August 18, 2005
Taxation and the Artifical Aristocracy
Since the objective of every market is the creation of wealth and since the power to increase or decrease taxes implies the power to either encourage or discourage economic behavior, tax policies must reward those behaviors that tend to enhance its creation. Conversely, these policies should also prohibit those economic activities that do not facilitate the creation of wealth. In other words, the most logical and effective tax policy would be to tax the most productive economic activities the least, and the least productive economic activities the most. Thus, because income is not homogeneous, our federal income tax policy must consider the nature of that income and adjust the rate of taxation placed upon it according to its relative economic value.
In general terms, people and organizations receive income legally from three disparate sources: earned income from work and labor; earned income from the investment of capital and property; and unearned income from gifts and inheritance. The first activity is the most productive economically, and should be taxed the least. Although it does yield economic benefits, the second activity is less productive than the first, and therefore, should be taxed at a higher rate than the first. The third activity generates no economic productivity whatsoever and should be taxed at a confiscatory rate.
Congress must revise our nation’s tax laws to send a clear signal to its individual and corporate constituents: that the United States values progress over plutocracy and efficiency over inertia. Or, in the words of Alexis de Tocqueville,
"What is important for democracies is not that great fortunes should not exist, but that great fortunes should not remain in the same hands. In that way, there are rich men, but they do not form a class."Thus, Congress must place a lifetime tax-free limit on the amount of unearned income that any person or group can receive from any other person or group at $100,000 and tax any amount in excess of this limit at the rate of 100%. Two exceptions to this policy should be adopted simultaneously, however. First, reasonable child rearing expenses such as food, clothing, shelter, education and healthcare must not qualify as gifts or inheritance. Second, that portion of the deceased's estate that was acquired during a marriage must be transferable to a surviving spouse tax-free. Nevertheless, perpetual cross-generational transfers of massive amounts of unearned wealth are the antitheses of the American dream and must be eliminated.
Because the ownership of massive amounts of property denotes economic power, excessive gifts and inheritance are inherently aristocratic. In a nation where all people are created equal in the eyes of the law, those who possess social, spiritual, political, and military power must acquire that power themselves. Why is economic power exempted from this democratic process? If it is aristocratic to transfer social or political power to one's progeny perpetually through the inheritance of titles of nobility, why is it not equally aristocratic to transfer economic nobility to one's progeny perpetually through the inheritance of massive wealth? If children are not entitled to inherit their parents’ vocations, why are they entitled to inherit the proceeds from those vocations?
In order to prevent the perpetuation of an elite genetic class of citizens based upon the superfluous criteria of familial relationships, the United States Constitution in Article I specifically prevents both the federal government in Section 9 and individual state governments in Section 10 from conferring "Title[s] of Nobility". The transfer of massive amounts of wealth within families is simply the perpetuation of economic titles of nobility based upon genetic criteria.
Forbes magazine publishes a list of the wealthiest people in the world annually. In 2004, twenty-seven of the fifty wealthiest people in the world were Americans and possessed aggregate personal fortunes worth more than $400 billion. Most significantly, fourteen of these twenty-seven richest Americans had acquired their phenomenal wealth simply by inheriting it. Forbes estimated the worth of these fourteen inherited family fortunes at $174 billion, or nearly $12.5 billion per person. Yes, you read that right: that's billion with a "b". Not only does this transfer of massive unearned income perpetuate an economic aristocracy within a society that was intended to prevent the passive genetic transfer of cultural power, it is logical to presume that this tendency will increase as the current owners of self-made fortunes pass their wealth onto their progeny. If the United States is to remain true to raison d'etre as a society in which "all men are created equal" and if each of us possesses an inalienable right to pursue "happiness" equitably, then we must abolish aristocracy in all of its pernicious forms: political, social and economic.
Earning wealth requires activity and effort; receiving it engenders idleness and stagnation. This is why the liberal anti-poverty programs of Lyndon Johnson’s Great Society in the 1960s failed: gifts yield inertia. If providing the indigent with modest amounts of unearned capital (such as welfare payments) and unearned property (such as public housing) is economically counter-productive, isn't it equally counter-productive for the affluent to receive massive amounts of unearned capital and unearned property in the form of gifts and inheritance? If welfare and public housing engender sloth and indolence, why don't gifts and inheritance? Does the source of the unearned property alter its affect upon the recipient? Gifts have less value than earnings because people value that which they have earned much more highly than that which they have been given intrinsically.
Racist and sexist societies classify groups of individuals based upon irrelevant genetic criteria such as race or gender and then inhibit any realistic possibility of economic success for that class of individuals. Massive wealth transfers based upon the equally superfluous genetic criterion of familial lineage are simply the flip side of the same economically inefficient and morally reprehensible coin. Instead of precluding economic success, massive gifts and inheritance ensure it.
Although they disagreed about virtually every issue affecting the nascent United States during their careers, John Adams and Thomas Jefferson, began a remarkable correspondence after they had retired from public life. As these two former presidents discussed and reflected upon the world in which they lived and the nation they had helped to create, the question of the existence of a "natural aristocracy" within a society arose. In 1813, Jefferson wrote,
"I agree with you that there is a natural aristocracy among men. The grounds of this are virtue and talent. . . . There is also an artificial aristocracy, founded on wealth and birth, without either virtue or talents. . . ."In his subsequent letter Adams replied,
"We are now explicitly agreed, in one important point, vizt. That 'there is a natural Aristocracy among men; the grounds of which are Virtue and Talents'. . . .When I consider the weakness, the folly, the Pride, the Vanity, the Selfishness, the Artifice, the low craft and meaning cunning, the want of Principle, the Avarice, the unbounded Ambition, the unfeeling Cruelty of a majority of those (in all Nations) who are allowed an aristocratical [sic] influence; and on the other hand, the Stupidity with which the more numerous multitude, not only become their Dupes, but even love to be Taken in by their Tricks: I feel a stronger disposition to weep at their destiny, than to laugh at their Folly."
Although Jefferson, Adams and their fellow revolutionaries were largely successful in precluding the aristocratic transfer of social and political power within the United States, they were less fortuitous in doing so economically. The United States Congress must complete their journey. Virtue and talent must supercede wealth and birth within every segment of our society. Genetic discrimination, regardless of whether it bestows the economic advantages of aristocracy or the disadvantages of peasantry upon its recipients, is diametrically opposed to America’s cultural maxims of autonomy and the equality of opportunity. It is the antonym of Americanism.
Because the primary economic goal of federal taxation must be to increase the nation’s economic productivity, excessive unearned income in the form of gifts and inheritance must be proscribed. Quite simply, the tax policies of the United States must be predicated upon the principle that Americans deserve to retain as much of the property that they earned through the dint of their labors as possible. Nevertheless, if the principle of deserving to keep what you earn is both economically effective and socially just, then the converse must be equally effective and just: you don’t deserve to keep what you didn't earn.
Posted by Chuck Hanrahan at August 18, 2005 04:22 PMAre you serious Chuck?
I seem to recall a list that mentioned this unfair practice:
1. Abolition of private property
2. Heavy progressive income tax
3. Abolition of rights of inheritance (say, a 51% inheritance tax?)
4. Confiscation of property rights
5. Central Bank
6. Government ownership of communication and transportation
7. Government ownership of factories and agriculture
8. Government control of labor
9. Corporate farms, regional planning
10. Government control of education.
As the rest have already happened, why not make #3 the final nail in the coffin eh?
“you don’t deserve to keep what you didn’t earn”
What about those totally dependent on the govt?
Do they get to keep all the Fed money they didn’t earn?
In masking this to look like an attempt to end aristocracy, you forget one major thing: Most people work their asses off so as to provide a better future for their offspring.
Posted by: kctim at August 18, 2005 06:03 PMChuck,
The implications of what you are suggesting are profound. Sure, as a class warfare issue you could dupe a lot of people into this…until the realize their inheritance money counts, too!
This wouldn’t just effect money, because the “aristocracy” aspect doesn’t. No more heirlooms. No more life insurance. No more “Father & Sons” businesses with the sons inheriting the majority stake in the business after the father departs. No more legacies!!!
I doubt you’re going to get much support for this one. Most people recognize that they can’t take it with them when they go, so part of the drive to earn wealth is to distribute it to those they love once they’re gone.
Sorry, this is well-written and might convince those who don’t realize the implications, but I can’t support you on this in the least.
Posted by: Stephanie at August 18, 2005 06:52 PMChuck, you are absolutely wrong on the your understanding of the primary purpose for federal taxes. It is Not to punish and reward economic activity.
As written into the Constitution and the Laws, the primary purpose of federal taxation is to pay for the spending of government. Period!! All other designs for the use of federal taxes are secondary and not installed into laws of the land.
Obviously, the first and primary purpose of federal taxes is not being fulfilled. Bush and the Republican Congress refuses to increase taxes to pay for their spending. They absolutely refuse to fulfill their most basic fiscal responsibility.
Why? Because like you, they have forgotten the Constitution and the Law they swore to uphold and defend. And their forgetting has led to their believing that social policy is the primary function of federal taxes. This is just one more a hundred reasons we as voters must move toward anti-incumbency at the polls, to rid ourselves of these sclerosis afflicted politician’s who have long ago forgotten why their jobs were even created in the Constitution.
Posted by: David R. Remer at August 18, 2005 09:02 PMChuck,
The third activity generates no economic productivity whatsoever and should be taxed at a confiscatory rate.
So you don’t mind the government taking everythig you worked for and your kids not getting it.
kctim,
In masking this to look like an attempt to end aristocracy, you forget one major thing: Most people work their asses off so as to provide a better future for their offspring.
Right on buddy.
Chuck, you are absolutely wrong on the your understanding of the primary purpose for federal taxes. It is Not to punish and reward economic activity.
David, your scaring me pal, this is the third time I have to agree with you.
Posted by: Ron Brown at August 18, 2005 09:14 PMWhen I went to your list, I noticed something else. Take the top ten. Half of the top ten are Waltons, who helped their father earn their wealth during their own lifetimes. This is an anomaly and I don’t think you could call these guys a hereditary aristocracy. None of the others (Gates, Buffet, Allen, Ellison or Dell) inherited substantial fortunes. All of them (with the partial exception of the Waltons) earned most of the money they have by productive enterprise. All of them (including the Waltons) have money that was earned within the last generation.
These guys have replaces the Gettys, Rockefellers, Fords etc who dominated the list two generations ago.
I don’t much care for inherited wealth either. I think it corrupts. That is one reason it is so hard to maintain it intergenerationally. But the alternative to inheritance is government confiscation. The record of rich guys abusing wealth is bad. The record of government is worse. When government becomes the only source of wealth and power, you get read tyranny.
Experience teaches this. It is better to tolerate little problems than roll them all up into one really big one.
Stephanie,
It’s a pretty poor world if the only thing, or even the most important thing, we want to leave our kids is our money. What would happen if we couldn’t leave them anything but a modest amount?
Heirlooms and insurance would continue to exist (tax free, I might add) up to $100K per child. Father & Son businesses would continue to exist, if the “Son” had the economic wherewithall to purchase the business. And if he didn’t, does he deserve it more than someone who has put his or her nose to the grindstone to earn enough money to buy it? If one genetic criteron, such as family lineage, is valid to permit preferential treatment, are all of them valid? Should whites receive preferential in the ownership of property? Should men? Should Protestants?
David,
Yes, the purpose of taxation is to support the federal government, but I think that you’ve forgotten the fundamental purpose of our government. As written in our Declaration of Independence,
“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. —That to secure these rights, Governments are instituted among Men… .”Thus, if governments are instituted “among Men” to secure our natural rights, then those methods that our government uses to facilitate its existence must do so, as well.
If the equitable pursuit of happiness is a natural right of everyone, how can you condone a self-perpetuating economic aristocracy? Entrenched and inherited wealth is as pernicious as entrenched and inherited poverty.
Social policy is a primary function of government, unless you believe that the phrase in the Preamble that stipultates that one of the primary purposes of our government is “to promote the general welfare” was merely window dressing. I’m hard pressed to see how the cross-generational transfer of massive amounts of wealth promotes the general, rather than the individual, welfare.
Ron,
Yes, I’d like to leave my kids with more than money. I’d like to leave them with a better society and the ability and inclination to pursue and achieve happiness, however they should happen to define it.
Perhaps, looking at it this way might help. Without government, I wouldn’t have any money. Government enables the creation of wealth. If I knew that our government wouldn’t have to tax the productivity of my children while they’re alive so onerously, thereby enabling them to keep more of what they earn because it taxes my productivity after I’m dead and buried, I’d be very happy.
Jack,
Yes, the Waltons are heavily represented on the to ten list of wealthiest people. But I used that only as an example to demonstrate that some people receive millions and billions of dollars due to no reason other than their genetics. When the tycoons of today die, the heirs to their fortunes will repalce the Waltons undoubtedly. Simply beacuse the name has changed from Rockefeller to Walton doesn’t obviate the principle I espouse.
I simply don’t understand how, in a country that is predicated upon self-suffiency and individualsim, sincere people believe that, somehow, their kids deserve a better, not equal, chance to succeed in life than everbody else’s kids.
To paraphrase Jefferson, the Earth belongs to the living, not to the dead.
“I simply don’t understand how, in a country that is predicated upon self-suffiency and individualsim, sincere people believe that, somehow, their kids deserve a better, not equal, chance to succeed in life than everbody else’s kids.”
It’s why you feel terrible when a child is kidnapped and murdered but yet your devastated and your life is ruined when it happens to your own child.
It’s why you will give a child on the street a few bucks to eat so they aren’t hungry but yet you will work multiple jobs or 80 hrs a week so your own child is not hungry.
It’s called love.
Posted by: kctim at August 19, 2005 10:11 AMChuck
Actually, when the names change it does invalidate the argument, or at least modifies it.
You are talking about a hereditary aristocracy. A hereditary aristocracy implies more than one or two generations. The fact that ALL of the top ten trace their big fortunes to no more than about thirty years ago indicates at least that there is a lot of dynamism in the system.
My disagreement with you is less about inherited wealth than about the alternative – government taking private property. The only thing that keeps governments in line is the possibility of alternative sources of power. Only private property has been shown to work to that end. I look down on people whose sole source of wealth is inheritance. But we really don’t have many of these kinds of idle rich in the U.S. Our dynamic system makes it difficult for them to maintain their great wealth without a comensurate ambition or intelligence (Paris Hilton not withstanding).
There is also usefulness in having rich people to invest and contribute to non-government approved causes. Most new ventures will fail. We need someone who will bet his own money on that and not have to justify his mistakes later. Risk adverse government bureaucrats will never approve of anything really new or innovative. They know, as Keynes said “it is better for the reputation to fail conventionally than to succeed unconventionally”.
You also have the practical problems of taxing for the public good. What is the public good will be determined by political pressure groups, government bureaucrats and unelected judges. None of these groups understand much about the business of business and many among them are downright hostile to the idea of making a profit.
To paraphrase that other great economist, your proposal takes the road to serfdom.
Chuck,
27 of the 50 worlds’s wealthiest people are Americans. This is slightly over 50%. Who or what do the balance have in common. I have not researched this but my guess would be that a measurable number of this balance are Sheiks, Emirs or whatever from the Middle East.
I fail to see the relevance of how a person got his money (self earned or inherited) to his deservance of having it and, what bearing any of this would have on taxation.
It seems to me that the wealthiest Americans are also the most benevolent. While it may be in their best interests to donate heavilly, there is certainly a real benefit for the less fortunate.
What is you feeling about the guy who buys a lottery ticket for a dollar and wins 250 million? Is he not deserving?
Posted by: steve smith at August 19, 2005 11:27 AMChuck,
You plan would destroy every family farm in america!
How many people that could come up with 5 million to buy a farm, would have brains enough to run one? Would you invest that much money so you could work 12 hrs a day, 7 days a week, and earn about 100k a year?
Once a farm gets choped in to pieces and sold its gone forever!
A few more socialist tax plans and we can import all our food too. That way when the supply is shut off everyone in the citys could starve to death!
Hell, it might be worth it.
Chuck, where do you see me advocating Aristocracy in America. I am absolutely opposed to HR25 because it repeals the estate taxes and the primary defense against 1) multi-generational Aristocracies and 2) so much accumulation of wealth in so few hands that the nation is choked economically. I also oppose repeal of Capital Gains taxes and fair corporate taxation.
To remind folks that the first and primary reason for taxation is to pay for government expenditures, in no way implies support for a multi=generational Aristocracy which quite frankly would result in another depression eventually just as occured in 1929 when too much wealth had been accumulated into too few hands and not enough wealth available to the population at large to sustain consumption at levels that could support the price of capital.
Posted by: David R. Remer at August 19, 2005 12:58 PMBeagle, that right-wing argument don’t hunt no more. You are either hiding or ignoring the fact that estate taxes can be crafted to preserve small family business including small family farms which are disappearing anyway under GOP support for corporate oligopolic farmers.
Posted by: David R. Remer at August 19, 2005 01:03 PMChuck,
Heirlooms could hold a lot wealth. Great works of art could be heirlooms. Expensive jewlery could be heirlooms. Life insurance is just as “un-earned” as inheritance money is and therefore just as corrupt (under your logic).
“It’s a pretty poor world if the only thing, or even the most important thing, we want to leave our kids is our money.”
Nobody is saying it is, it being the only thing or even the most important thing isn’t the point. It is one of the things that people hope to leave behind. Have you ever had someone die, knowwing they’re going to die, tell you they wish they could leave you more? Between my husband’s family and mine, I’ve lost four grandparents in the last five years. Each and everyone of them had expressed a desire to leave more to their children and grandchildren then they had left to give. The fact that they (3 of the 4) had left less tangible, but more important legacies behind did not negate the fact that they wished they had more monetary worth to give. Now, you want to take that away from them. If it’s only a small amount, doesn’t matter, so long as the person dying is proud to leave it behind to be used by his/her posterity.
So, under your plan, how much would we have had to pay to accept the gift of the $500 tree my husband’s grandmother gave us as a living remembrance of her life and her love for us? As it is now, my mother-in-law, who managed her mother’s will, managed things (legally) so that we didn’t have to pay a thing, since she knew we wouldn’t have been able to accept the gift otherwise. Now, when my husband and I die, and we gift this home to our children, the tree will be an ancestral story for our posterity for generations to come, just so long as the government doesn’t come in and conviscate this house, because, of course, our children didn’t earn it.
Posted by: Stephanie at August 19, 2005 01:30 PMChuck,
“If one genetic criteron, such as family lineage, is valid to permit preferential treatment, are all of them valid? Should whites receive preferential in the ownership of property? Should men? Should Protestants?”
Genetic descendants are not the only ones who receive inheritance. See, that’s the flaw to your arguement. Adopted children receive inheritances. Lovers do, even if they’re not married. The poor family down the street might (country song). Inheritance is determined by the will of the person who owned the stuff, not just by genetic code. The exceptions to that are those who do not leave a will and testament behind, or if the will and testament is effectively disputed.
Posted by: Stephanie at August 19, 2005 02:02 PMkctim,
It’s why you feel terrible when a child is kidnapped and murdered but yet your devastated and your life is ruined when it happens to your own child. It’s why you will give a child on the street a few bucks to eat so they aren’t hungry but yet you will work multiple jobs or 80 hrs a week so your own child is not hungry.It’s called love.
So very true.
Posted by: Stephanie at August 19, 2005 02:21 PMbeagle wrote: “That way when the supply is shut off everyone in the citys could starve to death!
Hell, it might be worth it.”
you know…as much as i disagree with republicans and conservatives, i’ve tried to steer myself off of comments like these that are so callous, so mind numbingly hateful to fellow americans, that it just stuns me when i see people write this stuff.
beagle…how dare you.
disagree with liberal policies, thats fine. spend your life fighting against what i feel are some positive agendas, but leave the “i’m american, f**k all y’all” attitude at the door…
honestly….
Posted by: views at August 19, 2005 04:12 PMDavid, you wrote,
“Beagle, that right-wing argument don’t hunt no more.”
I understand you point very well, under the “current” system there IS a way to pass down a family farm.
Chucks proposal wants to limit everything to 100k. That wont buy a tractor!
You are also correct that we are losing family farms at a dramatic rate right now. Most of the loss of farms now is because of property taxes, and the land is worth farrrr more divieded up and sold than you could ever make by farming it.
Most corp. farms that you speak of, own very little land, they lease it from people that can no longer farm (but don’t want to break it up and sell it), or its Fed. BLM land.
A leased farm is lucky to get enough to pay the property taxes.
Few,(but some) farm kids are willing to work a family farm anymore if its gets passed down to them, much easier to sell it and retire.
I apoligise for saying poeple in the citys can starve, that was uncalled for, and not really how I feel.
I just have too many friends that own family farms that would be destroyed under Chuck’s 100k bill.
Just FYI, my dawgs DO hunt, In fact, one has a coon treed next to the yard right now, And she is on her chain! ( It really pisses her off when they get into her dog food).
Posted by: Beagle at August 19, 2005 04:25 PMcorporate farms are another problem.
see.. a small independant farmer has to pay taxes on all of his land, but the corporate farmers found a loophole, turn every acre into a separate business. thats right, if you have 13,000 acres, you set up 13,000 dummy corps to get the tax breaks per acre…
instead of paying huge taxes on lots of land, you pay less for less land. somehow, thanks to very smart tax guys, this costs the corporate farms alot less than the private farmers.
the private farmer i doubt could incorporate every acre of land he/she owned, the cost of which is quite high.
Posted by: views at August 19, 2005 04:51 PMBeagle said: ” I just have too many friends that own family farms that would be destroyed under Chuck’s 100k bill.”
We agree 100% on this, Beagle. The asset value on the farm should not be the primary determinant factor in estate inheritage consideration. It should be single family ownership and whether it is operating in the red or black on a balance sheet. If it is in the red, then it would be appropriate to assess estate taxes in my opinion in order to head of bankruptcy or public subsidies for an operation which is not solvent.
On the other hand, if it is a single family owned farm and operating in the black, even just barely, no estate taxes should be assessed for the farm or business being passed on to nuclear family (brother, sister, parents or children survivors of the owner).
Posted by: David R. Remer at August 19, 2005 05:00 PMDavid,
TY, we agree.
If farms cant be passed down, the future is bleak for much of our home grown food.
Corp. farms can/and will move to mexico or brazil if they dont get the profits they want.
Family farms wont. We cant tax them off their land.
Posted by: Beagle at August 19, 2005 05:22 PMBeagle,
“Corp. farms can/and will move to mexico or brazil if they dont get the profits they want.”
Not only that, but the quality of food they produce is significantly less. They are more likely to over-use antibiotics, pesticides and unnatural ferilizers. So many people howl about farm subsidies for small time farmers, but they do not realize the alternatives are food shortages or environmental hazzards.
Posted by: Stephanie at August 19, 2005 06:03 PMForget the farm, lots of people will lose their parents house if Chuck gets his way. I know of houses in the ghetto that cost 65K. At 100K you won’t even be able to keep your dad’s house and pickup truck.
Chuck’s ideas are based of invalid assumptions. His first premise, that all labor is equal is wrong. All labor is not equal. Some labor creates product, some labor creates capital. Chuck wants to penalize the people whose labor creates capital, even though labor that creates capital is more productive.
Let’s say Chuck works for 8 hours and makes a ham sandwich. Let’s also say I work for 8 hours and make a machine gives you a ham sandwich whenever you put garbage in it. Under Chuck’s logic my wage should be taken from me in that my income should be taxed at a higher rate than Chuck’s because it comes from selling my ham sandwiches. Thus, even though I am more productive than Chuck I would pay more of my 1st dollar income.
I understand and agree somewhat that if inheritances are simply handed down from generation to generation forever without and proof of ability from the heirs, that is an aristocracy. We disagree in that I think an estate tax of 51% is enough to correct the problem. It redistributes the wealth quickly enough such that if the decendents are idiots they won’t be rich past the 4th or 5th generation no matter how large the estate is.
kctim,
I understand loving your children. What I don’t understand is how you can love your children so much that you want the children of millionaires and billionaires to have a better chance to succeed in life economically than yours.
jack,
I agreed with your assessment of the role of private property in curbing the excesses of governmental power. What I believe that you fail to grasp is that your propery rights end when you die. Deceased property rights are a legal fiction. They were created to prevent the sons of the landed gentry from killing one another upon the demise of the patriarch.
Perhaps this might help. Roe v. Wade was predicated, in large part, on the premise that fetuses are pre-persons. Until we’re born, or can be, we are not protected by the 14th Amendment. If pre-persons are not protected by the Constitution, why are post-persons? If fetusus have no legal rights, including propery rights, why do corpses?
You don’t realize how much economic power is controlled by entrenched wealth. Come to New York City, where I live, and you’ll see it daily. It’s not the dozen or so children of the super-rich; it’s the thousands of phenominally affluent kids from “old money” who treat economic power as a birthright. In the United states, economic success cannot be a birthright, the opportunity to succeed must be.
Finally, how is giving every kid in America an equal chance to succeed, or at least a more equal chance, the “road to serfdom”? Working for the Lord of the Manor seems more like serfdom to me.
steve smith,
I don’t have any problem with gambling. Winnings are earned money.
beagle,
Why would the elimination of inheritance abolish family farms? It would only eliminate the transfer of those farms within families. In fact, it would probably make it easier for families to own farms. It simply would mean that the new owner might be from a different family from the previous owner.
stephanie,
Of course people want to leave their families more material wealth when they die. That’s natural, but it doesn’t make it right or fair or just. What if your parents were nobles? Wouldn’t they want to leave their peerage to you? Simply because they want to, should we reinstitute familial aristocracy? If it doesn’t make sense socially or politically, why does it make sense economically?
Are you saying that your kids deserve your house more than someone who’s worked his or her tail off to buy a home more than your kids who’ve waited around for it to fall into their laps? Which alternative is better for our society and our economy? Which alternative coincides more closely with your definition of America? Perhaps, knowing that they will have to earn it, instead of just inherit it, your kids might be motivated to accumulate enough capital in order buy it. Just like you did.
I don’t care about a $500 tree in your yard, I care about a $500,000,000 gift that perpetuates an economic aristocracy.
Regarding the validity of wills, please see my point to jack about the property rights of the deceased. Why should someone’s adopted kids have a better chance to succeed economically than yours?
Darrius,
Your differentiation eludes me. Labor produces property, either liquid or solid (capital or products). Regardless, my premise won’t take a nickel from you. It will simply redistribute your wealth (and mine and everyone else’s) to society in general after you’re dead so that the living will be able to keep more of what they earn.
You also fail to realize the nature of trusts, which are designed to pay dividends in perpetutity. Many trusts that were established in the 18th century exist today and pay benefits to their heirs. Most importantly, if it’s invalid for the fourth or fifth generation, why is it valid for the first?
Generally,
I couldn’t care less about family farms. Family farms are an anachronism, and if they don’t have a place in our modern economy, so be it. Should we prohibit automobiles to support blacksmiths? Family farms shouldn’t be supported artificially by favorable inheritance laws. If you want to buy a farm, you should do so. Let the market rule. Isn’t that the defintion of capitalism?
You are all missing the big picture. Millions of kids are locked into a cycle of perpetual rural or urban poverty. Do we simply tell them, “Tough luck. You weren’t born into families that owned farms or oil wells or Wal-Marts or whatever, so you’re screwed. You get to start life with one hand tied behind your back”?
How did Ann Richards describe George H. W. Bush? “He was born on third base and thinks he hit a triple”? What about the kids who are born in the dugout or even outside the ballpark? My point is that we should demand that our government, to the best of its ability, ensure that every American kid is born at home plate - your kids, my kids, everybody’s kids - and let the best man or woman win.
Posted by: Chuck Hanrahan at August 19, 2005 10:02 PMCouple of floow-ups:
jack,
How many people leave their fortunes to venture capital firms when they die? I don’t have a problem with massive investments, I have a problem with massive gifts.
David,
Try as I might, I couldn’t find a point of disagreement in your comments. Does that mean we agree?
If you oppose the perpetuation of an economic aristocracy, don’t you have to oppose the cross-generational transfer of massive amounts of wealth, as well? (Farmers notwithstanding, of course.)
Posted by: Chuck Hanrahan at August 19, 2005 10:23 PMChuck,
Let me use my own example. Right now I have three young children with developmental delays. Their original prognosises were not good, and the original doctor who diagnosed my first son recommended institutionalization, but I’ve worked very hard to provide them with what they need to compensate for their disabilities. It is my profound hope that they will grow up to be independent, self-sufficient, productive members of society. And I truly believe this hope can and will be realized.
However, if that is not the case, if I fail, and they must live with me for the rest of my life and be under my care, I’m prepared for that possibility. The problem with that is, that unless I have established sufficient funds for their care after my death, the state will assign my then-adult children into institutions for the rest of their natural lives, where they will not receive what I consider proper care or have the room and encouragement to grow and develop.
Should it be necessary, I will work my tail off to provide them with the financial means to stay independent even after I’m gone.
Your plan would take away that money that I earned for the sake of my children and redistribute it far and wide, probably to help pay for the very institution I don’t want my children living in.
You’re against familial wealth, and yet you don’t care who your grudge against the lazy rich would hurt.
Posted by: Stephanie at August 20, 2005 01:02 AMChuck
The rich guys take the risk government won’t. Often these are “stupid risks” that it would be hard to justify. Besides, if you don’t allow significant inheritance, you will put too much wealth into the hands of bureaucrats.
All men are created equal, but they don’t stay that way very long. People inherit lots of things from their parents. The single best determiner of success in life is intelligence. About half of intelligence is genetic – directly based on inheritance. What about the other half? Parents teach their children the means of success (or not). Should you stop them from helping their kids with good advice?
And once again, we have real practical problems. People who make money tend to be smart, at least about money matters. They will certainly figure out ways to pass their money to those they want to get it. But it will be less economically efficient or honest. You will be enriching lawyer and estate planners, who will be doing nothing productive unless you consider dodging laws productive.
My father was a poor workingman. He hated the rich. I have some of his prejudice still, so I take some pleasure in the class struggle. But I know I am wrong and he was wrong about a lot of things. He told me that the rich were decadent and stupid. This is not the case in the U.S. Of course there are stupid rich guys, but most are well trained, able and effective. Our system is dynamic. We change elites each generation. Look at the top ten and compare it to a list you would have made a generations ago, when the Waltons were running a small store in Arkansas, Gates was just a little ubernerd and Michael Dell was making computers in his dorm room.
While it’s true that income is not homegeneous, taxing different income sources at different rates has some glaring pitfalls.
Taxing:
(1)earned income,
(2)investment income, and
(3)inherited income
…at different levels is will increase:
(a) tax system complexity,
(b) class warefare, resentments, etc.
(c) tax evasion,
(d) could reduce investments that also benefit earned income earners
(e) it destroys small businesses
(f) it will lead to many more rates depending on income type (more complication)
What happened with the:
FairTax plan ? or the
FlatIncomeTaxRate plan ?
Taxing income at different rates is a huge contrast from a few weeks ago while discussing the FairTax or a FlatIncomeTaxRate plan.
If we’re going to tax income and/or consumption, shouldn’t we tax it at the same flat rate for everyone, regardless of the type of income ?
So, someone is wealthy and has a lot of investment income (something we’d all like to have)? Why punish them with a higher tax rate? Afterall, those investments can generate jobs.
Taxing different types of income at different rates seems more like envy and resentment disguised as a claim of equality or fairness.
Posted by: d.a.n at August 20, 2005 10:45 AMd.a.n,
I thought we covered this before. Your posts are far more effective when you use [ ] instead of ( )
Have not seen you posting lately. Welcome back.
Posted by: steve smith at August 20, 2005 11:33 AMsteve,
This is (at least) the second time you’ve done that. Why is [] better than ()?
Posted by: Stephanie at August 20, 2005 11:55 AMOh yeah, I forgot. : ]
Thanks! Yeah … was gone a while; really busy at work. I’m self employeed, so it is sometimes feast or famine.
Posted by: d.a.n at August 20, 2005 12:11 PMIt’s sort of a running joke. Steve Smith once complimented me on my lists and use of bullets. I think (and would agree) the [N] stands out better than (N). Also, it serves as a signature/warning message to other readers that they may want to skip that post.
: )
Posted by: d.a.n at August 20, 2005 12:14 PMStephanie,
As I see it, your issue is with the quality of care provided by the public mental health institutions, not with inheritance.
The bottom line is this: you shouldn’t have to “work your tail off” to provide for your kids out of you own pocket after you’re gone just so some spoiled rich brat can collect a big payday when his or here daddy kicks the bucket. Everyone should have to make his or her own way in the world. For those of us who are physically or mentally unable to do so, every civilized society, which presumably includes even our own, should spare no expense in providing them with the finest quality of healthcare available.
Finally, if the millionaires and billionaires couldn’t provide for their challenged and handicapped adult children after they died with massive trust funds, how long to you think it would take Congress to ensure that every handicapped person received the proper care?
jack,
Actually, you’ve got it backwards. Governments take stupid risks that rich guys won’t. Private venture capital seeks a financial return on its investment; public venture capital doesn’t. For a excellent example, think about NASA and the exploration of outer space.
Nevertheless, I don’t think that many of the super-rich are funding VC firms in their wills. The vast majority of speculative investments are undertaken by living people who anticipate generating profits from them.
Regarding non-monetary inheritance, perhaps that’s my most important point. What would we give our kids if we couldn’t give them more than a modest amount of money? Values? Principles? Morals? Love? At least we couldn’t justify our poor parenting while we we’re alive with a fat inhertience check after we’re gone.
Finally, I don’t have a problem with wealth, per se. The equality of opportunity implies the inequality of results. I simply have a problem with the economic aristocracy created by inhertited wealth.
d.a.n
Welcome back. Hope you EARNED lots of money. :)
How does this proposal increase tax complexity? We already report these types of income on our tax returns. My proposal simply divides income into three types and taxes them at three rates, regardless of the amount of income. If you earned $X, you pay X%. If your investments gained $Y, you pay Y%. If you received $100K or less in gifts or inheritence, you pay nothing; and if you received more than that you pay 100%. The only significant change is that the IRS would have to track these gifts to ensure that the lifetime cap of $100K was not exceeded.
How does it induce class warfare? This proposal would eliminate, rather than perpetuate an aristocratic class (see the quote from de Tocqueville in my posting).
How will knowing that we could keep more of what we earned and that everybody earned what they have increase envy and resentment? I don’t begruge anybody owning what they earned, I begruge them owning what they didn’t earn.
How will it inhibit investment? The dead don’t invest, they distribute.
Will people try to cheat? Sure they will, but you don’t enact only those laws that will be obeyed without enforcement. As you saying that, since so many people drive to fast, we should eliminate speed limits?
How will it hurt small businesses? If anything, it will promote small businesses. You simply won’t be able to give your small business to your kids. If they want it, they’ll have to earn it just like everybody else.
Finally, if you want to reduce tax complexity, let’s start talking about eliminating arcane and superfluous deductions - but that’s another topic for another day.
Posted by: Chuck Hanrahan at August 20, 2005 12:38 PMChuck,
Yes, I’d like to leave my kids with more than money. I’d like to leave them with a better society and the ability and inclination to pursue and achieve happiness, however they should happen to define it.
So then you don’t think your children should get anything that you leave when your gone. Right?
I’d like for my kids and grandkids to inheirt a better world than the one I grew up in. But I still don’t want the government taking what I leave away from them. I haven’t busted my ass all these years to give it to the government to waste on their social programs that fail every time.
Regarding non-monetary inheritance, perhaps that’s my most important point. What would we give our kids if we couldn’t give them more than a modest amount of money? Values? Principles? Morals? Love? At least we couldn’t justify our poor parenting while we we’re alive with a fat inhertience check after we’re gone.
If kids don’t have values, principles, morals, and love before you die, they won’t have them after your dead.
I’ve raised my kids with these and would still like to leave them a few million. They won’t be getting it though.
Just because someone is rich doesn’t mean they’re poor parents.
d.a.n
So, someone is wealthy and has a lot of investment income (something we’d all like to have)? Why punish them with a higher tax rate? Afterall, those investments can generate jobs.
Most likely more than we think. And a whole heap more than those who want to tax that income to death will admit to.
Welcome back.
For anyone that’s put any considerable thought into different tax systems, they will truly appreciate the difficulty of devising a fair tax system; especially, when you have to drag pieces of the old one with you.
How does this proposal increase tax complexity? We already report these types of income on our tax returns. My proposal simply divides income into three types and taxes them at three rates, regardless of the amount of income.Well, three new rates is more complicated. And, it probably won’t stop there. Once we start down that slippery slope, we’ll end up with dozens or hundreds of different tax rates for different types of income, and endless debate about which type of income is more benevolent (and should be taxed less) or more evil (and should be taxed more).
The only significant change is that the IRS would have to track these gifts to ensure that the lifetime cap of $100K was not exceeded.$100K is not much. For inheritance? and/or gifts? That lifetime tracking does start to sound complicated. That will take a huge database. That is increased complexity.
How does it induce class warfare? This proposal would eliminate, rather than perpetuate an aristocratic class (see the quote from de Tocqueville in my posting).I’m not rich, but I believe money is money and taxing at different rates really targets different people. I feel that there is something very fundamentally wrong with that. Also, perpetuating an elitist class is not a result of insufficient taxation, as much as a government that voters have allowed to become elitist and influenced by some that abuse wealth and power. The people could easily restore the balance of power (not just shift it) if they’d start voting differently, and stop empowering them to continue to use and abuse and be fiscally irresponsible.
How will knowing that we could keep more of what we earned and that everybody earned what they have increase envy and resentment? I don’t begruge anybody owning what they earned, I begruge them owning what they didn’t earn.I don’t. Why begrudge any person for not earning their wealth? So they are merely lucky in one respect. But, one person’s luck does not justify a new tax, law, or litigation. Some things just are what they are, and it’s not my right, or the government’s right to take it away from any person via a much higher income tax rate, and give it to someone else. What anyone receives from a relative (gift or inheritence) is not a crime against anyone else. So, why should others be so concerned about the wealth or inheritance of someone else? I don’t like the idea of government or anyone having the power to seize what a parent leaves to children and relatives. It wreaks of too much government control, too much wealth redistribution, and too much government, Money is money. Why not simply tax inheritance like any other income and, preferably, tax all income at the same rate ?
How will it inhibit investment? The dead don’t invest, they distribute.It inhibits investment because the government will get the money (death tax) and spend it. I’m not sure that’s a good investment. Government will use it to grow ever larger. The government does not need more money.
Will people try to cheat? Sure they will, but you don’t enact only those laws that will be obeyed without enforcement. As you saying that, since so many people drive to fast, we should eliminate speed limits?The more complicated it gets, the easier it is to cheat (like all the deductions and loop holes we have now in the tax system).
How will it hurt small businesses? If anything, it will promote small businesses. You simply won’t be able to give your small business to your kids. If they want it, they’ll have to earn it just like everybody else.That’s not for government to decide. Still, many small businesses currently are forced to liquidate and shut down due to high estate/inheritance/death taxes.
Finally, if you want to reduce tax complexity, let’s start talking about eliminating arcane and superfluous deductions - but that’s another topic for another day.Yes! If only they’d do that one thing, it would help a lot. But they like it that way, it’s easy to abuse, so it’s unlikely to be fixed.
Also, many of these taxation problems and ideas would all become unnecessary if the tax rates weren’t already so high, and if we didn’t have such an bloated government.
We can not have fair taxation until taxes and government are much much smaller (as they should be).
In 1930, federal taxes were 3% of GDP. Now, federal taxes are 20% of GDP. That’s the real problem. A fat, bloated, arrogant, corrupt, intrusive, wasteful, fiscally irresponsible federal government that continues to grow to nightmare proportions.
d.a.n
We already have three rates for income taxes: one for earned income, one for captial gains and one for estates & gifts. I’m just saying that, from the prespectives of both fairness and productivity, they’re bass ackwards.
We tax the most productive activity (earning money) the most and the least productive activity (receiving money) the least. Our tax system doesn’t reward productivity, it rewards entrenched wealth.
As far as money being money, you’re just plain wrong. There’s a huge difference between having it and getting it. Having it is inert; it doesn’t do our economy a bit of good. Getting it is what our economy is all about. So why does our tax system reward those who have and punish those who get? Shouldn’t it be the other way around?
Posted by: Chuck Hanrahan at August 20, 2005 04:12 PMChuck, I think you mean well by trying to tax different income at different rates, and many will agree that the logic (i.e. not all income is not homogeneous) sounds plausible.
However, money, no matter who spends, saves, invests, and/or earns it, all serve to fuel the economy. So, money is money is not just a cliche. It may be a mistake to hold a grudge or resent those with more wealth that they did not create themselves (i.e. inherited, gift, lottery prize, etc.). It may be what we (I do) resent is how some wealthy use and abuse their vast wealth to influence government. When 5% of the wealthy have 59% of all wealth in the U.S., the other 95% obviously don’t have as loud a voice. And it shows. It shows in our:
[1] ridiculously abused, riddled, over-complicated tax system;
[2] corporate / investor fraud, plundered pensions;
[3] abused Presidential pardons,
[4] federal government pork-barrel, waste;
[5] senators writing hot checks at the tax payer’s expense;
[6] $5000 for gold embossed playing cards for Air Force One;
[7] election fraud and main parties blocking access to 3rd party candidates;
[8] federal fiscal irresponsibility;
We see all these things daily, and we should eventually realize the system is broken at the core.
But, instead, we sense the futility of attacking the core problem, and focus on the fringes; but unsuccessfully.
Real change will be unlikely until without ever focusing on the core problem. Then, many of the fringe problems will most likely resolve themselves.
________________________
Thanks Ron Brown. Yes, perhaps bloated and fiscally irresponsible federal government clouds my opinion, but handing over all that wealth to government (as if they deserved it more) is like giving alcohol to an alcoholic. Especially when the federal government already has plenty. It already receives $2.2 trillion per year. If it can’t operate responsibly on that, then the problem is not enough revenue. It’s a fiscally irresponsible government, that is rotten to the core.
But, it’s not only because government is full of bad people.
It’s also because those people are trapped within a bad system.
Any one of us, thrown into the same corrupt system, would probably also become corrupt, or isolated.
We already have three rates for income taxes: one for earned income, one for captial gains and one for estates & gifts. I’m just saying that, from the prespectives of both fairness and productivity, they’re bass ackwards.
Oh! Yes, you are correct about that!
Posted by: d.a.n at August 20, 2005 04:29 PMd.a.n.,
I see. I was just curious. And, you’re right. It certainly is a signature mark for you. :-) I always know I’m going to get something interesting when I see it.
Posted by: Stephanie at August 20, 2005 04:50 PMChuck,
“…how long to you think it would take Congress to ensure that every handicapped person received the proper care?”
You miss the point. Proper care can’t be bought. “Care” can’t be paid for. The way our employment laws work an employee can’t be fired just because they don’t care (like with teachers) as long as they go through the motions. But, it takes more than “going through the motions” to make a difference in peoples lives, handicapped or disabled people included.
Money is hardly the only issue with mental health facilities (my children would be in a facility for the developmentally disabled, which is only a little bit different, but different nonetheless). Lack of qualified staff is also a serious issue. High burn-out rates is also a serious issue. While more money can and would help solve some of these shortages, lack of people power isn’t necessarily going to be solved just because there’s more money. People are good at this kind of job because they want to do it, not because of the pay it provides. Oh, and proper over-sight is a serious issue as well, one that could and should be addressed at the federal level.
Posted by: Stephanie at August 20, 2005 05:10 PMChuck,
“You simply won’t be able to give your small business to your kids. If they want it, they’ll have to earn it just like everybody else.”
1) Most adult-children (that I know) who inherit their parent’s small business do buy it to avoid paying gift taxes.
2) All the adult-children I know worked very hard at that very business for all or most of their lives, usually working harder than any other employee. One can naturally assume that their efforts improved the worth of the company, and thus they did “earn” it.
Posted by: Stephanie at August 20, 2005 06:28 PMChuck,
“Having it is inert; it doesn’t do our economy a bit of good. Getting it is what our economy is all about.”
Keeping it is inert. Getting it is what counts. The adult-children who inherit money are just getting it. They have new resources to spend and will come up with new reasons to spend it. By your own logic, it’s not inheriting money that’s the problem, it’s saving money that’s the problem. Take your $100,000 thing and apply it to savings. That’s where money is inert.
Posted by: Stephanie at August 20, 2005 06:38 PMChuck,
Yes, you are correct. Earned wealth should not be taxed at a rate higher than investment and inherited income. That is lop-sided as hell !
It’s the part about taxing each type differently at all that should be eliminated.
I’d personally prefer all income were simply taxed at the same flat rate, and no one pays any taxes until their income exceeds the annual poverty level.
Regarding the phrase: money is money
You’re correct that having it and getting it are different. But, it all spends the same and all fuels the economy. Even saved money earns interest, and later may go to different types of investments, that also fuel the economy. Besides, there’s probably not near enough saving for retirement in this country anyway.
Perhaps, the phrase (money is money) is too vulnerable to semantics ?
The real issue is fair taxation without discriminating against any wealth class or any type of income, and not appointing the government or ourselves to judge whether someone deserves their money.
Also, most Americans overwhelmingly agree it is wrong to tax property and earnings that have already been taxed before. 70% of businesses never make it past the first generation because of death tax rates, and the tax is the leading cause of dissolution for most small businesses.
91% of all businesses in America are family owned.
Some inheritance taxes are extremely high (50 to 60% depending on the state).
That’s a perfect example of legal plunder.
The law has been perverted to do the very thing it was originally supposed to prevent.
We’ve all been over taxed for so long, we don’t even know what a fair tax is any more. And before Ronald Reagan, there was a top income tax bracket of 90% ? Now, the top income tax bracket is 37% ? That better, but still ridiculous. How about 10% ? If government can’t operate on 10% , then they’re doing something terribly wrong (and they are).
Federal tax should never be more than 10% of GDP, which would be about 11% of all tax revenues. But, unfortunately, federal tax revenues are now 20% of GDP. And, pay-as-you-go Social Security and Medicare already consume 9% of GDP (almost 50% of all federal tax revenues). That wouldn’t be the case if the funds that were supposed to be there had not been plundered. And now, each generation steals from the future generation ?
________
Stephanie, You are kind. Thanks!
d.a.n. wrote,
We see all these things daily, and we should eventually realize the system is broken at the core.
But, instead, we sense the futility of attacking the core problem, and focus on the fringes; but unsuccessfully.
Real change will be unlikely until without ever focusing on the core problem. Then, many of the fringe problems will most likely resolve themselves.
The core of the problem is corupt politicians that abuse the systems and let their million dollar contribters abuse it.
Election reform, and I mean TRUE election reform its oe way to stop it. But we won’t get that until the politicians get the message that the voters (you know the people who can fire them) are fed up with their bullshit.
Starting with this next election we need to vote out everyone connected to the two main parties and vote in only fisical conservitives.
If we keep doing this then the abuses will quit and maybe we can get some true election reform and the ony kind of fair tax system there is.
A flat rate income tax that has no loop holes and EVERYONE PAYS. This would include the weathy as well as the welfare class.
CORRECTION to last paragraph:
Posted by: d.a.n at August 20, 2005 07:09 PM
Federal tax should never be more than 10% of GDP, which would be about 11% of GDP. But, unfortunately, federal tax revenues are now 20% of GDP.
d.a.n.,
Try again. How can 10% of GDP be 11% of GDP?
Posted by: Stephanie at August 20, 2005 07:28 PMRon Brown,
I am 1000% in agreement with you.
Unfortunately, I afraid when the people finally get fed up, they won’t resort to simply vote out all incumbents. They’ll probably resort to civil unrest, and then we’ll all be losers.
And such civil unrest may be unnecessary, since there may be a peaceful way to give government a wake-up-call.
Ironically, voters’ votes are the one thing that might restore a balance of power (not simply shift it), if voters stopped voting for the main party bigots that have severely limited their voting choices (by design).
And, the point is not that 3rd party or independent candidates are smarter, or more honest. The point is that politicians will want to be re-elected, and that should happen only if they start solving problems and creating a more fair and just government.
Also, voters should recall some politicians if they continue to behave irresponsibly (like they recalled Gray Davis in California).
There is also one other danger. If the people continue to simply vote for politicians that promise them entitlements, prescription drugs, health care, and perpetuate the myth that we can all live at the expense of everyone else, we’ll go bankrupt very quickly. We’re almost there now.
Posted by: d.a.n at August 20, 2005 07:33 PMHa! Ha! Ha! Thanks Stephanie.
I meant:
GDP is about $11.5 trillion.
Federal tax should never be more than 10% of GDP, which would be about $1.15 trillion. But, unfortunately, federal tax revenues are now almost 20% of GDP, which is over $2.2 trillion.
What’s amazing is that the federal government can collect so much annually ($2.2 trillion), spend it all, plunder part of Social Security, mismanage Medicare, have a $400 billion deficit in the GPBC pensions, and a $8 trillion National Debt too. But, I could be all wrong about all that. Most economic forecasters are predicting good things for the future.
d.a.n.,
I don’t think you’re wrong, that’s the scary thing.
Posted by: Stephanie at August 20, 2005 07:48 PMd.a.n.
Unfortunately, I afraid when the people finally get fed up, they won’t resort to simply vote out all incumbents. They’ll probably resort to civil unrest, and then we’ll all be losers.
And that scares the crap out of me.
Recalling politicians is a very good way to get the message across.
I agree with you on every thing else you said too.
Ron & d.a.n.,
Unless I’m mistaken (quite possibly so), it’s a difficult task to recall an elected official. I hear threats of impeachment regularly at various levels of government, but they rarely amount to anything more than a threat. (BTW, anyone knows of a petition to impeach Jim Doyle, I’d gladly sign it!)
Posted by: Stephanie at August 21, 2005 03:13 AMYes, it’s not easy to recall anyone.
There usually needs to be great dissatisfaction,
big problemss, deficits, and dysfunction, like
what existed in California, which led to Gray Davis being unseated.
I haven’t heard a lot about Jim Doyle (not down here in Texas), but he seemed to be strong on education which made most happy. However, many didn’t like cuts to the Medicaid budget, Health and Family Services by $260 million, and dealing with a $1.6 billion deficit.
But, Doyle’s biggest blunder seems to be that he campaigned to freeze property taxes, and then then vetoed it ? Or, replaced it with some plan that really wouldn’t limit property tax increases at all ? Sounds flip-floppy, and his proposed budget doesn’t quite make sense, which may not fool enough Wisconsin taxpayers.
Why would you like Doyle recalled ?
d.a.n.,
He hasn’t fulfilled any of his promises at all.
He may have seemed strong on education before, but he blundered that, going after 4-year-old kindergarten and choice programs instead of working on the system that he originally called a problem.
He promised not to raise taxes, but instead raised just about every fee (auto registration, fishing liscense, ect.), which amounts to the same thing. And Wisconsin is already over-taxed as it is.
He did veto the property tax freeze.
He cut all the budgets for individuals with special needs (disabled in their home, disabled out of their home, elderly in nursing homes, ect.) across the board.
And he signed a unending pact with the Native tribes for their gambling money to make up for his shortfalls. (Last I heard the courts are still trying to determine if that’s even legal.)
He still hasn’t reduced spending in any tangible way, because he keeps pouring the money he steals from other programs into pet projects.
Shall I go on?
Posted by: Stephanie at August 21, 2005 12:57 PMSomewhere, it also stated that property taxes have increased each year since (in Wisconsin).
It’s infuriating when elected officials break promises.
I was amazed when Bush 41 said: “Read my lips. No new taxes.”, and then did not veto a bill with new taxes.
d.a.n.,
A year into Doyle’s election I was already disgusted in his approach (I forget all the reasons why and am not going to take the time to look up my political clippings if you don’t mind. :-)) People I worked with regularly said things like, “Give him time, he’ll put the funds back.” or “He was handed a crisis situation. It’s not like he can make things worse.”
Now all the people who were making excuses for him are on the same band-wagon as I am. Not even the anti-Bush people have seen that kind of turn-around over to their side.
Posted by: Stephanie at August 21, 2005 03:42 PMChuck,
Darrius,Your differentiation eludes me. Labor produces property, either liquid or solid (capital or products). Regardless, my premise won’t take a nickel from you. It will simply redistribute your wealth (and mine and everyone else’s) to society in general after you’re dead so that the living will be able to keep more of what they earn.
You also fail to realize the nature of trusts, which are designed to pay dividends in perpetutity. Many trusts that were established in the 18th century exist today and pay benefits to their heirs. Most importantly, if it’s invalid for the fourth or fifth generation, why is it valid for the first?
Posted by: Chuck Hanrahan at August 19, 2005 10:02 PM
You said that income from investment and capital should be taxed at higher rates than income from labor. In my example my income would come not from the sale of my machine but rather from the sale of my ham sandwiches, and from the collection of garbage. In other words I make money from owning capital (the machine), not from running the machine. You would tax me at a higher rate because I was smart enough to make the machine. You penalize me for being smarter and more productive.
Your proposal is not possible in a free society. If you had your way the government would intervene and tell me I could not take my money (no matter how I earned it) and give it to my own children while I was alive. If I wanted to give my son and his wife a $500K home with my ham sandwich profits, you and the government would stop that. Is it fair for people who couldn’t earn as much money as I could, to tell me what to do with my money once I have it?
Next you would interfere with the running of my business in order to enforce your inheritance laws. When I give my daughter a job at my ham sandwich company and pay her 6 million dollars a year for answering the phone, here come you and the government running my business, telling me I can’t pay her that much. When I give my son’s lanscaping business 100K for cutting the yard, here comes the government telling me I can’t do that.
Here is question for you. My daughter, who is lazy and has never worked, has a son. Am I allowed to take my ham sandwich profits and send him to Harvard? This is not even my son. His parents are worthless. I have several employees who have worked hard for years and can’t send their children to Harvard. Does my grandson deserve a better education than their children? Is that right?
Another important point you are overlooking is that when I die the millions of people in governmment do not deserve to own my machine either. What gives them any right to my possessions at all? Whether my property goes to my children or to my country it is still going to people who didn’t earn it.
In order to do what you propose the government would have to monitor, control, and set perameters for every economic decision (read “Communism”). Is that efficient economic behavior, for the less talented to make decisions with wealth they don’t have the skill and drive to accumulate?
P.S.
In the US there is a rule specifically designed to prevent trusts from lasting forever. It is called the rule against perpetuities. It says that a trust can only last as long as a life currently in being + 99 years.
Posted by: Darrius at August 22, 2005 01:14 PMChuck, good post.
Although I believe your idea needs to be brought to bear on The Market as Social Policy, I do understand why our government has to and should tax those citizens who like Mr. Scoorge want to be able to counts the cions. That is not the role of taxes on the Federal Level. However, because it has a great effect on our global economics than the SEC should impose on the Market that Ideology.
For example, since the 70’s America and the World has known that our Oil Supply is limited. While profits drives the Market to move, our government should place into policy a plan that creates an Energy Free Society. Releasing $3-500.00 per month plus on the Market and the policy that makes it clear that The Oil Baron’s of The World must invest in the new technology or risk clear disinvestment in the Market is a clear matter of chioce at that point. Other than that Our Government by Constitutional Law can outlaw them.
Posted by: Henry Schlatman at August 22, 2005 10:07 PMWhen will the younger Americans discover
they’ve been had?
They’ve been paying a hefty 15.3% of their income, but they’ll never see a penny of it.
When 77 million baby boomers retire and live longer, there will only be 5 workers for every 4 retirees collecting Social Security and Medicare/Medicaid.
Inevitably, government will have to increase taxes and decrease entitlements, pitting the elderly against the young, essentially, committing fiscal child abuse.
And, both will be too blind and distracted (as usual) to see that it was their government (controlled by a few with vast wealth and power) that screwed them.
