I just pick on Matt about it because I am a dirty pinko Commie and he is a goofy ass libertarian. Plus it inspires him to write 87 page dissertations.

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I'm beginning to think that we are much more fucked than I thought.

It is somewhat amusing in discussions about tax, how often those who want to get rid of a tax always use the highest possible marginal rate as an example. They don't mention that it is only the marginal dollar on the x hundredth of million, that is taxed at 65%.

It's generally ignored because regardless of the number of zeros you add the effect is the same. Where you have a business that is worth 500K or 500M is you end up paying 65% tax on even a relatively small portion of the businesses capital, non liquid, value you're going to run into a major problem keeping that business running as is.

The argument that "It's only the marginal amount above "X"" essentially boils down to "We think it's ok to cripple businesses if they are larger then "X"".

Again if Richie Rich is passing on 50M dollars in cash to his heirs that's an entirely different discussion then if Richie Rich is passing on an operating business with 50M dollars in assets of which 47M dollars are tied up in non liquid, business productive, assets.

So in the latter case Richie Rich passes on 50M in the form of a business. His heirs have to come up with 65% of 40M or 26M dollars, over half the value of the company. Essentially the company has to be liquidated or sold entirely. If there are no buyers for the company then it's liquidated.

~Matt

In smaller estates, yes. $11 million covers most of the smaller estates, before any estate taxes are due. In large ones, often that is not the case.

Take Jeff Bezos. Currently with a new worth estimated at $66 billion. Amazon has been in business 20 years and magically hasn't shown a profit. So no income tax has been paid by them. Amazon stock makes up the bulk of Bezos estate. So, it is not double taxation.

I just pick on Matt about it because I am a dirty pinko Commie and he is a goofy ass libertarian. Plus it inspires him to write 87 page dissertations.

Here's the odd thing. I'm very well versed in our current system of economics and politics. I understand how it works and work with in it on a daily basis. I deal with it's flaws, supposed benefits and on and on and on, again on a daily basis. Yet most people can't even comprehend the very basics of libertarian ideology and they are willing to reject them out of hand. If one had even a modicum of knowledge of Libertarian ideology they would not even need to ask questions like...

How does this "paradise" differ from medieval Europe?

Or some undeveloped part of Latin America, where government infra-structure and tax collection, have yet to reach?

~Matt

Why does everything have to be taxed?

So you can have social security, medicare and the biggest military in the world.

As long as people want those things, there will be more tax and with less people working to pay those taxes there are only 2 options. Increase taxes on those earning and/or lowering the tax thresholds on existing sources or find new sources.

Matt-
The reason I ask about about the non-governed parts of latin America and medieval Europe ........

Is because these are historical examples of what the economy DOES look like in the absense of government.

If I asked an anarchist economist:
how a "utopian anarchist economy" might differs from medieval Europe....
They would have an answer.

Really not trying to be dogmatic here.
I do work in finance.
I did take graduate classes in economics, history and economic history.
But all that proves is how little I really know.

But just cause I am a bit of a fool .....
that doesnt change the fact that the loudest voices in the LR come from dangerously insane morons.
(Of which you are NOT one).

Summary:
1) All taxes are harmful to those who pay them.
2) All taxes might harm economic growth 3) The taxes which harm economic growth the least are the "best" of the bad.
4) The estate tax is a good candidate for the "least harmful tax"
5) There are circumstances where the estate tax causes huge problems for family farms and business.
6) Many of these problems can be overcome by good planning.
7) Some families fail to do this planning and blame (the totally forseeable problem) on the government.
8) Most right wing idealogues think that the estate tax will effect them.
And they are very wrong.
9) Many people effected by the estate tax were planning on making charitable donations anyway. The estate tax just provided extra incentive.
10) Clinton is proposing on raising the maximum amount of the estate tax.
She is NOT proposing increasing the number of people that pay the tax.
(In fact, the exclusion from this tax has incresed drastically over the last 10 Bush/Obama years).

There is one last point about this that should be noted.

Between 1999-2015 the personal exemption for the estate tax has gone from $650,000 to $5,000,0000.

This means that most of the families (or family businesses) that would have had to pay the estate tax in 1999
DO NOT have too pay it now.

The fact that Clinton is NOT talking about lowering the exemption is important.

That's because he has not "cashed out"... Otherwise known as a "long term investment" which is universally heralded as a positive thing to grow businesses and economies.

Government confiscation of this type of activity is also universally frowned upon as it does the opposite.

You act like he's spending it on blow and hookers.

You have some good points but there is always the underlying problem of ... If the estate tax is good, then it should good and applied evenly to everyone.

When a tax is applied only to "special people", then it creates class warfare.

Nobody really likes paying sales tax but it is accepted because:

1. Everyone pays the exact same rate, no exemptions, shelters, offshore shell companies etc.

2. We all get to manage our tax burden based upon our decisions. Want to reduce taxes... Then don't buy a new car.

Most folks recognize the need for government structure but we have excessive government taking too much, wasting too much and doing it in a way that people know instinctively is not fair.

Flat tax on dollar 1. Let people vote for their best interests versus voting for someone else's money.

The reason I ask about about the non-governed parts of latin America and medieval Europe ........

Is because these are historical examples of what the economy DOES look like in the absense of government.

And if you knew anything about Libertarian ideology you would at least grasp the idea that it has nothing to do with not having a government. Short of Anarchical Libertarian-ism, a minor offshoot that most find incompatible with Libertarian ideals, no one that believes in Libertarian ism believes that the government should not exist.

For most that believe in Libertarian ism, government plays a very specific, yet very important and irreplaceable role. Yes there are some Libertarians that follow more extreme versions just as there are dems and reps that follow more extreme versions. Some may even believe in Anarchical Libertarianism, most do not.

If I asked an anarchist economist:
how a "utopian anarchist economy" might differs from medieval Europe....
They would have an answer.

I have the answer, I have given it here before. I find the question a bit like someone asking a mechanic to explain why changing the air in the tires doesn't cause the engine to run rough. It shows that the person asking the question lacks basic understanding of either the subject at hand or has no desire to truly discuss the subject on a rational level.

~Matt

The fact that Clinton is NOT talking about lowering the exemption is important.

Well except she IS talking about lowering the exemption. From 5.45/10.9M to 3.5/7M. She then wants to increase the rate at the low end from 40% to 45%, for those over 10M, previously exempt to 50%, those over 50M to 55% and those over 500M to 65%.

So a person with a 10M dollar estate goes from nothing to 45% on 3M dollars. The person with a 500M dollar estate goes from 40% on 490M to 55% on 493M...whatever it's only 70M dollars or more.

~Matt

And yet we will still be able to navigate around most of these taxes for most estates, including using Perpetual GST Trusts that circumvent them.

And is that an efficient use of resources or an added expense and limitation of flexibility?

And yet we will still be able to navigate around most of these taxes for most estates, including using Perpetual GST Trusts that circumvent them.

And someone with no estate and making 30K a year can find someone to pay them cash under the table and pay no taxes. What's your point? The discussion is about whether A or B is better or worse for any number of reasons, not whether one can get out of A or B. If where going to go down the rabbit hole of the 75K+ pages of tax code and loopholes I'm sure we could come up with a way to make a pauper pay 100% tax rate on everything they made and a trillionaire to pay nothing at all.

There's no arguing that the tax code is FUBAR, but that's not the discussion at hand.

~Matt