Asymmetrical Information

Am I the only one who is tired of hearing every public policy discussion framed in terms of its impact on those, shall we say, outre sexual preferences?

But my income taxes are much higher because I am married. Everybody prattles about equality, but no one is doing anyone for the basic egalitarian two-earner couple. This is because most people (and all politicians) are total hypocrites.

y81,

That's because the right answer isn't obvious. Lowering your taxes would mean providing an even more dramatic subsidy to 1-earner households, which offends some people. Why should a guy get to cut his taxes in half when he marries a housewife? What about the Playboy-American population? I'll bet they're more numerous than Homosexual-Americans.

Am I the only one who is tired of hearing bizarre exaggerations like the kind Occam's Beard made?

This is a perfectly legitimate question. Gays (especially gay men) tend to have a higher net worth than the rest of us because they don't usually have the expenses of child-rearing. Therefore, the estate tax falls disproportionately on gays.

(As one who opposes both gay marriage and the estate tax, I don't see it as all that critical an issue, but it would be fun to watch the Dems squirm when they're pushed into a forced choice between their love of higher taxes and their affinity for the GLBT vote.)

Ron,
Actually, you may be the only person, who is tired of hearing people who are tired of hearing about so many "gay rights" issues.

"True, as I've said before, that marriage carries special subsidies, and subsidies are inherently discriminatory."

Why should the government not act in ways that are discriminitory? I can understand not discriminating on the basis of race, gender, faith or sexual preference, but there are plenty of other reasons to discriminate. They discriminate in favor of veterans to encourage service in the military. They discriminate in favor of those who originate intellectual property by granting them patents and copyrights. They discriminate against those who break the law by imprisoning them. These are good things.

Marriage produces people who are more law-abiding, who generally relieve the governement of the onerous burden of rearing children etc. Thousands of years of empirical evidence have been interpreted as showing that marriage is beneficial to society. Maybe that is wrong, but it is conventional wisdom. The better course is to open this beneficial arrangement up to more people.

(As one who opposes both gay marriage and the estate tax, I don't see it as all that critical an issue, but it would be fun to watch the Dems squirm when they're pushed into a forced choice between their love of higher taxes and their affinity for the GLBT vote.)

Exactly who would these gay multi-millionaires be who care so much about their estate but don't mind the idea of being denied marriage or parenthood? I guess the Dems can kiss those four votes good-bye.

Expanding on Njorl's thoughts, who are these gay multi millionaires leaving their enormous estates to? Most people are eager to preserve wealth for their children; your aging gay partner doesn't really need it because he'll be dead soon too, charities are exempt from the estate tax, and few of us, gay or straight, are that attached to our second cousins.

Wouldn't the proper (and morally correct) answer be 'I agree that the estate tax is currently discriminatory against gays/lesbians, that's why I support gay marriage'.

No reason to support a 2nd wrong (elimination of the estate tax) to mitigate the first wrong (lack of marriage rights for gay couples). Just fix the first wrong.

A second wrong!?!!?

"They died! Let's take their money!"

That's a right?

Why are there additions to my comments?

I will post no more at this site until I see a message indicating that comments will not be altered. I must say that I am quite surprised. I didn't realize I was at redstate.org.

Good bye. It has been nice having a dialog with many of you. I'm sad that such is no longer the policy here.

AMEN! Can we at least establish that, ceteris paribus confiscating people's property or eliminating their right to dispose of it as they wish, is a harm, a negative? Please.

No, we cannot. If you believe that the estate tax is 'confiscating peoples property' and a negative, then you would presumably consider all forms of taxation, including income, sales, cigarette, etc. to be confiscation and therefore a negative. Since we need tax dollars to have a functioning government, any assertion that taxes are confiscation and a 'harm' is utterly ludicrous.

The Estate Tax is merely part of the overall tax system. You can argue about which is the most efficient structure, whether the tax code is too progressive/regressive, or whether government expenditure and therefore taxes are too high, but suggesting that taxation is unnecessary or a negative is foolish and disregards reality.

"The Estate Tax is merely part of the overall tax system. [etc]"

The problem with the estate tax is that all of that money and worth has ALREADY been taxed - that is, when I earn $100, Uncle Sam took $25. Now, when I have managed to save some of that money, say, over the years, another $100, Uncle sam coms and taks a cut again.

This is what makes people angry - multiple taxations of the same money.

Well, all money is taxed multiple times as it moves through the system. You earn $100, you pay tax on it and net, say, $70. You spend the $70 entirely on haircuts, the barber pays taxes on his $70 in income, etc.

If, instead, you die on your way to the barber, the $70 is transferred to your heirs rather than to the barber. The estate tax, in effect, taxes this 'income' to the heir. Their are obviously nuances to this (the inheritance has not been 'earned', like the barber's haircut revenue is), however all parts of the tax code contribute to total tax revenues. If you eliminate the estate tax, there is a revenue hole that must be made up. To keep the same degree of progressivity to the tax code, there must be an offsetting increase to the higher tax rates. (e.g., the top tax rate would need to be moved up to say, 43% from 39.6% to offset the loss of estate tax revenues and maintain a similar level of progressivity.)

Or, you can make the tax code less progressive, which is what many libertarians have as a goal anyway.

The estate tax is not taxing for a good. It is not taxing for a service. You can't make the argument that its like registering a car, where you pay for the road usage, or sales tax where you pay for favorable business environments with regulations, places to sell and buy, etc.

It is a one last chance firesale/cash grab "just because" the government deems that wealth is not longer needed and wasn't "earned" by the family member or person inheritng it. It's disgusting.

All that weatlh was generated presumably paying taxes and now the gov. thinks it should take more if it simply because you had the pleasure of dying?

Yes, it means Paris Hilton, the Kennedy's and other dynasties of America get to continue on and pass their wealth, but there is something very unfair about government saying, "You've been so successful that we don't think your kids or family should get too much benefit from it."

It's disgusting. It's the one clear tax everyone should be against, but because so many tax-and-spend types have their pet projects and don't want to raise the ire of the masses by making us all pay our fair share they try to stick it to the (supposed) rich.

Yes, ceteris paribus, taxes should be minimal.

But the estate tax may be far and away the best method of taxation. It does not disrupt the capitalist feedback loop of providing more resources to those who have proven themselves capable of allocating what they have somewhat wisely. Indeed, it CLOSES A BIG HOLE IN CAPITALISM -- the distribution of massive resources to heirs who have NOT proven themselves, and due to regression to the mean and a whole host of other factors, are far more likely to work to protect their existing fortune and stifle innovation in the process than they are to be as productive as the fortune's creator. Men like Gates and Buffett know about this corrupting effect, so they're leaving their kids inheritances equal to less than 0.03% of their fortunes.

Even with less than 0.03%, the kids who really are competent still start off in a much better position than their parents did, and thus can still go further with the same amount of effort and luck.

(Incidentally, there is nothing wrong with multiple taxation. Ever heard of inflation? Property taxes? The question is what are the consequences of particular methods of taxation, not whether they are consistent with your naive mental model of how the world should work.)

Personally, I think the things that really tick people off about etate taxes are the confiscatory rates, forced liquidation and governance changes that follow from confiscatory rates on illiquid assets and/or the resultant estate planning. Not to mention that the gaziillionaires find a lot of ways around it while the smaller guy pays 100s of thousands and people like to feel they've provided for their kids.

Um, can you provide classes of examples of "smaller guys" paying 100s of thousands, and as a result actually failing to provide for their kids? If your definition of "providing for their kids" entails allowing them to never make an ounce of productive effort again, consider that that may not exactly be consistent with the public interest...

Anyway, the solution to this problem is to raise the minimum for the estate tax to take effect, and to the extent realistically possible, close the loopholes that allow gazillionaires to escape the tax.

Dog of Justice

But the estate tax may be far and away the best method of taxation. It does not disrupt the capitalist feedback loop of providing more resources to those who have proven themselves capable of allocating what they have somewhat wisely

The death tax supporters are filled with a burning desire to punish the rich. But as is always the case with taxes designed to punish the rich (AMT, Yacht tax, etc.) These taxes always end up hitting non wealthy people, not the rich.

The rich have plenty of accountants, attorneys, and financial advisers. The working small business owner does not. So the working small business owners family finances gets wrecked by the death tax.

In fact many of these folks don't realize they have death tax problems until the business owner dies. And at that point it is too late to do anything but sell the business to pay the tax bills.

TJIT: As I mentioned in my last post, the solution to that problem is to raise the minimum for the estate tax to apply, not to eliminate the tax entirely. $5 million may be too low an exemption; something closer to $20 million or even $50 million may be better, just to make absolutely sure that your objection is addressed.

I was doing fine unitl I got tired of the guy who got tired of the guy who said he was tired of the guy who exaggerated about every policy discussion being framed in terms of its impact on those of, say, outre preferences. Then I simply had to stop.

I was doing fine until I got tired of the guy who got tired of the guy who said he was tired of the guy who exaggerated about every policy discussion being framed in terms of its impact on those of, say, outre preferences. Then I simply had to stop.

Dog of Justice said

the solution to that problem is to raise the minimum for the estate tax to apply, not to eliminate the tax entirely.

Well for a number of reason the AMT is chewing on a large and increasing number of middle class people. So much for the idea of designing a tax to hit only the wealthy.

Same thing for the death tax.

Your argument also ignores all of the losses to the economy caused by people doing economically undesirable things to minimize the impact of the death tax.

If I recall correctly there is evidence that when the economic distortion caused by the death tax and the cost of collecting the death tax are factored in the death tax barely brings in enough revenue to cover the economic and collection costs it imposes.

I wish people would stop trying to punish the wealthy. These policies generally never hurt the wealthy and cause considerable economic and social damage.

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