Lion of the Blogosphere

$10.86 million exemption

A married couple can pass $10.86 million to their children without paying any estate taxes ($5.43 million each).

It’s insane to think that people worth that much money need incentives do to whatever it is you think they would be doing if there was no estate tax.

And as I keep pointing out, the children of the super-rich vote overwhelmingly Democratic so they don’t care about the estate tax taking away from their inheritance.

If anything, maybe we should be lowering the amount of the exemption.

ADVICE FOR DONALD TRUMP

The super-rich hate you and aren’t voting for you, and you don’t need their donations. Don’t do something stupid like say you are going to cut their taxes the way Jeb Bush did. Differentiate yourself from Bush by supporting the middle-class and not the plutocrats.

Written by Lion of the Blogosphere

September 9, 2015 at EST pm

Posted in Taxes

36 Responses

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  1. You may be right that rich people aren’t going to be motivated to have kids by financial incentives.

    However, I still believe that the estate tax contributes to the maintenance of a dysgenic culture.

    Our society should be promoting the idea that for smart and hard working people, the highest aspiration should be having a large family and putting them in a good position. We should not be sending the message that their wealth should go to welfare bums, foreign refugees, rehabilitating criminals, etc.

    In times and places where the rich got status from having a lot of kids, they thought in terms of legacy and leaving something to their progeny. See Tywin Lannister in Game of Thrones. By taking their money at death, society sends the message that any such aspirations are selfish and socially destructive.

    I think an HBD-aware government may place higher taxes on the rich, but would abolish the estate tax because of the message it sends.

    Hepp

    September 10, 2015 at EST am

    • “See Tywin Lannister in Game of Thrones.”

      That’s a novel written by an aspergery uber-nerd. And I don’t see why any sane person who is not a plutocrat himself would want a return to feudalism.

      Lion of the Blogosphere

      September 10, 2015 at EST am

      • True. So, see the Rothschilds.
        Or, see multi-generation farms.
        Or Mars, Inc.

        Half Canadian

        September 10, 2015 at EST am

    • The maintenance of great fortunes and the stagnation of the political class associated with them is anti-meritocratic and will not give you any social benefits you could associate with eugenics. The huge gains in innovation and productivity in the first 6/10th of the 20th century were thanks in large part to the huge expansion of social mobility associated with the declining importance of inherited fortune and a weakened grasp on political power by the very rich. Since the 70s the power of the very rich has come back with a vengeance, with it vastly decreased social mobility, and we see the payoffs in lower productivity gains, lower meaningful innovation, even the degradation of art as all the levers of society are going back to being dominated by a stagnant, insular elite propped up by their money.

      Increasingly the ability of the very rich to keep their children very rich, and therefore politically powerful, no matter what will have the exact opposite effect of increasing the number of “smart and hardworking people” in society. Well it may not necessarily decrease their number, but it will decrease their ability to use their talents to benefit others as all the important positions in society are monopolized by mediocre scions of the rich.

      chairman

      September 10, 2015 at EST am

      • Excellent comment.

        Lion of the Blogosphere

        September 10, 2015 at EST am

      • Social mobility cannot go on forever. Eventually, you reach a point where there’s been enough genetic sorting that there isn’t much more talent in the lower classes. That’s what the Bell Curve showed. IQ has become a better predictor of wealth over time, and I’ve seen nothing to contradict that since. Because social mobility is decreasing, you can’t just assume it’s because of something that the rich have done.

        We should prevent the rich from rigging the system in their favor. But passing on their wealth to their children is not an example of an unfair advantage. It’s the ultimate example of what we should be encouraging as a society.

        Hepp

        September 10, 2015 at EST am

      • The huge gains in innovation and productivity in the first 6/10th of the 20th century were thanks in large part to the huge expansion of social mobility associated with the declining importance of inherited fortune and a weakened grasp on political power by the very rich. Since the 70s the power of the very rich has come back with a vengeance

        Well, sort of, but plenty of places have negated the power of the rich and opened the gates to the lower classes: Venezuela, Cuba, the usual suspects of Communism, Socialism, etc. Things haven’t worked so well in those cases.

        bomag

        September 10, 2015 at EST am

      • Meriprolestan or the Great GatsbyStan, is on par with high IQ, East Asian societies of abject poverty, and multiculti dysfunctionalism of low IQ Brazil.

        JS

        September 10, 2015 at EST am

      • How do we keep the rich from rigging the system?

        If the middle class decide to skimp on frivolous consumption, then society will change. I see plenty of poor NAMs and the lower classes, fussing happily, with all kinds of junk.

        JS

        September 10, 2015 at EST pm

      • That junk is manufactured in China. If Americans spend less on junk, it hurts the Chinese economy and not the American economy.

        Lion of the Blogosphere

        September 10, 2015 at EST pm

      • It hurts American businesses, like Walmart, Best Buy, and the other corporate retail outlets.

        JS

        September 10, 2015 at EST pm

      • @Hepp

        “Social mobility cannot go on forever. Eventually, you reach a point where there’s been enough genetic sorting that there isn’t much more talent in the lower classes. That’s what the Bell Curve showed. IQ has become a better predictor of wealth over time, and I’ve seen nothing to contradict that since. Because social mobility is decreasing, you can’t just assume it’s because of something that the rich have done.

        “We should prevent the rich from rigging the system in their favor. But passing on their wealth to their children is not an example of an unfair advantage. It’s the ultimate example of what we should be encouraging as a society.”

        Wait, if the rich are that much smarter as a group, and intelligence if largely/entirely genetic, then inheritance taxes don’t hurt the rich or their families because they’ll just rise to the top – at least in the group level – over the next generations.

        Forget “social mobility”. What’s really important is that the middle and lower end of society have good lives. After all, intelligence is genetic therefore their low status is not their fault. Sure, you don’t let them outbreed those higher up, but you accept them as your compatriots and you cherish and protect them.

        Jesse

        September 10, 2015 at EST pm

      • ‘The huge gains in innovation and productivity in the first 6/10th of the 20th century were thanks in large part to the huge expansion of social mobility associated with the declining importance of inherited fortune and a weakened grasp on political power by the very rich. ”

        Not to mention a much tighter labor market due in no small part to the 1924 immigration restriction act. Then as now, the wealthy were in favor of cheap imported labor. The only reason the wealthy went along with the 1924 restrictions was because they genuinely feared that large scale immigration might be the camel’s nose under the tent that would allow communism to infiltrate our country and result in the confiscation of their fortunes.

        Sgt. Joe Friday

        September 10, 2015 at EST pm

  2. The federal estate tax is fine. State estate taxes often have much lower exemptions. When my in-laws die we are going to be stuck with a tax bill for their house modest (under 1800 square feet) but well-located house.

    T

    September 10, 2015 at EST am

    • Surely state estate taxes are too easy to avoid? Perhaps a very low state estate tax rate that raises a bit of revenue without encouraging too much avoidance might be ok. But to prevent domination by obscene fortunes, it needs to be federal.

      Francis

      September 10, 2015 at EST am

      • That’s easy – don’t die in a greedy-ass state that has one. =)

        Tarl

        September 10, 2015 at EST am

      • “Surely state estate taxes are too easy to avoid?”

        They would be, if the people in question weren’t in denial of the fact that they are going senile.

        T

        September 10, 2015 at EST pm

  3. If there was some concrete proposal to increase estate taxes (>5 million dollars) in order to lower middle class tax rates then I could get behind it otherwise I am not really convinced the money would be spent wisely. In a general sense it would be great to remove loopholes that allow the seriously wealthy to avoid paying the levels of tax that normal people pay, (the same applies to corporation loopholes). If that happened I don’t really see the need for estate taxes as it is just a secondary tax on money that has already been earned.

    Magician

    September 10, 2015 at EST am

  4. Trump’s own wealth owes a lot to a fortune he inherited. Everything I’ve seen suggests his kids play a significant role in managing the empire.

    Vince

    September 10, 2015 at EST am

  5. Also: If you fear your kid cannot thrive on a ten million dollar inheritance, then you were a shitty parent.

    Vince

    September 10, 2015 at EST am

  6. I don’t like the idea of big government. I particularly don’t like the things big government spends the money on. I’d rather the money were burned. Also I don’t like the idea of estate taxes as I’m very frugal by nature. So I see taxing inheritance as a personal attack against those with my thrifty values. Having said that, those with my values are often the ones making the fortunes. Which are then left to snot nosed brats who don’t share them. I’m so fed up with radical trust fund babies that I would love the IRS to stick it in their ass. In fact, I see their inheritance as being partly responsible for their arrogance, idiocy and radical politics. Even more so for their lies and hypocrisy. Many rich Dems say that they should pay more in taxes. Yet it never seems to happen does it? If they really meant it then it would have happened. It’s all bluster and bluff and hypocrisy. I think we should call the Dem’s bluff like Trump did back in 1999.

    http://abcnews.go.com/Politics/donald-trump-proposed-biggest-tax-hike/story?id=32926722

    The Dems (even socialists like Robert Reich) were squawking that it would never pass. Yet when the Dems had a clear majority in both houses in 2008 they passed an awful lot of socialism. But they sure didn’t raise taxes on the rich did they? Nope. It’s just like the crocodile tears liberals shed for the poor. They’re always wanting to raise taxes to help the poor and caterwauling that conservatives are “greedy” and “hate the poor”. But studies show when it comes time to pony up from their own pockets that they’re liars and hypocrites. A liberal is someone who wants to raise taxes then does everything s/he can to lower their own. Apparently they consider merely arguing for higher taxes to have done their share. So let’s call their bluff and expose their hypocrisy.

    http://www.nytimes.com/2008/12/21/opinion/21kristof.html

    PS: Note that my views actually have little to do with money itself. But the hypocrisy and politics of so many who have it.

    destructure

    September 10, 2015 at EST am

  7. Yeah screw them. Rich people are bad and they don’t deserve what they have. The government deserves it more!

    Yaka_Mein

    September 10, 2015 at EST am

    • Please stick to a single pseudonym, thank you.

      Lion of the Blogosphere

      September 10, 2015 at EST am

    • And maybe you haven’t heard but the United States is a government of the people, by the people, and for the people. So it’s not about government deserving the money, it’s about the PEOPLE deserving the money.

      Lion of the Blogosphere

      September 10, 2015 at EST am

      • Let’s be realistic here.

        Glengarry

        September 10, 2015 at EST am

      • Socialism (caring for the poor or average) is bad in term of human evolution.
        Downward social mobility is actually eugenic when smart people replace low end of society, which have been the case of feudal England. The condition should be natural to make low end of social classes difficult reproducing themselves.

        It is long history of feual society that created the high intelligence, high achievment, pale skin.

        Current system or socialism will create idocracy at end when mediocre people have upward social mobility and become genius in the land of idiots.

        IC

        September 10, 2015 at EST am

      • United States of Dysgenica (USD)!

        JS

        September 10, 2015 at EST am

  8. The wealth is already taxed. There are capital gains, dividend, income, and real estate taxes. The inheritance tax is like a highway toll – it’s not the best place or time to extract taxes. It directly impedes capital formation by exacting huge, one-time taxes on wealth. It contributes to the very high failure rate of second and third generation family businesses that would otherwise grow into large, thriving businesses paying even more in taxes.

    bjdubbs

    September 10, 2015 at EST am

  9. Differentiate yourself from Bush by supporting the middle-class and not the plutocrats.

    Hasn’t he already done that with his support for the VA and SS?

    Related, Vox has been running articles basically saying Donald Trump is smarter than everyone else running for President, and their advisors because his policy positions (Booo immigrants, yay Social Security) is the most popular policy position:

    By my count of National Election Studies (NES) data, 24 percent of the US population holds this position (increase Social Security, decrease immigration). If we add in the folks who want to maintain (not cut) Social Security and decrease immigration, we are now at 40 percent of the total electorate, which I’ll call “populist.”

    http://www.vox.com/2015/8/18/9172653/trump-populism-immigration

    dsgntd_plyr

    September 10, 2015 at EST am

  10. OT – Establishment conservative media voices (NRO) and state level Republican establishment types are really starting to push the DEMOGRAPHIC TIME BOMB! meme to counter Tumpism. Lion’s indirectly addressed this with his robot talk but . . . . perhaps more?

    Curle

    September 10, 2015 at EST am

  11. Perhaps we can replace the estate tax with inheritance tax. Taxes are based not on value of estate but how much one inherits. So if an only child inherits $20 million he will have to pay an inheritance tax. If 4 children inherit $20 million, they each get $5 million and are exempt from inheritance tax.

    This will encourage the rich to have more children and to spread their wealth among different heirs. This will have an eugenic effect on the birth rate and prevent accumulation of large unearned wealth.

    Jimi

    September 10, 2015 at EST am

  12. Republicans always attack the inheritance tax out here in flyover by saying it threatens the family farm. That is, the heirs can’t keep the farm running because they have to sell it to pay taxes. And that it really doesn’t take much of a farm to be appraised at these levels, they say. I dunno, I suspect plenty of heirs don’t want to continue farming anyway, though I do know of a couple sons who have taken over their parents’ farms while the old man is still living.

    Mrs Stitch

    September 10, 2015 at EST am

    • If the farm has appreciated so much in value, by passing it on to children capital gains tax is avoided, so the estate tax stands in for the capital gains tax. Farming isn’t so special that if one makes 20 million dollars at it, it shouldn’t be taxed like other businesses and occupations. But I heard that most private farmers were barely making ends meet and were not multimillionaires.

      Lion of the Blogosphere

      September 10, 2015 at EST am

      • According to the USDA, a farm estate that owed Federal estate tax had net worth of $11.1 million and a tax liability of $1.68 million, paying an average tax rate of 15 percent. However, the average farm was only valued at 4.5M. So less than 3% of farms even paid estate tax. This whole thing about poor farmers losing their farms is a sham. Now, when you consider how much money farmers make in government subsidies it becomes apparent how dishonest the whole argument is. Farmers have a very strong lobby and are very skilled at extorting money from congress. They deserve no more sympathy than hedge fund managers.

        destructure

        September 10, 2015 at EST pm

      • yeah well just sayin’, that’s how they sell it here. So while Lion talks about Richie Rich out in the Hamptons, we’re hearing about Ma and Pa Joad, Grandpa McCoy and so forth.

        Mrs Stitch

        September 10, 2015 at EST pm

  13. “And as I keep pointing out, the children of the super-rich vote overwhelmingly Democratic so they don’t care about the estate tax taking away from their inheritance.”

    People with a few million aren’t super rich and don’t vote overwhelmingly Democratic.

    And since you care about polls, reducing the estate tax generally polls well.

    If I were running things I would get rid of the charitable exemption and use the added revenue to cut the rate.

    James B. Shearer

    September 10, 2015 at EST pm


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