going to have PLENTY of cash to spread to his family to make sure his family remains rich. This is all bullshit. The estate tax, IMO, keeps people from amassing ANY wealth at the lower "tiers of the class system" while ensuring that the richer people can amass and allow their inheritance to give their kids a substantially better chance in the system. When you reach a certain level of wealth, your chances level off effectively.. taxing us poor bastards that are trying to climb that high is fucking evil.
Finally, they already reached into your bag and stole your epic amount of social security. They stole yours, mine and everyone elses and replaced them with IOU's. So it's not that they're "going to".. they already have.. wake me up when people get mad enough and the lead starts flying, ok?
another idiot shilling for the ultra-rich. They love people like you. Ignorant populists.
http://www.businessweek.com/smallbiz/content/dec2010/sb20101216_471796.htm
"The number of people who must worry about estate taxes, already tiny, would shrink to less than 0.2 percent of the population, estimates Richard Behrendt, senior estate planner at Robert W. Baird & Co. In 2009, when the exemption was $3.5 million, 14,713 people had fortunes large enough to file taxable estate returns, according to the IRS. Just 4,296 of those people had estates of $5 million or larger. Compare that with the 2.47 million Americans who died in 2008, according to the most recent data from the Centers for Disease Control and Prevention."
Oh stop whining. This has nothing to do with RICH. It has to do with morality. Apparently you're not rich, nor am I; but I think that if I ever did get rich, I would pretty much tell everyone who wanted a piece of my hard earned fortune to piss in their hat. I earned it, I worked for it and then you want to take a fairly large sized chunk of it because I fucking died? FOR REAL!!?? whaaa, whaa.. the rich have money and I don't.. and they get to keep it and give it to their kids when they die, and I get none of it.. whaa whaaa.. that's what you sound like, you ass-hat.
What took you so long to figure this out? This article is full of class warfare, hate and shit, that it can't even pass for propaganda. Look the guy who calls himself Econophile hasn't figured out that all wealth flows from the bottom---the rich suck from the bottom. All economic systems are never in equilibrium because of wealth accumulation, that is, why we have depressions and revolutions to bring the system into equilibrium. Progressive taxation and estate taxes are TOOLS that be can used to bring the economy into equilibrium.
Wealth "flows" from the bottom? Do you understand what the role of a capitalist even is in the productive process? The owners of land, labor, and capital goods are paid in advance of the product they are supposed to produce. They are paid based upon the discounted marginal value product of what they are supposed to produce. It is discounted because they are paid in advance while the "capitalist" must wait to sell that product and hopefully (see, he is the one taking the risk) attain a greater price and thus profit from it. Take the capitalist pig out of the equation. You have a productive process that takes 3 years. Those in the higher stages of production, are they going to wait 36 months to get paid? How about just 30? I don't think so, I'd think they'd starve. Then again, we could just go back to primitive means of production with a horrible standard of living and a ridiculously small output of goods/services. You have no idea how wealth/production are created and exist.
Taxes bring about equilibrium? Who sent you to this site, the US Treasury office of Propaganda? Haha. Equilibrium gets reached when prices adjust accordingly to clear surpluses and reduce shortages. How does stealing money from people and giving it to an enterprise (government) who by its very nature cannot complete economic calculcation restore equilibrium? Yes, doing everything in the world to prevent prices from being where they should be is certainly going to bring about equilibrium! Moron.
The owners of labor, you say, why, is that just a bit of your inner fuedal lord showing?
The conceptual framework for economics that you're currently learning about in your sophomore econ class has no bearing on what has been driving this economy for the last 30 years. This is end-stage Baroque and Rococo economic depravity, which has little to do with capitalism or socialism or any other 'ism' you can rail against or for. And don't wax libertarian about "The State" and how evil and confiscatory it is. The state is US, or was us, until good capitalists figured out how to LBO it. Now there aren't too many risks for those noble high-rolling capitalists.
Really?
In order to bring the economic system into equilibrium, debt has to be defaulted. That's all! Yes, economics is very simple. Who is preventing this from happening? The wealthy elites who accumulated all the wealth during the preceding business cycle and now use government coercion to shore up the debt that they hold. Our elected officials can't even garner enough votes to claw back accumulated wealth from 6,600 top estates in US. The people in government are power elites that move in business, military and government circles.
"Businesses don't steal your money, they earn it."
Bankers earn money the old fashioned way, they steal it.
Banking is NOT the only type of business. Had government not stepped in with our money to rescue them, and instead prosecuted the fraud, this particular set of thieves would be bankrupt, and/or in jail.
So the entertainment industry's constant expansion of copyright to infinity and endless crusade against independents and people who just want to know how their property (electronic devices, software, etc) works is an honest business model? What about Monsanto and its genetically engineered terminator seeds, to say nothing of the countless lawsuits against small farmers for accidental exposure? Are telecommmunications companies that lobby for local monopolies and comply with government spying on citizens another pillar of integrity in your warped worldview too?
You're pretending that economic legislation is anything other than "crony capitalism". Regardless of when it occurs. Some conditions are more conducive to taking advantage of others.
There is no simple way to legislate kindness and consideration for those who are truly needy. You either have it, or you don't.
But these are some nice excuses.
The US and UK have estate taxes
Austrailia and Canada do not.
Guess which pair are more "equal".
I liked this article. The central idea - that an estate tax is government theft - was expressed simply and clearly.
Typical socialist axiom - there is moral justification in taking from someone else but just not me.
However, I continue to see eery parallels between 1790 France and 2010 United States and we all know how that ended.
Jim Billy Bob J...
"Typical socialist axiom - there is moral justification in taking from someone else but just not me."
I love it when dipshits spew nonsense.
Socialists would say everything should be taken from everyone equally. Shared burden for the greater good of all.
Your quote actually relates to CAPITALISTS!
Ok you may just be drunk or on crack when you posted, but I think most people who meet you think you are a dipshit, so you may not have meant to spew that ignorance.
I'm no Marxist by any means, but I simply cannot believe the Herculean efforts being put forth to rationalize creating/continuing the inherited aristocracy that our founding fathers were so dead set against that they specifically forbade them in the constitution.
Now that it looks like the gay marriage ship will sail I'd be surprised if attempts aren't made to use this as a legal vehicle to shift assets around and out of reach of government hands. Sort of like that movie about the guy who pretends to be gay so he can get his friend's health insurance benefits from work - but on a much bigger scale.
Maybe not...but when you take sex difference out of the equation I think the chances go up that the two parties involved would be willing to enter into marriage primarily as a legal conspiracy. If the right people got married/divorced at the right times could you pass the family farm from person A to person B and escape taxes? I don't see why not but the IRS does have some powers to bust you for actions they deem as pre-meditated tax avoidance. In any case I think the envelope has yet to be pushed in this regard.
Hell, how much money would have to be at stake to overcome your reservations about being legally married to another person of the same sex?
Uh, well, maybe not if the IRS demanded proof of consummation.....
Mercury
"Now that it looks like the gay marriage ship will sail I'd be surprised if attempts aren't made to use this as a legal vehicle to shift assets around and out of reach of government hands."
In some ways it already has. I have a BIL undergoing some legal issues in FLA. He was advised by his attorneyto get married to protect his assets from siezure. It seems Gay couples frequently do this. Something about FLA can't sieze a shared account or properties when one suffers a financial issue.
I wish I paid more attention but he is an asshole and I really don't give a shit what happens to him.
"Uh, well, maybe not if the IRS demanded proof of consummation....."
In Turkey, gays are outright banned from military service. Turkey also has mandatory conscription.
For an individual to avoid service due to homosexuality, they must among other things, provide photographic or video evidence of being penetrated by a man. Smiling, or otherwise showing a state of ecstasy is strongly encouraged.
The IRS can bust you even for an INTENTION to avoid taxes (after your asset afre frozen you can't defend your self anyway)
silver melts ice, dude.
I own Big Farm and die, leaving it to my wife.
Normally, when she dies, the estate taxes are calculated, but, wife marries younger guy and he gets farm when she dies.
Now he marries a younger woman and she gets farm when he dies, etc. etc. etc.
Just have to rock that cradle of love.
After reading some of the comments I can only come to the conclusion we have a long way to go in educating what freedom from tyranny is.
Throughout a persons life one pays taxes on their earnings. In other words, for one to accumulate wealth and even have the opportunity to create an estate it must be done with after taxed earnings.
Tyranny is...coming after an inheritance that is nothing more than the after taxed savings of the deceased labor.
It was earned by the deceased and properly taxed. Now some would say it's proper to tax it yet again? This is double taxation in it's purest form.
To grant the state the right via precedent to do this is to allow them to pluck the pennies from a dead persons eyes, rich & poor alike...it's grave robbery.
I hereby call on everyone who advocates for this injustice to turn in 35% of their gold & silver to the government in lieu of an "estate tax"...because that is exactly why you are holding gold & silver now.
Fucking envy filled hypocrites.
nmewn - very well spoken, sir. When I see a sucessful farm fucked over with this nonsense, I want to do damage .........
nmewn - very well spoken, sir. When I see a sucessful farm fucked over with this nonsense, I want to do damage .........
nmewn
"Juridically they are both equal [the worker and capitalist]; but economically the worker is the serf of the capitalist . . . thereby the worker sells his person and his liberty for a given time. The worker is in the position of a serf because this terrible threat of starvation which daily hangs over his head and over his family, will force him to accept any conditions imposed by the gainful calculations of the capitalist, the industrialist, the employer. . . .The worker always has the right to leave his employer, but has he the means to do so? No, he does it in order to sell himself to another employer. He is driven to it by the same hunger which forces him to sell himself to the first employer. Thus the worker's liberty . . . is only a theoretical freedom, lacking any means for its possible realisation, and consequently it is only a fictitious liberty, an utter falsehood. The truth is that the whole life of the worker is simply a continuous and dismaying succession of terms of serfdom -- voluntary from the juridical point of view but compulsory from an economic sense -- broken up by momentarily brief interludes of freedom accompanied by starvation; in other words, it is real slavery." -Bakunin
Gully,
You knew where I was going to tell you to stick your Marxist on again/off again anarchist bullshit before you ever posted to me...so why did you bother?
In your anarchist utopia you can't lock yourself in the bathroom (foregoing the protection of your family) and call 911 and wait for the cavalry.
Likewise, in your workers paradise of Marxism the state would be the one kicking in your front door should you have the temerity to keep even one dime more that you earned for your hungry family or a simple luxury.
In short...fuck you.
I always enjoy watching fascist fucks like you embarass yourselves. Why are you taking up space in our terrible workers paradise when you could be in your capitalist nirvana of Somalia? Get the fuck out of my country you Nazi cretin!
Brilliant intellectual response and rebuttal.
Ha. You're being sarcastic, right? I get it.
+1. Well said, awesome response to the Marxist drivel.
+1. There is no inheritance tax on Gold and Silver as it is passed on to the next generation...or taken to the grave.
After reading some of the comments I can only come to the conclusion we have a long way to go in educating what freedom from tyranny is.
Word. Actually, I imagine most who visit this site have a good sense of what tyranny is, they're just fine with it as long as they're on the side doing the tyrannizing.
Plucking money from dead persons eyes. They're dead, they sure don't care.
The state has to make money somehow. I'd rather they tax dead people's gifts to their descendents than a live man's income.
Why don't you get your hands out of other people's pockets. If I die and you take my shit it is stealing. And this government sure as hell doesn't deserve a single penny.
The states can get road money from tax on gas at the pump. Other than that, I can't think of a single thing I need the state for. And I can think of many other ways to handle road building other than taxation.
Water, sewer, garbage, power, gas, street lights, law enforcement, fire protection, roads, to name a few...
While these things could be provided by private enterprise, they are often more efficiently provided by the sate... I am likely to get junked for that statement but the implications of developing these are often beyond the scope and sequence of private capital.
I am not saying it can't be done but private delivery of these services has negative consequenses as well.
Maybe he enjoys delivering his own mail, creating and maintaining his own parks, running his own library.
All of you anti govt types might as well face it -- much was decided before you were born.
Lord K: Yes, I would like those things.
My first post here at Zerohedge and I get to use it to attack tyranny!
jm, may the descendents of you and those that think like you suffer the consequences of your beliefs 10x over! This I pray to my God!
The dead may not care but the living who would like to continue the family business care very much.