Politics

[MartyIrish]

The desire to pass wealth onto one's descendants ranks pretty far down the list of why people work hard and take on risk.


Couldn't be further from the truth. I work in financial and retirement planning. It's usually #1 or #2. Creating a legacy is a top priority. Right up there with "I don't want to run out of money".

And as a father myself, I absolutely am working hard to create a better life and future for my kids


Maybe you're taking the opinion from those that don't have kids? Of course that wouldn't be important to them. Hell, when I was in my 20's I didn't care about legacy...but now I'm in my 30's with two kids and it's absolutely a top priority.

 

[MartyIrish]

Those "tax efficient" planning methods exist due to carefully crafted loopholes in the IRC. If Congress got serious about this issue, it would close them. For instance, when assets are passed on at death, they receive a "step-up" in basis. So for example, if I bought some real estate 10 years ago for $100k which has since appreciated to $1m, I'd have to pay capital gains on the $900k in appreciated value were I to sell it. Similarly, if I gift it to someone before my death, the donee receives my tax basis ($100k) in it, so he'll eventually have to pay taxes on all that appreciated value himself. But if I instead transfer it to him at death, his basis in the property "steps up" to FMV ($1m), meaning the Feds don't see a dime from any of that appreciated value. The Feds lose out on $65b annually due to this rule alone, which is just one of a myriad of such loopholes.

Listen, I'm no fan of taxes, but they're a necessary evil. Since we've got to tax something, I'd much rather tax estates than just about anything else.



The "small" businesses and "family-owned" farms getting forced into liquidation by the estate tax is mostly a myth. As I mentioned above, only marital estates worth more than $11m are paying anything at all, and of that tiny portion of estates (0.14%), an even tinier amount are so illiquid as to cause major problems.

Excuse me if I don't feel bad for the feds "losing out"....The feds don't "lose out" on what was never theirs. With all due respect.

I agree that taxes are a necessary evil.

But they take in plenty of money (it'd be foolish to post the numbers, we all know), that's not the issue...the issue is that they cannot efficiently spend it. That's always been the issue.

Why is the solution "we need more" rather than "we need to be more efficient with what we take in"??

 

[pkt77242]

Excuse me if I don't feel bad for the feds "losing out"....The feds don't "lose out" on what was never theirs. With all due respect.

I agree that taxes are a necessary evil.

But they take in plenty of money (it'd be foolish to post the numbers, we all know), that's not the issue...the issue is that they cannot efficiently spend it. That's always been the issue.

Why is the solution "we need more" rather than "we need to be more efficient with what we take in"??

Because the truth is it needs to be both. That unfortunately is a hard truth for some conservatives and liberals to hear. If the conservatives want the massive military that we currently have and liberals want the robust social programs (medicare, SS, medicaid) then we need to be both more efficient with the money that we have and we need to take in more money. This is especially true if we ever want to tackle the deficit.

 

[Polish Leppy 22]

This should be posted in every high school classroom in America. Hell, college classrooms too.

25 Best Jobs in America for 2015 | Glassdoor Blog

 

[irishog77]

Because the truth is it needs to be both. That unfortunately is a hard truth for some conservatives and liberals to hear. If the conservatives want the massive military that we currently have and liberals want the robust social programs (medicare, SS, medicaid) then we need to be both more efficient with the money that we have and we need to take in more money. This is especially true if we ever want to tackle the deficit.

But more tax revenue doesn't necessarily mean higher tax rates. For a couple years under the Bush administration, overall income tax revenue increased, while the tax rate decreased. It's the same principle behind finding the price for Widgets that maximizes revenue.

Better efficiency alone within the government could and would increase overall revenue, all while not increasing taxes. Spend better, smarter, and wiser first. That is the responsible and prudent thing to do. It's what we teach our children. Why can't our government do this?

 

[GoIrish41]

Obama wants end of sequester, seeks $74B spending hike

 

[NOLAIrish]

Excuse me if I don't feel bad for the feds "losing out"....The feds don't "lose out" on what was never theirs. With all due respect.

I agree that taxes are a necessary evil.

But they take in plenty of money (it'd be foolish to post the numbers, we all know), that's not the issue...the issue is that they cannot efficiently spend it. That's always been the issue.

Why is the solution "we need more" rather than "we need to be more efficient with what we take in"??

As I read it, Whiskey's argument works equally well if you take the $65B and use it to simply rebase, say, the federal income tax, rather than to swell federal coffers. I think his underlying point is that many of the loopholes create undesirable incentives or distribute wealth in ways most of us would disagree with, not that raising taxes is in the public interest.

 

[Whiskeyjack]

Now we're talking about two different things here: (1) the incentive to earn and (2) the incentive to save/invest.

The incentive to earn as much as possible wouldn't be directly affected by an aggressive estate tax policy (I would argue the policy may indirectly limit the ability to earn). The incentive to save and invest those earnings would be affected.

I would still work and I would work hard. I enjoy producing (maybe I don't know any better) and I still have an incentive to earn. But I assure you my spending habits would change. There'd be minimal investment and a ton of frivolous spending.

With the cost of healthcare rising and people living longer than ever, simply saving enough to maintain a comfortable standard of living through death is out of reach for most people. In my view, the only credible argument against estate taxation is that certain hyper-productive people would stop producing in their twilight years without the possibility of growing their already significant estates. But when you compare that drawback to the negative consequences of other types of taxation, it's trivial.

I don't have kids so my opinion on the subject isn't worth much, but I am driven to produce, save and invest to make sure any children I may have will have a great chance to succeed and a financial head start. I would have assumed most people felt the same way but I could be way off.

This is all anecdotal of course, but I think that's pretty rare (though admirable). The vast majority of Americans aren't even able to save enough to sustain themselves through retirement, let alone to pass on a significant estate to their descendants.

That depends on how much of a chunk they're going to take. When I think aggressive, I think a large percentage (in excess of 50%) and no exemptions.

I'm not a proponent of any estate tax but I don't think the current rate, combined with the exemption, is aggressive.

$5.43m ($10.86 for couples) passes tax free at death. Every penny after that gets taxed at 40%, which most Americans would likely call "aggressive". The problem is that the exemption amount is so high that very few estates (1/700) get hit with it. I'd like to see them halve the exemption ($2.5m/ $5m) and close loop holes for circumventing it. No one's kids need to inherit $5m+ (in fact, I'd argue it's outright harmful to one's descendants to pass on such large sums without strings attached).

Couldn't be further from the truth. I work in financial and retirement planning. It's usually #1 or #2. Creating a legacy is a top priority. Right up there with "I don't want to run out of money".

Of course. As an attorney who does a lot of estate planning, I see the same thing. But there's a major selection bias among our clients because of the products we're selling. The average American is not concerned with "creating a legacy", and rightly so, since it's unlikely he'll even be able to support himself through death.

And as a father myself, I absolutely am working hard to create a better life and future for my kids

That's a far cry from "creating a legacy". Virtually every parent wants to help their children live better than he or she did, but that's accomplished primarily through education. Not through inheritance.

Excuse me if I don't feel bad for the feds "losing out"....The feds don't "lose out" on what was never theirs. With all due respect.

I agree that taxes are a necessary evil.

But they take in plenty of money (it'd be foolish to post the numbers, we all know), that's not the issue...the issue is that they cannot efficiently spend it. That's always been the issue.

Why is the solution "we need more" rather than "we need to be more efficient with what we take in"??

I've made no argument about increasing the estate tax while leaving all else untouched. I pointed out that virtually every major type of tax-- wealth, consumption, income--creates serious problems with market distortion. By comparison, the estate tax is: (1) progressive; (2) efficient; and (3) minimally distortive. So if we're talking about tax reform, I think it bears serious consideration.

 

[irishog77]

The problem is that the exemption amount is so high that very few estates (1/700) get hit with it. I'd like to see them halve the exemption ($2.5m/ $5m) and close loop holes for circumventing it. No one's kids need to inherit $5m+ (in fact, I'd argue it's outright harmful to one's descendants to pass on such large sums without strings attached).

I don't know much about estate planning. Is that number for all kids/heirs, or per child?

 

[Wild Bill]

$5.43m ($10.86 for couples) passes tax free at death. Every penny after that gets taxed at 40%, which most Americans would likely call "aggressive". The problem is that the exemption amount is so high that very few estates (1/700) get hit with it. I'd like to see them halve the exemption ($2.5m/ $5m) and close loop holes for circumventing it. No one's kids need to inherit $5m+ (in fact, I'd argue it's outright harmful to one's descendants to pass on such large sums without strings attached).

I hope my old man leaves me $5m so I can prove you wrong.

 

[Buster Bluth]

I don't know much about estate planning. Is that number for all kids/heirs, or per child?

99.9% sure it's per person.

 

[Ndaccountant]

$5.43m ($10.86 for couples) passes tax free at death. Every penny after that gets taxed at 40%, which most Americans would likely call "aggressive". The problem is that the exemption amount is so high that very few estates (1/700) get hit with it. I'd like to see them halve the exemption ($2.5m/ $5m) and close loop holes for circumventing it. No one's kids need to inherit $5m+ (in fact, I'd argue it's outright harmful to one's descendants to pass on such large sums without strings attached).

I bolded this part mainly to argue that the act of bequeathing has mutual benefits between two parties. We cannot lose focus as to why the estates are being passed in the first place (no one forces someone to accumulate wealth......they can give it away anyway they choose). There is a motive and ignoring that motive can be dangerous IMO.

At it's core, what is the point of the estate tax? Suppose that high wealth concentration has negative eect on welfare of the society. If this is the case, then the targeting principle would call for a tax hitting wealth concentration. The current estate tax is precisely that kind of a tax: it acts only those with high wealth. Why might one think that wealth concentration has negative economic consequences? For one thing, some of the world's worst governed countries exhibit high concentration of wealth. While correlation does not imply causality, it is at least consistent with the notion that concentration of wealth, i.e. the situation in which some individuals are \big" relative to the state, has an adverse effect on political process or constitutes a danger to democracy. This was one of the main arguments used when the estate tax was introduced in the U.S. But maybe this isn't the right view to take nor the correct question to ask.

Perhaps the most obvious question to ask is how estate taxation effects the overall size
of estates and wealth accumulation and concentration. As I pointed out yesterday in a study:

We reach the conclusion that the relative importance of self-made wealth in the twentieth century indeed followed a U-shaped pattern: it decreased in the 1930s and 1940s, and has been increasing since the 1970s. Reconciling it with the flat wealth concentration series in the past 20 years therefore requires that the relative wealth from inheritances has been declining, while self-made wealth has been increasing.

This makes sense if the extreme wealth today is created largely by entrepreneurs, which makes transferring wealth incredibly difficult as the wealth is a collection of assets that need to be maintained to be fruitful over time. Often times the heirs cannot do this and lack the ability to maintain the level of wealth.

So, the question is.......do you need an estate tax to protect against wealth concentration? The data is mixed, but is trending towards no.

 

[pkt77242]

But more tax revenue doesn't necessarily mean higher tax rates. For a couple years under the Bush administration, overall income tax revenue increased, while the tax rate decreased. It's the same principle behind finding the price for Widgets that maximizes revenue.

Better efficiency alone within the government could and would increase overall revenue, all while not increasing taxes. Spend better, smarter, and wiser first. That is the responsible and prudent thing to do. It's what we teach our children. Why can't our government do this?

This is where I think you are wrong. Yes we had higher revenue but not from the lower taxes. We had higher revenue because of lax credit standards that led to a housing bubble (Both mortgages and Home Equity loans are to blame) which as we found out, doesn't work very well and was built upon a house of cards which crumbled. People were spending money that they didn't have to buy things that they shouldn't have. There was actually a dip in revenue after the Bush Tax Cuts were passed, revenue didn't start increasing until the housing bubble happened.

 

[Whiskeyjack]

I don't know much about estate planning. Is that number for all kids/heirs, or per child?

Individuals are allowed to make $5.43m in transfers (both life-time and at death) tax free. Married couples can pass double that amount.

I bolded this part mainly to argue that the act of bequeathing has mutual benefits between two parties. We cannot lose focus as to why the estates are being passed in the first place (no one forces someone to accumulate wealth......they can give it away anyway they choose).

The estate and gift tax exemptions are unified, so not really. Individuals are allowed to gift up to $14k per person annually without incurring gift tax (which hits at the same rate as the "death" tax), but once you go over $14k to any individual in any taxable year, you're supposed to file a gift tax return and make note of it, which decreases the $5.43m exemption dollar for dollar. The tax is on transfers of wealth, regardless of when they occur. So unless you donate to a tax-exempt charity, "giving it away" doesn't fix anything.

So, the question is.......do you need an estate tax to protect against wealth concentration? The data is mixed, but is trending towards no.

Protecting against dangerous concentrations of wealth is just one reason why I'm advocating for the estate tax. I'm open to the idea that it may not be effective toward that end (or even necessary), but that doesn't change the fact that relative to other types of taxation, taxing estates is efficient and minimally distortive.

 

[woolybug25]

But more tax revenue doesn't necessarily mean higher tax rates. For a couple years under the Bush administration, overall income tax revenue increased, while the tax rate decreased. It's the same principle behind finding the price for Widgets that maximizes revenue.

Better efficiency alone within the government could and would increase overall revenue, all while not increasing taxes. Spend better, smarter, and wiser first. That is the responsible and prudent thing to do. It's what we teach our children. Why can't our government do this?

I understand your point, but I believe you are confusing revenue (top line) with net income (bottom line).

It's not like there is a supply and demand curve on taxation, as people don't get to choose whether or not to pay them. They pay the tax rate set by the government (revenue), then the government spends it (expense), what's leftover...err... ha, I mean the deficit... is the bottom line (net income). We can manage that bottom line better.

The only way we have year over year tax revenue growth is through higher rates, population growth or GDP increase. Those are the only revenue drivers of tax revenue.

 

[wizards8507]

It's not like there is a supply and demand curve on taxation...

There absolutely is. At a certain rate of taxation, top earners simply stop producing. I'm going to work much harder if I get to keep 95% of my money than if I get to keep 5% of my money over a certain level of earnings.

ETA: This is especially true (and dangerous) when we talk about capital gains taxes. Investors demand a certain return for their risk assumed. If that return is brought below market equilibrium because the feds start taking 35% of cap gains with no offset in the level of investment risk, investors are going to hold on to their money and seek alternatives.

Laffer curve - Wikipedia, the free encyclopedia

 

[Ndaccountant]

Individuals are allowed to make $5.43m in transfers (both life-time and at death) tax free. Married couples can pass double that amount.



The estate and gift tax exemptions are unified, so not really. Individuals are allowed to gift up to $14k per person annually without incurring gift tax (which hits at the same rate as the "death" tax), but once you go over $14k to any individual in any taxable year, you're supposed to file a gift tax return and make note of it, which decreases the $5.43m exemption dollar for dollar. The tax is on transfers of wealth, regardless of when they occur. So unless you donate to a tax-exempt charity, "giving it away" doesn't fix anything.



Protecting against dangerous concentrations of wealth is just one reason why I'm advocating for the estate tax. I'm open to the idea that it may not be effective toward that end (or even necessary), but that doesn't change the fact that relative to other types of taxation, taxing estates is efficient and minimally distortive.

Efficient in what regard? The data says that it is often a net loss for the federal government when factoring in the impacts to personal income tax rates and cost of enforcing compliance.

To my first point, it was not in the context of taxation but more towards the idea that they could spend the money over time in any form the choose. They could buy buildings, build monuments or simply wipe their ass with Woodrow Wilson's face. Point is, there is a reason they chose not to do those types of things and not factoring the intentions of their wealth concentration is ignoring an important component of how best to address it.

 

[wizards8507]

Protecting against dangerous concentrations of wealth is just one reason why I'm advocating for the estate tax. I'm open to the idea that it may not be effective toward that end (or even necessary), but that doesn't change the fact that relative to other types of taxation, taxing estates is efficient and minimally distortive.

You have no fundamental problem with creating, in essence, a "success cap" in this country?

 

[irishog77]

This is where I think you are wrong. Yes we had higher revenue but not from the lower taxes. We had higher revenue because of lax credit standards that led to a housing bubble (Both mortgages and Home Equity loans are to blame) which as we found out, doesn't work very well and was built upon a house of cards which crumbled. People were spending money that they didn't have to buy things that they shouldn't have. There was actually a dip in revenue after the Bush Tax Cuts were passed, revenue didn't start increasing until the housing bubble happened.

I understand your point, but I believe you are confusing revenue (top line) with net income (bottom line).

It's not like there is a supply and demand curve on taxation, as people don't get to choose whether or not to pay them. They pay the tax rate set by the government (revenue), then the government spends it (expense), what's leftover...err... ha, I mean the deficit... is the bottom line (net income). We can manage that bottom line better.

The only way we have year over year tax revenue growth is through higher rates, population growth or GDP increase. Those are the only revenue drivers of tax revenue.

There absolutely is. At a certain rate of taxation, top earners simply stop producing. I'm going to work much harder if I get to keep 95% of my money than if I get to keep 5% of my money over a certain level of earnings.

ETA: This is especially true (and dangerous) when we talk about capital gains taxes. Investors demand a certain return for their risk assumed. If that return is brought below market equilibrium because the feds start taking 35% of cap gains with no offset in the level of investment risk, investors are going to hold on to their money and seek alternatives.

Laffer curve - Wikipedia, the free encyclopedia

Wizards touched on it, but there is absolutely a "sweet-spot" for tax rates. At a certain point, citizens (customers) stop producing, throttle production, exploit achievable loop holes, strive to meet loop holes, and/or evade.

Hypothetically, if sales tax were 1% and income tax were 1%, virtually none of the above would happen as virtually all citizens would be fine paying those rates. Obviously it can't be 100% tax either. So the sweet spot is somewhere in the middle. Where? I'm not sure. But a higher tax rate does not necessarily equal more money for the government to spend.

 

[MartyIrish]

There absolutely is. At a certain rate of taxation, top earners simply stop producing. I'm going to work much harder if I get to keep 95% of my money than if I get to keep 5% of my money over a certain level of earnings.

ETA: This is especially true (and dangerous) when we talk about capital gains taxes. Investors demand a certain return for their risk assumed. If that return is brought below market equilibrium because the feds start taking 35% of cap gains with no offset in the level of investment risk, investors are going to hold on to their money and seek alternatives.

Laffer curve - Wikipedia, the free encyclopedia

Exactly. I see it all the time when my clients "delay" income until after the first of the year.

LOL

 

[Whiskeyjack]

Efficient in what regard? The data says that it is often a net loss for the federal government when factoring in the impacts to personal income tax rates and cost of enforcing compliance.

Efficient in that it hits very few estates (that the IRS tracks closely already), and only has to be enforced once against each. But more importantly, it's much less distortive on economic behavior than an annual tax or income, consumption or wealth. Those sorts of taxes do have massive effects on how people earn, spend and save.

To my first point, it was not in the context of taxation but more towards the idea that they could spend the money over time in any form the choose. They could buy buildings, build monuments or simply wipe their ass with Woodrow Wilson's face. Point is, there is a reason they chose not to do those types of things and not factoring the intentions of their wealth concentration is ignoring an important component of how best to address it.

In any given year, a wealthy entrepreneur is going to pay income tax on his salary, capital gains tax on the income generated by his investments, and various sales taxes on his spending. Why should a tax on the transfer of his wealth to others be considered fundamentally different from those first three categories?

You have no fundamental problem with creating, in essence, a "success cap" in this country?

There's no cap on how successful any individual can make himself in this country. There is (and should be) a cap on how wealthy he's able to make (non-charitable) others.

 

[wizards8507]

There's no cap on how successful any individual can make himself in this country. There is (and should be) a cap on how wealthy he's able to make (non-charitable) others.

So working towards my own comfort and enjoyment is legitimate but working towards the comfort and enjoyment of my progeny should be subject to regulation?

 

[MartyIrish]

With the cost of healthcare rising and people living longer than ever, simply saving enough to maintain a comfortable standard of living through death is out of reach for most people. In my view, the only credible argument against estate taxation is that certain hyper-productive people would stop producing in their twilight years without the possibility of growing their already significant estates. But when you compare that drawback to the negative consequences of other types of taxation, it's trivial.



This is all anecdotal of course, but I think that's pretty rare (though admirable). The vast majority of Americans aren't even able to save enough to sustain themselves through retirement, let alone to pass on a significant estate to their descendants.



$5.43m ($10.86 for couples) passes tax free at death. Every penny after that gets taxed at 40%, which most Americans would likely call "aggressive". The problem is that the exemption amount is so high that very few estates (1/700) get hit with it. I'd like to see them halve the exemption ($2.5m/ $5m) and close loop holes for circumventing it. No one's kids need to inherit $5m+ (in fact, I'd argue it's outright harmful to one's descendants to pass on such large sums without strings attached).

-Is that really for you and the rest of the nation to decide? Should I not be able to leave my children with what ever I want on my own terms?


Of course. As an attorney who does a lot of estate planning, I see the same thing. But there's a major selection bias among our clients because of the products we're selling. The average American is not concerned with "creating a legacy", and rightly so, since it's unlikely he'll even be able to support himself through death.

-You make a great point, but remember: we're talking about people with 5+ million. LOL. the MAIN objective is to create a legacy with my high net worth clients. For the average person, you're right, legacy isn't really an issue.

That's a far cry from "creating a legacy". Virtually every parent wants to help their children live better than he or she did, but that's accomplished primarily through education. Not through inheritance.

-And what funds that education? I'd argue inheritance. And with rising college costs, I shutter to think what I'll have to save to give my two kids a better life.

I've made no argument about increasing the estate tax while leaving all else untouched. I pointed out that virtually every major type of tax-- wealth, consumption, income--creates serious problems with market distortion. By comparison, the estate tax is: (1) progressive; (2) efficient; and (3) minimally distortive. So if we're talking about tax reform, I think it bears serious consideration.

And please don't think I'm being disrespectful. I'm just short on the keyboard. I'm new here and don't want to make waves.

 

[MartyIrish]

So working towards my own comfort and enjoyment is legitimate but working towards the comfort and enjoyment of my progeny should be subject to regulation?

However, if I left it to some homeless guy on the street, I'd be a hero

 

[Whiskeyjack]

So working towards my own comfort and enjoyment is legitimate but working towards the comfort and enjoyment of my progeny should be subject to regulation?

In short, yes; at least as far as American political philosophy is concerned. That's exactly why the estate tax was first implemented. This country was conceived as a meritocracy, where success and wealth would be distributed according to talent and diligence, not by accident of birth. Americans have always had a healthy distrust of nobility, which is enshrined in the Constitution's Emolument Clause:

No title of nobility shall be granted by the United States: and no person holding any office of profit or trust under them, shall, without the consent of the Congress, accept of any present, emolument, office, or title, of any kind whatever, from any king, prince, or foreign state.

Point being, if you earned it, Americans will congratulate you for your success. If you didn't earn it, your character is suspect. That's why such transfers are subject to stricter regulation.

 

[Whiskeyjack]

Is that really for you and the rest of the nation to decide? Should I not be able to leave my children with what ever I want on my own terms?

If we lived in an anarcho-capitalist utopia, no. But we don't, and taxes have to be collected from somewhere, so I'd prefer they come out of estates than from consumption or income.

You make a great point, but remember: we're talking about people with 5+ million. LOL. the MAIN objective is to create a legacy with my high net worth clients. For the average person, you're right, legacy isn't really an issue.

But you and I can certainly discuss tax reform objectively, regardless of the interests of our client base. (Full disclosure-- if the individual exemption gets lowered, many more people need estate planning).

And what funds that education? I'd argue inheritance. And with rising college costs, I shutter to think what I'll have to save to give my two kids a better life.

Do you know many people who have paid for college with inheritance? I don't. The vast majority take out loans to pay for their kids' education.

 

[wizards8507]

In short, yes; at least as far as American political philosophy is concerned. That's exactly why the estate tax was first implemented. This country was conceived as a meritocracy, where success and wealth would be distributed according to talent and diligence, not by accident of birth. Americans have always had a healthy distrust of nobility, which is enshrined in the Constitution's Emolument Clause:



Point being, if you earned it, Americans will congratulate you for your success. If you didn't earn it, your character is suspect. That's why such transfers are subject to stricter regulation.

But if I earned it, I'm also free to do with it what I want. You're focusing on the merits of the receiver of the gift, not the giver. If I had $50M when I died, I sure as hell wouldn't leave the whole thing to my children but I sure should be allowed to. It's not about my children, as the object of the gift, having any right to it; it's about me, as the giver of the gift, having the right to give it.

 

[pkt77242]

Wizards touched on it, but there is absolutely a "sweet-spot" for tax rates. At a certain point, citizens (customers) stop producing, throttle production, exploit achievable loop holes, strive to meet loop holes, and/or evade.

Hypothetically, if sales tax were 1% and income tax were 1%, virtually none of the above would happen as virtually all citizens would be fine paying those rates. Obviously it can't be 100% tax either. So the sweet spot is somewhere in the middle. Where? I'm not sure. But a higher tax rate does not necessarily equal more money for the government to spend.

No one is arguing against that. I would argue that the sweet spot for taxation is closer to the Clinton years not the Bush years.

I will also add that while the theory is that it throttles production, the truth is that for many of our largest GDP growth years (since WWII ended) we had significantly higher top tier tax rates.
Here is a look at GDP Growth. United States GDP Growth Rate | 1947-2015 | Data | Chart | Calendar

Here is a look at tax rates.
THE HISTORY OF TAXES: Here's How High Today's Rates Really Are - Business Insider

 

[Whiskeyjack]

But if I earned it, I'm also free to do with it what I want. You're focusing on the merits of the receiver of the gift, not the giver. If I had $50M when I died, I sure as hell wouldn't leave the whole thing to my children but I sure should be allowed to. It's not about my children, as the object of the gift, having any right to it; it's about me, as the giver of the gift, having the right to give it.

You could make the same libertarian argument against virtually any tax. "I earned it, so keep your hands off my money." And while it may have merit, we don't live in an anarcho-capitalist utopia, so the state is a necessary evil, and it has to be funded somehow. Due to the particular religious and political values of our founders, Americans have always looked askance at inherited wealth. So we tax that much more punitively than capital gains.

I'm not making a normative argument about how things ought to be. But if you're going to assert a moral critique of specific taxes, the estate tax has more to recommend it than most.

 

[Ndaccountant]

Efficient in that it hits very few estates (that the IRS tracks closely already), and only has to be enforced once against each. But more importantly, it's much less distortive on economic behavior than an annual tax or income, consumption or wealth. Those sorts of taxes do have massive effects on how people earn, spend and save.



In any given year, a wealthy entrepreneur is going to pay income tax on his salary, capital gains tax on the income generated by his investments, and various sales taxes on his spending. Why should a tax on the transfer of his wealth to others be considered fundamentally different from those first three categories?



There's no cap on how successful any individual can make himself in this country. There is (and should be) a cap on how wealthy he's able to make (non-charitable) others.

Because the intent of distributing it in any fashion they choose shouldn't be impacted by the federal government, IMO, if the transfer is not disruptive.

I would absolutely be on your side if there was clear empirical evidence that there were 1,000's of Rockefellers out there, but there isn't. Yes, there is wealth being passed. But that wealth isn't turning into multi-generational wealth, which is the intent of the tax. I can't be for fixing something when it's not broken, especially when it costs so much to begin with.