[kenberg]

I have no quarrel with paying taxes, and I have no quarrel with the rich. It seems reasonable to me that some reasonable but not confiscatory estate tax, one that kicks in at a fairly high level (subjective terms, I know) is reasonable. I feel immensely lucky to have lived in this time and place and I think that those who have lived luxurious lives could acknowledge their good fortune by not insisting on nailing down every loose buck. They may think that their wealth is all their own doing and they owe no one anything. They need to rethink that. Even if they were not born into wealth they were born in a country that provides education and other support, and provides opportunity for them to use the talent that has made them rich. Bitching about having to fork over some taxes to help those who come after them is tacky.

[blackshoe]

Why do we have to have taxes?

[Hanoi5]

Quote

Why do we have to have taxes?

Some people need governments and we all have to pay for them.

[Lobowolf]

mikeh, on Jan 2 2010, 02:55 AM, said:

I get amused (or bemused) every time I read someone characterizing taxation as 'the government' taking money.

The government is 'us', folks...at least in a democracy. And 'we' have all kinds of services that we demand from ourselves.

We demand clean water, reasonably clean air, highways, airports, railways, electricity, hospitals, police, fire, social services, court systems, city and state maintenance workers, air traffic controllers, garbage and sewage disposal, education, parks, building codes, and on and on and on...

The exact mix that we demand from ourselves, in the form of government services, varies from country to country....but all societies that have governments provide some services to themselves, and these require money.

When we pay tax, we are contributing to the cost of our society...not paying some arms-length superimposed bogeyman.

If you are concerned about taxation, then get involved in the democratic process....anyone who sits on the sidelines and complains about 'them', in the form of government, without being politically active, doesn't deserve much attention, imo.

As for estate tax...why not? The heirs didn't earn one penny of the money being left to them....and that money was usually acquired by making use of the services provided by government...since we HAVE to have taxes....why not tax the dead? Would you rather pay more tax while alive?

Quote

I get amused (or bemused) every time I read someone characterizing taxation as 'the government' taking money.

I can relate to that. I get rather amused every time I hear taxation characterized as something other than "the government taking money."

Quote

The government is 'us', folks...at least in a democracy. And 'we' have all kinds of services that we demand from ourselves.

We demand clean water, reasonably clean air, highways, airports, railways, electricity, hospitals, police, fire, social services, court systems, city and state maintenance workers, air traffic controllers, garbage and sewage disposal, education, parks, building codes, and on and on and on...

And money is also spent on a host of things that many (and often most) of us don't support, let alone demand.

But, of course, the discussion isn't whether the government can or should tax people to provides services; it's how much money it should take, and from whom, and in what context. Surely, it would specious to reply to complaints about, say a 99% income tax by saying, "Well, gee, don't you want roads without potholes and clean water?"

Quote

If you are concerned about taxation, then get involved in the democratic process....anyone who sits on the sidelines and complains about 'them', in the form of government, without being politically active, doesn't deserve much attention, imo.

Whether or not to pay "attention," implies that there was something to pay attention to, e.g. an internet post in a forum read by reasonably intelligent people, or a statement made in the presence of others, i.e. participation in the ongoing political debate. I would construe such commentary as "being politically active," along with, for instance, voting.

Quote

As for estate tax...why not? The heirs didn't earn one penny of the money being left to them....and that money was usually acquired by making use of the services provided by government

It was also usually acquired by someone who's already paid income taxes on it, and if a corporation was involved, corporate taxes were paid prior to that, and depending on the corporation, sales taxes were paid along the way, too.

As someone else pointed out, the money could have been saved by someone who lived frugally in order to provide for his/her children. Or someone who wisely chose not to have children he/she couldn't afford. It could have been saved to pay for his/her children's college (subject to a gift tax exemption, btw). Take 2 next-door neighbors in equal financial positions. They're both permitted to pretty much pass their money along as they see fit (including to charity, btw, not just their lazy children). They have people and causes they care about, and money that they've managed not to lose, waste, or spend. Then one day, a drunk driver kills one of them. Now the government says, "Well, the other guy can choose the disposition of his money, but we'll now take half of the first guy's money." As a society, we recognize a right to disposition of assets after death, or we'd just have 100% reversion to the state, not wills and testaments; so a huge cut based on death seems random and extreme.

Quote

Would you rather pay more tax while alive?

No, I'd rather there were less government spending. In addition to clean water and fire departments (i.e. the things we pretty much all agree on), there are all sorts of other things that are the subject of rational debate, whether it's "free" health care, wars in the Middle East, studies about the mating habits of dung beetles, public tuition (and college residency discounts) to people in the country illegally, abstinence programs, and more. Regardless of the specifics (everyone has his/her own favorites and the ones that he/she finds highly objectionable), I'd take the position that if we can't pay for everything without taking half of the assets of everyone who kicks off, then the discussion should center around which of those goods and services are actually necessary.

Analogistically, I'd like a Ferrari. Maybe not as much as clean water, but I'd like one. A lot. I could steal from people and get a Ferrari, but I don't think that's an appropriate way to obtain money. I limit my income to what I consider appropriate means of acquisition, and as a necessary consequence (since *I* can't borrow trillions of dollars), I limit the things I spend money on, accordingly. Similarly, I think a massive estate tax is an inappropriate means of obtaining money to run "the government." And yes, I do know that "the government" is comprised of people just like you and me.

[blackshoe]

Hanoi5, on Jan 2 2010, 10:41 AM, said:

Quote

Why do we have to have taxes?

Some people need governments and we all have to pay for them.

Again, why?

"Because" is not an answer.

[blackshoe]

It occurs to me that one thing, at least, that causes an economy to grow is private investment. The more money we have to pay in taxes, the less we have for private investment, so that will slow (stall?) the growth of the economy.

Maybe a growing or fast(er) growing economy is a Bad Thing™.

[jdonn]

blackshoe, on Jan 2 2010, 10:38 AM, said:

Why do we have to have taxes?

Because there are services society needs, or (much of society) wants, that won't exist unless they can be paid for. If you think there is a way to get them paid for without requiring society to pay for them, you probably should read this.

blackshoe, on Jan 2 2010, 11:43 AM, said:

It occurs to me that one thing, at least, that causes an economy to grow is private investment. The more money we have to pay in taxes, the less we have for private investment, so that will slow (stall?) the growth of the economy.

Maybe a growing or fast(er) growing economy is a Bad Thing™.

It occurs to me that one thing, at least, that causes me to live longer is police protecting me from being killed. The more money we privately invest, the less we have for police to protect me from being killed, so that will decrease (stall?) the length of my life.

Maybe an extended or long(er) life is a Bad Thing™.

What is the point of this argument? I think we can all agree that money used for one thing can not be used for another? But we have more than one priority. Hmmm.

[mike777]

Good point, I agree.

There is definitely a trade off between risk and reward or as others put it government keeping me more safe but with less freedom or growth.


Denmark has very high taxes but it is also called the happiest country on earth.

[Winstonm]

The vast, vast preponderance of US spending is concentrated among Defense, Medicare, and Social Security.

Any meaningful savings in government spending must be addressed in these three areas - anything else is simply wishful thinking.

[mike777]

Meaningful savings......government spending....hmmmm

Ok I am for both.

[blackshoe]

I don't think the assertion "the police protect me from being killed" is true. Even if it is, it does not necessarily follow that the police need to be funded through taxes.

[jdonn]

blackshoe, on Jan 2 2010, 12:12 PM, said:

I don't think the assertion "the police protect me from being killed" is true. Even if it is, it does not necessarily follow that the police need to be funded through taxes.

It also does not necessarily follow that the only way to grow the economy is through private investment. But ok if police don't have to be funded through taxes, please suggest an alternative.

And obviously the specifics of my point were on some level facetious, the point being we have more than one priority, and frankly 'growing the economy' is not my biggest one.

Also, btw, everyone in jail who would kill someone if they weren't in jail is an example of the police protecting someone from being killed. They got to jail somehow...

[blackshoe]

Yeah. There was a trial, with a judge, and a jury, most likely.

I didn't say that private investment was the only way to grow the economy.

Okay, there are priorities. One of mine is "that government governs best which governs least". I sense in this forum a feeling or belief that certain services must be provided by government, and that the only way to fund those things is through taxes. I think both of those premises deserve a close examination.

An alternative to funding the police through taxes? Privatize the police function. Note: you asked for an alternative, this is one. Whether (or how well) it will work is another question. I can give one example, though. Before J. Edgar Hoover conducted his (successful) campaign to accrue more power to the FBI, that agency was established and intended to provide (only) investigative services to local and state police forces. It was funded through federal taxes, but could just as easily have been funded on a "pay as you go" basis by its customers (the aforementioned local police). The question of where the police forces would get the money for that is a separate issue.

I suppose it boils down to "what are the legitimate functions of government?" Followed then by "how do we fund those functions?" As to the first, my list is a lot shorter than Washington's. As to the second, taxes is not the only way, and probably not the best way.

[hrothgar]

blackshoe, on Jan 2 2010, 08:45 PM, said:

I sense in this forum a feeling or belief that certain services must be provided by government, and that the only way to fund those things is through taxes. I think both of those premises deserve a close examination.

Ed, I'd like to make you - or anyone else on these forums - a deal...

Let's start a book club.
I'll pick a good intro level text book on public economics.
We can walk through a chapter or so a week.
I'll be happy to answer questions, help with mathematical derivations, you name it.

If you're seriously interested in having a meaningful discussion about these sorts of topics this is the standard starting point.

[jdonn]

Yes let's privatize the police, so only people who can afford it get police protection. It worked so well for the current health care system.

blackshoe, on Jan 2 2010, 12:45 PM, said:

I sense in this forum a feeling or belief that certain services must be provided by government, and that the only way to fund those things is through taxes. I think both of those premises deserve a close examination.

I mean seriously you keep saying stuff like this without offering up any (serious) alternatives!

[helene_t]

FWIW I think abandoning gvt spending on police, justice and education would reduce economic growth. I might be wrong, though.

I consider it plausible that abandoning gvt spending on military and health care would encourage growth, though, at least in the short run.

Not sure about infrastructure, For the most part I suppose roads and utilities could be left to the market, but not entirely.

[Winstonm]

If you privatize police, you grant greater access to capital and less to the proletariat. These are the ideas that led to revolutions.

[hotShot]

Are those guys that come into the shops to collect a protection fee, not private policemen?

[mikeh]

blackshoe, on Jan 2 2010, 11:34 AM, said:

Hanoi5, on Jan 2 2010, 10:41 AM, said:

Quote

Why do we have to have taxes?

Some people need governments and we all have to pay for them.

Again, why?

"Because" is not an answer.

I don't pretend to 'know' all of the answers, but certainly there are a number of factors that suggest that we, as humans, 'need' government.

As far as anthropologists seem to have discovered, all humans live in groups...we are social animals, as are our closest relatives in the great ape species (yes, I know that there are differences between some of the species in their behaviours). Of course there are creationist loonies (and I use the term intentionally) who won't let evidence impact their worldview. But even they must surely accept that man has always gathered and lived in groups.

And within those groups, there are always social hierarchies....someone is on top...the chief...and as the groups get bigger, and involve more and more families or groups of families, the structure grows more complex. Those in charge take from those over whom they have power. In exchange, they offer services, such as forms of justice, direction of communal effort (say, irrigation projects, or defence or offence) and so on.

As tribes become nations, the power structure becomes ever more complex.

The reality appears to be that government is an emergent property of the way humans think. It seems to be the result of the way we and our ancestral species evolved as social animals.

Libertarian fantasies are no more reflective of human reality than were the communist principles of marx and lenin. They believed in the malleability of man..that man could be changed into a sharing animal..with no need for a power structure or government...the initial revolutionary government was needed in order to bring about this change in human nature....and it would then wither away. Except that practice somehow didn't mesh with theory.

One tiny glimpse into the fallacies of libertarian philosophy was afforded by the Bush era deregulation of the securities industry, when the SEC waived a number of long-standing protective rules, and allowed the players to self-certify compliance with others....the financial disasters of the last couple of years were the result of allowing the market to govern policy.

Other countries that did not adopt such a laissez-faire attitude have already emerges from the recession. Indeed, the major Canadian banks, heavily regulated, have prospered, acquiring significant US assets at bargain prices, with none of them failing and few financial businesses requiring any government aid.

So government seems to be the natural outgrowth of our social nature, and we try to ignore that at our peril.

[Mbodell]

barmar, on Jan 1 2010, 09:56 PM, said:

The problem is that they didn't index it, and the popularity of mutual funds allowed more and more middle income people to invest well, so now many middle class taxpayers have found themselves with estates subject to the tax.

You have a different definition of "middle class" and "many" than I do.

Last year your first $3.5 million of estate paid no taxes at all. And even once everything goes back to the old ways your first $1 million of estate pays no taxes at all.

And even looking back at 2004 numbers (pre peak of bubble, but folks doing better than now), if you were in the 80-89.9 percentile your median family wealth was 313K and in the 90-100 percentile the median family wealth was 924K. So only the top 5% of families have household net worth to even clear the old lowest estate tax exemption. And while it is true that people are wealthier, generally, when they are older (up to a point) and also die more when they are older, the demographic that is wealthiest is the households with head of household between 55-64 (I.e., just about to retire) and their median wealth amount is 249K. The distribution is a skewed one as the very, very wealthy effect the curve as the mean wealth for this demographic is 844K.

In 2007 (exemption $2 million) about 2.4 million people died in the US. That is 2.4 million people leaving estates. Only 14,700 owed any estate taxes at all! That is just 1 in 163. In 2009 (exemption $3 million) only 5,500 will owe any estate taxes (around 1 in 436). Even in 2011 when it goes back to $1 million it is estimated that only 44,200 will owe any estate taxes (about 1 in 54). And most of those who owe anything, will not owe much.

So this effects somewhere in the neighborhood of the top 2% of families who die to less than the top 0.5% of families that dies (depending on if you count 2007-2009 or an unadjusted 2011 and on).

Something that effects only a few thousand Americans a year doesn't seem like many to me.

And something that only effects the top 0.5 to 2% wealthiest of all families is not "middle class" to me. (The median family wealth, in case I wasn't clear, is measured in 5 figures, not 7).