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john oliver brought up income inequality on his show, but i thought it was bizarre that he suggests the way to fix it is to raise estate taxes.

i personally find estate taxes to be morally repugnant, so i think he's a cunt for peddling it, especially since his call to action is to make it more severe.

Whatever happened to corporate taxes? How come this is never in question.

Call it what it is: DEATH TAX.

Since someone has to DIE for it to happen.

Why the government should get anything because someone dies is what is repugnant.

Study after study shows most millionaires earn their money, not inherit. But libtards always want more money. To buy votes and power to continue their agenda of getting a real 1984.

I'm not really a finance guy, but I'd say no, it wouldn't solve our income inequality issue. Wealthy people can often get out of paying a number of different taxes on much of their income that middle and lower class people generally have to (one reason why a national sales tax replacing an income tax is a horrible idea) I guess the theory is that the estate tax will be able to capture those assets that may have previously evaded (legally generally) taxation and thus make them more equal to more middle income families in terms of percentage of assets taxed. Once again, i'm not really a finance/tax guy, but it seems like a fairly easy tax to hide money from, which would defeat the purpose and more so hit the less wealthy people who don't have the same capabilities when it comes to moving their assets around in order to escape it (in part).

When did it aired?

You're right, it's really bizarre to suggest a tax to fix income inequality...

It's such an emotional issue dependent on where you stand. You have people like the Hilton sisters who make people question whether they really deserve what they have for doing nothing. But these same people seem to have no issue with what Justin Beaver or LeBron James and others make. Nasty CEO's and their millions are just horrible people when so many of our citizens "deserve" a piece of their pie to make their lives so much easier.

Personally I'd rater see an increase in opportunity equality than simply focusing on income.

An estate or death tax hits someone or their family at their most vulnerable time in life: when someone passes. Furthermore, this wealth, property, etc was accumulated by working throughout one's life and that work was taxed yearly going back to when that work began. So, this estate has already been taxed throughout the ages and this is what's left after the fact. That said, liberals are known for always wanting to tax something else.

Income equality is largely due to inflation, taxes can certainly affect things but they aren't the main problem.

Maybe, indirectly... it's just one more thing to disincentivize earning as much. I don't want to earn much more than EITC covers with a dependent. Up to ~$20k annual reported income, I effectively make a bit under 50% per hour more from federal and state tax breaks than for hours worked beyond that. It seems like a relatively raw deal to have "earned income" beyond that. You gross more, but the more you work, the more strongly diminishing the returns are (where $10/hr would become $15/hr by limiting how much you work, it can easily become $7.50/hr if you don't limit how much you work even though you'll still net more than the hours-limiting guy), which really screws over people working insane hours for low pay. Very few people keep that in mind, though -- better for most to earn as much as possible. -But in the same vein, I wouldn't want to lose boatloads of money just because I died and "earned too much," either. Some people facing imminent death, and even just retired people, already gift maximums each year to beneficiaries to try getting around the death tax (there are sneakier ways), but this isn't going to keep the IRS off someone with billions.

Estate tax basically tries to take luck out of life (and really, money has diminishing returns -- $10B taxed to $1B probably isn't as life-changing to a beneficiary as $100K cut down to $10K)... but then the government operates the lottery, basically the most counter-Progressive program on Earth, so...

Anyway - the government can use the income to come up with some wage subsidization scheme, pay for interning and vocational programs, more funding for general education and retraining programs - or unemployment, TANF, EBT, section 8, other things that simply increase net income. If you really wanted to increase income quality, the pretty straightforward choice is harsher progressive income taxes. If they just raised estate taxes to combat the budget deficit, I can't think of any reason it should significantly impact income equality.

First I am opposed to all forms of theft or uh... taxes what ever you want to call it, but the death tax works like this. The government lets me defer all of my tax liability by reinvesting my profits to grow my business in the hopes that I will employ people and grow the pie for everyone.

Let me restate that.. I pay 0 income taxes not one cent and sometimes get a refund even though I contribute nothing in the way of income tax. If I have a tax liability at the end of the year I spend what ever amount I need to on my business to 0 it out. I can do this indefinitely until I die at which point the government gets it's cut.. The government is owned by business and they make laws and tax code that benefits entrepreneurs, if you dont own a business you should start one if for no other reason than limiting you tax liability.

     

Why should there be income equality?

Bill gates born in africa would of never achieved anything, that is why.

I look at everything on a Global scale, the idea of countries is disgusting.. Oh how we take advantage of people because of invisible boarders.

Oh, OK.

It isn't just about that though, it is also about tax inequality in terms of the rate at which we are effectively taxed. Ideally, it would be a bit progressive like our graduated income tax, in reality though the wealthy often have access to mechanisms that can effectively give them lower tax rates than some middle class households (the same goes for big businesses). I pay more in taxes than General Electric does for example (as a percentage).

If we simply removed loopholes would that work for you? What about loopholes that government has put in place giving tax breaks for job creation, etc?

GE gives back in the way of jobs and innovation. How many poor families can now afford refrigerators compared to the poor of the past? Same goes for cars, TV's, phones, etc. Sure, we can make them pay more but they have the capability of moving large portions of their infrastructure to other countries (global economy) which some say would hurt our poor (and hurt ever growing government coffers....and government keeps wanting more so who pays?) more than helping our economy.

I think you mean "borders".

President Obama has suggested closing some loopholes, the problem of course is that Verizon for example has much stronger lobbying power in Congress than I do. That doesn't mean that they shouldn't have to pay taxes, or that I should have to have a heavier tax burden than they do. In fact you were JUST referencing the concept of entitlement negatively in your previous post. But suddenly you are relying on it to justify tax inequalities against the middle to lower income class?

Lobbying and "paid for" politicians is quite an issue.I agree they should pay taxes and I'm not justifying one over the other. It's a complex issue and I don't really have the knowledge level to say which one is right or not.

There is a lot I do not understand about the "inequality" crowd. For one, what equality are they concerned with? Equality of opportunity or equality of outcomes? In my view, no form of government or economy has ever designed a way to provide for equality of outcomes, and those that have tried have failed miserably. And market capitalism, especially American market capitalism, has proven time and time again to provide the best equality of opportunity while at the same time increasing general prosperity.

The other thing I do not understand is what I will call the "Pinketty solution." Pinketty correctly identifies a problem: return on capital is higher than general growth (r>g), so the rich get richer while the laboring classes' wages do not increase as quickly. But his solution is perverse: a punitive tax (80%) on all income over $500,000. I think we can all agree that this will have the effect of reducing the number of capitalists in the world. How can this be a good thing? If returns on capital exceed general growth, shouldn't the goal be to create more capitalists, not less?

I don't either. I also think though, that the national dialogue is rather driven by such people who, as you mentioned, tend to rely on emotive one liners or reduced and distilled talking points which are easier to understand, but leave a lot out leading to misconceptions and bad information.

One thing that is inseparable from this subject and has a lot to do with inequality is the fact that financial power within our society tends to translate into political power and that can be a self reinforcing fact of life. So we are left with wealthy individuals who are better able to influence law making to best suit their desires over those of us in the middle and lower income classes. That is a very visible aspect of our society and I think it (rightfully) angers people when they feel like they have no voice or that their voice is getting drowned out by a wave of money coming from a 1%.

That's another part I do not understand about this debate. It appears to me that most of the people clamoring for government to address "inequality" are also in favor of more expansive government. Won't that just lead to more regulatory capture? Doesn't more government just create more opportunities for manipulation and crony capitalism?

Well big businesses already have a lot of regulatory capture. I imagine (I can't speak for them) that the desire is to use government to change the system in a way that would limit such capture and reduce current capturing abilities (like through campaign finance reform initiatives).

If we had an Bitcointalk book club I'd suggest "The Price of Inequality" by Joseph Stiglitz. Which deals with issues such as these. I've been meaning to read it ever since it came out, but haven't gotten to it yet.

While I have not read that book, I have read a lot by Stiglitz. I will read the book, but Stiglitz seems to get it wrong more than he gets it right. During the financial crisis he was bemoaning the system of privatized gains and socialized losses that the bailouts created. But, before the crisis, he was in favor of explicit government guarantees of institutions like Fannie Mae and Freddie Mac. I am not sure I can take him seriously.

Weather you agree with him or not in everything, one thing that I like about Stiglitz is that he is very analytical and willing to elaborate on his opinions. No one is always going to be right, that's not how economics works, but I find Stiglitz pretty useful for his analysis and breakdown abilities. He is useful for sparking discussion and is much better to read than someone presenting an emotive argument on the subject. He's an infinitely better writer than Paul Krugman for example.

I am skeptical of campaign finance reform because all of the proposals I have seen greatly favor incumbency, which tends to favor entrenched interests. Besides, most regulatory bodies are run by bureaucrats and executive appointments, not elected officials. We can agree about Krugman. He is a grave disservice to everyone but himself.

Institution building and reform is a process, the legislative branch is generally a good place to start given the pressures and influences that they can have elsewhere and in terms of being able to highlight issues for national discussion (to say nothing of their law making abilities).

The problem is our legislative branches (at least federally) are flooded with incentive to make laws or set direction based upon what their "sponsors" want and not necessarily what is good for everyone as a whole. Regulatory laws that penalize one while enhancing a more "supportive" corporation or group seems to be the norm. It's going to be relatively impossible to really solve inequality (monetary or opportunity) if the regulators are bought and paid for.

wasn't john oliver the one who said that it would only affect .03% of the population.. because, you know, you can inherit up to $5ish million (per parent) without being taxed? so it's the same thing as taxing the wealthy. if i were inheriting, say 20 million dollars, and had to pay the taxes, i wouldn't love that fact but if it's a small percentage of my inheritance, then i won't be all up in arms over it.

GE "doesn't pay tax" because the tax structure in the US is stupid.

To bring overseas money home would require paying upwards of 30%, while most countries only require 0-3%. There have been plenty of CEOs in the news lately stating if the US fixed that issue they'd be more than happy to bring billions back and employ people here.

Flat Tax is the way to go. 17% of everything you make over $30,000 and no deductions, loopholes, NOTHING.

That would bring in more revenue and would save people money who have to now get their taxes done and pay for that or buy software and pay for that.

And all those tax lawyers and other parasites would have to get more honest work.

Billions would be saved by the people on that alone.

Still have state tax systems to deal with. So if I make $40k salary I should pay 5% of my income in taxes, but if I make $400k you think it's fair that I pay 0.5%?

40k salary = (40000 - 30000) = 10000 * 17% = 1700 / 40000 = 4.25%
400k salary = (400000 - 30000) = 370000 * 17% = 62900 / 400000 = 15.7%
2M salary = 1970000 * 17% = 334900 / 2M = 16.75%
2B salary = 1.97B * 17% = 334.9M / 2B = 16.75%

The higher the salary, the closer to the 17% of said salary you would get under that plan (not weighing in on the merit....yet).

Moral arguments aside, even if the estate tax was 100% I don't think it would affect inequality that much. But I don't know the numbers

I agree with your flat tax proposal, but I think you could get away with a lower rate--something like 15%--and not affect revenue.

I disagree with your comment about states, though. States can and should do what they want. If a state has higher taxes, businesses and individuals are free to locate to a different, lower tax state.

Wealthy people have liabilities too. Their total monthly payments to keep everything running smooth might even exceed Average Joe's annual income. It's not as easy as "the family will just take over" either. You have bankers, lawyers, accountants, executors, trustees, beneficiaries, etc. to deal with. Everyone wants a piece of the pie, and everyone wants to be sure their piece of the pie is the correct size. So the courts might freeze all assets, or the banks might lock the account until a court orders otherwise, etc. Now it's up to the rest of the family, who might all be fighting, or at the very least are grieving, to come up with the means to pay the bills. But since these guys are Average Joe, and they have their own lives to take care of, they simply can't afford it. Or maybe a kid or two gives up their own home(s) so they can save their parents' home and/or business / whatever. And at the end of the day, assuming they all make it through the initial battles and the dust settles, it's possible that none of them even have the wherewithal to keep the wheels turning, so income dries up and they lose the bulk of the estate anyway.

This is the position that I've always had too. I looked it up a few years ago and saw that the estate tax makes up very, very, very, very, very, very, very, very little of our total receipts, to the extent that doubling, tripling, quadrupling, etc. wouldn't even be noticed from a revenue standpoint, but it would certainly be noticed from the standpoint of families whose lives can be ruined as a result of it.


Besides which giving money to the government doesn't magically solve inequality. Corporatocracy still says the money will be used for increased military spending, bigger contracts for bigger business, etc. The little guy factors into this exactly nowhere.

There's already so much shit to deal with after someone dies. Inviting the fucking Gestapo to goose step through it all is cruel and shitty. People who are okay with that are monsters. Just bitter and jealous little monsters.

Hell, how about taxing 100% of everyone's income and realizing it's not even close to covering government spending? It's one of those non-issues that was created to misdirect the public so they have someone to be angry about.

I'm looking forward to France's 75% 'millionaire tax' to become law and see all the smart and successful people flipping the bird and moving out of this country.

http://i224.photobucket.com/albums/dd216/123draw-images/comi.png (http://media.photobucket.com/user/123draw-images/media/comi.png.html)

Communism.

Failed!

I agree with this. It's all a misdirected blame game. While government spending continually goes up and incomes go down then someone needs to be the bad guy. How about the person with the shiny car instead of the politician?

http://iowahawk.typepad.com/iowahawk...ion-a-day.html

Government spending as a percentage of GDP hasn't really dramatically increased. It is about The same as it was under Reagan.

and?

Continually increasing federal debt (currently $17,833,481,663,000) is a good thing. I forgot. Why don't we simply double down? It's not like the "rich" and evil CEO's can even afford to pay off what we borrow yearly anyway. We can use that additional credit to give more to the poor.

Easiest way to get around estate tax is to tie a big chunk of your money up in precious metals that aren't reported. Your beneficiaries know where the metals are after you die and can gradually sell it off, cash transactions, as they need money. The same is true for guns, art, collectible currency... Don't name it in your will and only let the beneficiary know how to get to it.

The same is true with cash.

I know someone in his 80s who randomly withdraws odd amounts in the $5-10k range and sticks it in a safe. When he dies and his friend opens the safe and finds $500k in there, he'll spend it and never pay a tax.

Well, john oliver was focused solely on estate taxes, not all death taxes.I'm personally against all death taxes, but this thread is about estate tax in particular.

what other ESTATE taxes are NOT death taxes?

are not all estate taxes triggered by death?



http://www.irs.gov/Businesses/Small-...yed/Estate-Tax

The Estate Tax is a tax on your right to transfer property at your death

.............one reason more and more of our economy is underground; i.e. cash only or bartering. No records for the tax Nazi's.

Yep.

I don't like paying taxes but I understand the need.

But when it gets to the point where I'm losing 50% and some money is being taxed two/three times, I'm going to start "doing this to reduce my taxes."

This whole problem would be easily solved with a simple flat tax rate and careful money management but I have yet seen a government of even a medium sized country even consider it so if their country collapses it's their own fault as far as I'm concerned.