This week, I’ve asked readers to chime in on the Bush tax cuts. This guest post is courtesy of Vinny Kochetta (for more on the topic, see the original post):
I do not see an ethical basis for the estate/death tax.
If a bazillionaire chooses to be frugal and pass his fortune to a child, why should the government take half of that? Even if a half a bazillion is a lot of money… why would this be reduced to a quarter of a bazillion if that child chose to pass on the fortune?
This confiscation is morally reprehensible and flies in the face of property rights given by God when He said, “Thou shall not steal”.
I am not a bazillionaire and don’t plan to be. But I AM a businessman. I worked my way through college, trying to save and spend wisely. I later worked for a small company which paid below market wages in the hopes of growing with this business.
Eventually, I had an opportunity to purchase a portion of this company that I was committed to. Of course, I had to rely heavily on financing to obtain a part of this S Corp, so a significant part of the company profits is going to pay the bank and the US Treasury.
I have no complaints there.
After 15 years of working for the company and then 15 years of working for the bank, I might eventually taste some of the fruit of my labors. I wouldn’t anticipate changing my lifestyle much, so hopefully, some cash will accumulate. After years of diligence and dedication AND tax paying, why would the government take a significant portion of it should I not choose to spend it all (or all but $1MM)?
I have “blue collar” roots and have struggled to be successful. All during my life I have been conscious of those less fortunate than me and have supported charities easily three times the national average, so I’m not selfish or unaware of the plight of the poor.
I get angry thinking that anyone else would claim a right to my after-tax earnings!
There is no good reason to tax estates if those amounts were received or earned legally and I call for an end to the estate tax entirely. Keeping the Bush tax cut in place will be a step in the right direction.
Very good points. I wish more people in this country worked and thought like you. Our government might not be currently spending our children’s children’s life savings (and then “giving” it back to them in the form of highly regulated grants) if that were the case.
Our government is currently running a huge budget deficit, so we either need to (1) increase revenue or (2) cut spending. If you want to do away with the estate tax, that’s fine (I’d like to as well, for different reasons), but how (specifically) would you increase revenue to make up for the revenue lost from having no estate tax? Presumably you have some ideas for increasing revenue that aren’t “morally reprehensible.” Or, if you don’t want to increase revenue, what specific spending programs would you cut?
Most wealthy people have lawyers who help them find ways around the estate tax. One common method is to purchase large life insurance policies that name your heirs that you wish to have the money. One estate that got heavily taxed was the early death of JFK Jr. – he evidently had not expected to need an estate plan yet and his estate got caught and ended up paying a lot of taxes. We should all be like George Steinbrenner and die on year with no estate tax. He could not had planned it better.
If taxing a person’s estate is morally reprehensible, why is taxing income OK? Why is “being frugal to pass your fortune to your child” any more desirable than working hard to earn income in the first place?
I am pretty sure “”property rights given by God when He said, “Thou shall not steal”” would not stand up in a court of law as a reason for the current laws regarding real property. God mention what classes of property is not stealable. Is it ok to steal to feed a hungry child or perhaps the death of that child is moral? As an athiest myself does that mean I need to return all my deeds and silverware? Or perhaps the ancient greek god of Real Estate got in a fight with the god of consumables and that is how we got the trailer park?
So whose morals should we all use? I mean it’s OK to tax the food I buy to feed my kids, but not OK to tax my estate?
Also if you are so concerned where your money is going after you are dead why don’t you give it to them now. A good education, health care, opportunities to learn and work. Maybe in the long run the government is looking out for all the poor shiftless useless trust fund babies by making them use there boarding school educations to make good of themselves. Pull themselves up by there boot straps just like you say you did.
Also the complete lack of estate tax does one thing for sure. Creates a never ending aristocracy of money in America. You think it is hard to get wealth now. You think that the disparity between the haves and have nots is a lot now. Just wait for 2 or 3 generations of no estate tax. We have already had a George 1 and 2. Wait till we lurch towards oligarchy and monarchy where the very few have all and we get the pittance.
How would you feel about a simple, flat estate tax that was “unshelterable”? In other words, everyone, no matter what your income or what the net worth of the estate you inherit paid a simply 5-10% tax!
AMiller, you raise some valid points as well. I don’t think any of those items should be taxed, although I recognize that government does have legitimate expenses. I do not view extended wars, social security, medicare, medicaid, &c. as legitimate. The rights to “life, liberty and the pursuit of happiness” would include the “right to fail.”
Not everyone in the “lower class” are any more hard-working than your view of the “trust fund babies.” If the upper class is so lazy and shiftless because they inherited money, you have nothing to worry about. Their fortune will be gone in one or two generations, and it will be (unintentionally) blown on creating jobs for those with less money. I know a couple of these people.
For reference, I live alone and spent less than the federal poverty level last year and still managed to span half of the country between various trips. Both the “rich” and “poor” are careless with their money.