If the Democrats just had some balls...

[Dreadnaught]

I think that's a bit silly. The estate tax is a double-tax. It incentivizes the concealing and shunting of wealth, and even incentivizes people to declare themselves "wealthy enough" to not pursue even more success because they don't want to be double-taxed for income and passing on wealth to their kids.

People who accumulate wealth don't just sit on bags of gold in a warehouse. They keep it invested and let the bankers allocate it to potential new opportunities. Or they put money in charitable causes that interest them. Or they blow it all on stupid stuff and other benefit from that spending.

But more importantly, an estate tax rests on really silly notions of what is an "acceptable" inheritance. If an African-American is the first in his family to go to college, gets a corporate job, becomes a CEO and accumulates $10 million in assets, why is our tax code deciding that this is "bad" and should be penalized with a double-tax upon death?

[Being]

Republicans want to kick the can down the road. I say Democrats should let them; let the tax cuts expire and force the Republicans to deal with it in the House. What better way to reveal what America really voted for in 2010.

[RandBlade]

I think this is a disingenuous argument. Let's suppose for a moment that the payroll tax is entirely shifted to the employee (we already cover a 7.65% payroll tax, equal to what the employer pays, in addition to normal income taxes) - currently, self-employed people already pay the full 15.3%. What would happen? Obviously wages would rise to compensate for the lower taxes on the employer. So, essentially, whether you're talking about a payroll tax split 50/50 between the employee and employer or an income tax, they both act as a disincentive to work (and, indirectly, hire). To my knowledge companies don't calculate how much they're spending on employees by looking at their gross salary, but look at the cost of total compensation - healthcare, retirement funds, salaries, and payroll taxes, etc. Repealing the payroll tax is likely to change steady-state costs per employee negligibly as the costs will just be shifted around.

Not necessarily. This is assuming that wages are freely flexible which is not a safe assumption. Wages are "sticky downwards", it is easy to increase someone's wages but try decreasing them.

An increase in payroll tax does not come with a decrease in wages or anything like that. Over the last few years in the UK our payroll tax has been increased by 2.5%, we have not been able to simply reduce wages every year to compensate from it so that is simply an additional cost to the employer. If I have a fixed labour budget and my wage costs increase beyond my control (through taxation) then if I can't cut the wages then only thing I can cut is the number of people working.

Obviously if the payroll tax is not replaced with some other form of income tax on the employee but rather some other income-raising measure, things would be different, but that's not really a polemic against the payroll tax specifically but rather any taxes indexed to income and employment.

Again not necessarily, this is making a number of assumptions. One is that costs all feed through from one to the other and the other is that the two tax systems (payroll and income) are equally comparable which leads to your next point.

I think this might be where our difference of opinion comes in. In the US, the payroll tax is not progressive, and even slightly regressive. Every dollar of your first $106k is taxed at the same rate, so there's no incentive to have a bunch of lowly paid or part-time employees. Oh, there's theoretically an incentive to have a few highly paid employees, but that's not a very convincing incentive unless you have very high average salaries for your company. In that context, the payroll tax is just the cost of doing business and doesn't encourage much avoidance behavior. The only real exceptions I know of to FICA taxes are for graduate student stipends, which is a vanishingly small part of the employment population and is irrelevant since the employers already have fantastically lucrative reasons why they should exploit the graduate student population that have nothing to do with payroll taxes.

But this shows a difference in the tax system. Are income taxes regressive or at least flat? Because if not then the payroll tax is shifting the burden of taxation towards those who employ the low-skilled, low-paid sector of employment - those who most find it hard to get a job and those most likely to be unemployed.

So by your own example surely this is a tax on those jobs.

I'm not getting your logic here. How is an income tax any better than a payroll tax? It's just a matter of accounting whether it gets paid by the employer or employee.

No it is not, for both reasons detailed above: Inflexibility and lack of consistency. Furthermore if it was just a matter of accounting it would be rather silly to have both taxes for no reason (con's: Increased bureaucracy, pro's: None, since its just accounting).

Rather than "stimulus" of wasted spending that is completely inefficient, slash the burdens on hiring people and let companies recruit more people.

[Ziggy Stardust]

I never expected the summary of a bunch of polls and a political shift to generate such a outlandishly negative response. This isn't about a media conspiracy or manipulation. Go out there and ask everyone you know if the government has a problem with uncontrolled spending. I would be very surprised if anyone disagreed with the assertion. Even my most liberal friends agree with that. Everyone knows that there is a major problem brewing; it's not rocket science to point that out and suggest that the creeping dribble of events (threats of municipal default, etc) are adding up in everyone's mind.

*sigh* Why do I bother.

edit: I heard you like polls ...

edit 2, want more? Summarize this:

Poll: Most Americans Want Tax Cuts for the Rich to Expire
Americans OK Allowing Tax Cuts for Wealthy to Expire
Poll: Extend Bush Tax Cuts, Say Americans Worried About Economy

Polls

Since you clearly missed it

My beef with using the phrase "The American People" to pull your political cart is that it's empty dishonest rhetoric. There is no such thing as The American People with regard to political issues. There are many with varied ideas about taxes and spending, and some woman acting as if The American People speaks with one voice should not be cheered by anyone as having read the situation well.

In other words, The American People didn't vote for you, nor that woman to be their spokesperson. And "polls" show me a, they aren't united in a sentiment, b, depending on the poll of choice your mileage does vary quite a bit. So, show the people you claim to be championing some respect and let them have their own say.

[Ominous Gamer]

The American people

≠

ask everyone you know

but thanks for missing the point

Seriously, why does that annoy you?.

uncontrolled spending.

≠

people are getting sick of government spending.

Don't let that stop you though, please continue oversimplifying your arguments

[GGT]

But more importantly, an estate tax rests on really silly notions of what is an "acceptable" inheritance. If an African-American is the first in his family to go to college, gets a corporate job, becomes a CEO and accumulates $10 million in assets, why is our tax code deciding that this is "bad" and should be penalized with a double-tax upon death?

What does being African-American have to do with anything?

You've got some balls complaining about the estate tax, of all things, in this tax package. The first $5 million isn't federally taxed at all, and there are still enough loopholes for anything above that....

[RandBlade]

I think that's a bit silly. The estate tax is a double-tax. It incentivizes the concealing and shunting of wealth, and even incentivizes people to declare themselves "wealthy enough" to not pursue even more success because they don't want to be double-taxed for income and passing on wealth to their kids.

Double tax is meaningless, everything in life is taxed a million ways.
The concealing and shunting of wealth happens for a plethora of reasons.
Do you seriously believe that people decide "to not pursue even more success" because of a tax that is paid when they are deceased? What about income tax paid immediately, surely that is more of a discincentive?

But more importantly, an estate tax rests on really silly notions of what is an "acceptable" inheritance. If an African-American is the first in his family to go to college, gets a corporate job, becomes a CEO and accumulates $10 million in assets, why is our tax code deciding that this is "bad" and should be penalized with a double-tax upon death?

Because why should an African-American who is the first in his family to go to college, gets a corporate job, becomes a CEO and accumulates $10mn in assets pay a mammoth load of taxes on that income all through his life, but another African-American who drops out of High School, is looked after by his father, does nothing and suddenly inherits $10mn pays not a penny?

Why tax income from work, but not tax unearned income? Which disincentivises work more?

[Hazir]

I still think there should be a 100% death-tax for anybody not being a spouse (oh well maybe an exception for bits and bobs not too valuable) and a congruent drop in income-tax. Tax the dead, not the living.

[Dreadnaught]

Why? Not to be too personal, but most of the world has kids and those kids motivate the bulk of breeder decisions post-birth.

[Lewkowski]

I still think there should be a 100% death-tax for anybody not being a spouse (oh well maybe an exception for bits and bobs not too valuable) and a congruent drop in income-tax. Tax the dead, not the living.

Thats absurd. Here are several things that will occur.

#1. Very rich will move their assets to a country that is not as stupid.
#2. Gifts to heirs (at the maximum before taxes will be taken out) will be made before death.
#3. Gifts over the maximum will be done under the table.
#4. Legal loop holes will be sought after and found. IE taking out huge life insurance policies (those are not taxed) using trusts, creating "scholarships" that will only go to family. Ect.

People who earn money have a right to do with it what they will. IF they choose to pass it on to their family that is their right. What you are talking about Hazir is blatant wealth confiscation and income redistribution.

[RandBlade]

100% is absurd. It should be taxed as income just the same as earned income, just with a higher threshold and exempting the family home.

[Dreadnaught]

Why? What's the purpose of double-taxing someone just for passing on their wealth to their kids?

[Being]

Why? What's the purpose of double-taxing someone just for passing on their wealth to their kids?

The dead person isn't being taxed, the recipients are being taxed. There is no double-taxing going on. Do you think someone taxed on lottery winnings is being double-taxed because all the money spent on the lottery is already taxed?

[Dreadnaught]

It is absolutely double-taxing. Estates and wills exist to pass things along to children. It doesn't matter if that estate is taxed before or after death, it's still taxing the assets of a person simply for having assets. If someone is prudent and saves for their whole life, they are effectively punished for being too prudent and not allowed to pass that on to their kids.

[Being]

It is absolutely double-taxing. Estates and wills exist to pass things along to children. It doesn't matter if that estate is taxed before or after death, it's still taxing the assets of a person simply for having assets. If someone is prudent and saves for their whole life, they are effectively punished for being too prudent and not allowed to pass that on to their kids.

Dead people are dead Dread. You can't punish dead people. Maybe God can. As for taxing people on income (no matter where it comes from) that's a fact of life. Get over it.

[Dreadnaught]

Sure you can -- you're taxing them for their living wish to pass along their worldly possessions.

More importantly, why is this tax good? Why is it so sacrosanct to you?

[Lewkowski]

Dead people are dead Dread. You can't punish dead people. Maybe God can. As for taxing people on income (no matter where it comes from) that's a fact of life. Get over it.

The dead person was once alive and they knew that their estate was going to be taxed. The state has decreed that this live person can not do as they will with the assets they have accumulated over their lifetime. That DOES effect the person who will die and pass on their assets.

[Being]

Sure you can -- you're taxing them for their living wish to pass along their worldly possessions.

More importantly, why is this tax good? Why is it so sacrosanct to you?

It's no more inviolable to me than any other form of income tax. What bothers me is that people who actually work by the hour to earn their money generally pay more income tax on that money than people who spend virtually none of their time working for it. If your mom gives you her Manhatten condo when she dies, that is income to you and you should be taxed the same as anyone who had to put in hours of labor to earn the same. Like I said, it's no different than taxing lottery winnings.

[Being]

The dead person was once alive and they knew that their estate was going to be taxed. The state has decreed that this live person can not do as they will with the assets they have accumulated over their lifetime. That DOES effect the person who will die and pass on their assets.

Pass them on before you die.

[Lewkowski]

Pass them on before you die.

I might be wrong but I believe the reason for high rates on gift taxes is due to preventing people from gifting their way out of the estate tax.

[LittleFuzzy]

Dead people are dead Dread. You can't punish dead people. Maybe God can. As for taxing people on income (no matter where it comes from) that's a fact of life. Get over it.

A 100% tax on a source of income might be considered mildly confiscatory.

[Being]

A 100% tax on a source of income might be considered mildly confiscatory.

Where does 100% and my views connect?

[LittleFuzzy]

Where does 100% and my views connect?

Wasn't that the proposal outlined earlier in the thread?

[Being]

Wasn't that the proposal outlined earlier in the thread?

This thread is about Democrats lack of balls. Do you lack the balls to say the Democrats have no balls?

[RandBlade]

Why? What's the purpose of double-taxing someone just for passing on their wealth to their kids?

To raise income for the state.

What's the purpose of double-taxing a company just for passing on their wealth to their employees? (Income tax)
What's the purpose of double-taxing someone just for passing on their wealth to a company? (Sales tax)
What's the purpose of double-taxing someone just for doing nothing with their wealth? (Income tax on interest)
What's the purpose of double-taxing someone just for selling what they'd already bought? (CGT)

[Dreadnaught]

It's no more inviolable to me than any other form of income tax. What bothers me is that people who actually work by the hour to earn their money generally pay more income tax on that money than people who spend virtually none of their time working for it. If your mom gives you her Manhatten condo when she dies, that is income to you and you should be taxed the same as anyone who had to put in hours of labor to earn the same. Like I said, it's no different than taxing lottery winnings.

And if I support my mother for years at the end of her life, I should also pay taxes on the apartment that would otherwise be in my family for generations?

It's not income, it's the house I was born in. And she (and I) have been paying property taxes on it for years. You can't just layer multiple levels of taxes on one asset, then re-tax everything when someone dies.

Doesn't make sense. As I said before, if this were the 1700s you would be arguing for banning machine looms because they would put hand weavers out of business.

[RandBlade]

I agree with exempting the family home, buy why should you be taxed millions if you earn a lot, but inherit millions without a penny for no work? Why should those who work hard bear the burden?

[']['ear]

I might be wrong but I believe the reason for high rates on gift taxes is due to preventing people from gifting their way out of the estate tax.

Yes, that is it, but there is a layer of exemption. I forget what it is. 10K per year? 20K? A person with foresight can transfer a moderate amount of wealth untaxed. There are also trust funds, which are taxed less IIRC.

[LittleFuzzy]

This thread is about Democrats lack of balls. Do you lack the balls to say the Democrats have no balls?

The OP and initial discussion of the thread was about that claim. Recent discussion hasn't really had much to do with that original discussion, and has drifted. Most recently into the merits and/or negatives of estate taxes, and I though that tangent was started with a claim that we should reduce or abolish one tax and institute a 100% estate tax. Since no one has modified the terms since then, it seems logical it is still the baseline of discussion. Are you up to speed now, or do I need to find smaller words for you?

[Being]

Doesn't make sense. As I said before, if this were the 1700s you would be arguing for banning machine looms because they would put hand weavers out of business.

Insinuating your way out of an argument doesn't work. How are you any better than the guy who supports his mother till death, paying her rent and utility bills for years on end in the apartment where he was born? The difference is that when his mom dies his personal wealth is not changed by becoming the owner of a Manhatten apartment. If you don't pay for the property it is income.