Inheritance Tax (1 Viewer)

[Lentern]

Disclaimer: Yes I am writing a uni thing on this at the time, no I am not posing the question to you but rather issues that I encountered in my research.

Essentially even within the parameters of a free market framework, what theoretical rights are impinged upon by an inheritance tax? The beneficiary I think we all agree is just a lucky person (not withstanding the sort of anomaly where an agreement is made to include someone in their will in exchange for services which is a very different issue), that real rights that have been earned are by the dying man who has worked to accrue his wealth and should be allowed to do it which is a legitimate perspective to take while he is still alive but is it logical and pragmatic from a utilitarian perspective to afford economic rights to the deceased?

 

[Debauchee]

A will is a deferred transferal of property ownership. Upon death, the property becomes the heir's.

Therefore, inheritance tax is theft from the heir. The fact that you were unable (or perhaps more likely, unwilling) to work this out on your own is quite telling of your stupidity.

 

[Debauchee]

On what grounds should the entire winnings of lottery competitions not be confiscated by the state? No production of good nor service resulted in this increased wealth, and indeed it would be spent far more socially by the state than by the prize recipient.

 

[Lentern]

A will is a deferred transferal of property ownership. Upon death, the property becomes the heir's.

Therefore, inheritance tax is theft from the heir. The fact that you were unable (or perhaps more likely, unwilling) to work this out on your own is quite telling of your stupidity.

I will note your contribution and keep it in mind for when I try to join the IPA.

(Although you are wrong from a legal standpoint, until the will is administered the heir does not yet have a legal title to the property)

 

[seremify007]

On what grounds should the entire winnings of lottery competitions not be confiscated by the state? No production of good nor service resulted in this increased wealth, and indeed it would be spent far more socially by the state than by the prize recipient.

Because under the principles based system if you are to include lottery winnings as ordinary income under ITAA s6-5, then there is clearly a nexus to the costs incurred in earning said income (i.e. the lottery ticket) which would thus be deductible under s8-1. It's a zero sum game if all lottery winnings are distributed, but since they aren't, it should in theory lead to a net revenue loss for the taxation authorities. Same principle applies to gambling wins/losses because otherwise you'll have more people claiming tax deductions than assessable income. It would also greatly change the way people approach gambling.

 

[funkshen]

lentern, the free market is not necessarily about "theoretical rights", unless you say that to mean purely formal-legalistic rights (as opposed to metaphysical like self-sovereignty or some such), so i'm not quite sure what the relevance of an inheritance tax is to a breach of theoretical rights.

regardless, a tax on inheritance (or any wealth) is, as milton friedman claims above, the destruction of the incentives to produce the wealth in the first place. you therefore have your pragmatic or utilitarian argument for not doing so: the production of wealth is contingent upon the incentives for producing wealth (i.e. passing it on to your kids). destroy the incentives, destroy the wealth. this therefore precludes an actual policy of inheritance redistribution. there is only no argument against redistributing inheritance (for example) if it does destroy the incentives (say if instances are so isolated or random that they do not result in an expectation of redistribution)

 

[Lentern]

By his own admission (at 3:30) the success of his theory is contingent upon people acting irrationally.

 

[Debauchee]

(Although you are wrong from a legal standpoint, until the will is administered the heir does not yet have a legal title to the property)

What's the point of arguing from a legal standpoint? I thought we were talking about morality or "theoretical rights".

By his own admission (at 3:30) the success of his theory is contingent upon people acting irrationally.

irrational, in this context, referring to people having value system different to his

so not really irrational in any meaningful way

 

[funkshen]

By his own admission (at 3:30) the success of his theory is contingent upon people acting irrationally.

mind blowing

 

[Lentern]

What's the point of arguing from a legal standpoint? I thought we were talking about morality or "theoretical rights".

I was and then you started talking about transfers of property.

irrational, in this context, referring to people having value system different to his

so not really irrational in any meaningful way

Well they are irrational in a meaningful way, they are motivated by emotional instinct instead of any sort of principled thought process.

 

[Lentern]

lentern, the free market is not necessarily about "theoretical rights", unless you say that to mean purely formal-legalistic rights (as opposed to metaphysical like self-sovereignty or some such), so i'm not quite sure what the relevance of an inheritance tax is to a breach of theoretical rights.

regardless, a tax on inheritance (or any wealth) is, as milton friedman claims above, the destruction of the incentives to produce the wealth in the first place. you therefore have your pragmatic or utilitarian argument for not doing so: the production of wealth is contingent upon the incentives for producing wealth (i.e. passing it on to your kids). destroy the incentives, destroy the wealth. this therefore precludes an actual policy of inheritance redistribution. there is only no argument against redistributing inheritance (for example) if it does destroy the incentives (say if instances are so isolated or random that they do not result in an expectation of redistribution)

The most compelling argument against taxation is that someone has worked hard to accrue the property, they should therefore have liberty to do with it what they will. Arguments about taxation stifling economic growth may or may not be true but I have no interest in that at this point in time. My little curiosity was that as inheritance deals with the assignment of property that belongs to a dead person, does a claim to the rights really exist anymore? Once the beneficiary has the property it's a different matter but in the period between death and administration of will the only person who claim to have "earned the right" to decide what happens to the money is no longer alive and do we, from an ethical standpoint have obligations to honour the economic rights of the dead?

 

[seremify007]

I've always viewed taxation a little different to you. I see it as reflecting the non-market costs whether it be for the clean air, the security (e.g. lower crime levels), the climate, etc... pretty much anything which you can't necessarily put a price on whether it be a social cost or something else, but is something you are able to derive benefit from. I'm actually finding it quite difficult to articulate my view on this but I suppose that it's the whole concept of those who earn or profit from the land (or whatever the capital asset may be) should pay the social cost. Whilst I may not necessarily agree with the way taxation is levied or targeted directly or indirectly, it's difficult to argue with the principle behind it. Applying this to inheritance tax and so forth, it is just another way for the government to give with one hand and take with another. At the end of the day a country still requires $x amount to run, and the challenge is both finding the optimal $x, as well as how they are to source $x from the community.

 

[funkshen]

The most compelling argument against taxation is that someone has worked hard to accrue the property, they should therefore have liberty to do with it what they will. Arguments about taxation stifling economic growth may or may not be true but I have no interest in that at this point in time. My little curiosity was that as inheritance deals with the assignment of property that belongs to a dead person, does a claim to the rights really exist anymore? Once the beneficiary has the property it's a different matter but in the period between death and administration of will the only person who claim to have "earned the right" to decide what happens to the money is no longer alive and do we, from an ethical standpoint have obligations to honour the economic rights of the dead?

the most "compelling argument against taxation" is NOT that they SHOULD have the liberty to do with it what they will. i never said should, and nor did milton friedman. this is positive economics 101: the reason they accumulated the wealth/worked hard in the first place was that they WOULD have the liberty to do with it what they will. whether they should have is immaterial: a normative argument does not follow from a positive argument, and to make one is secondary to the matter at hand.

i think you are confusing about legal personality. a deceased person ceases to enjoy property rights. property is instead transferred to a new legal entity, the deceased's estate, which as much a legal vehicle as is the beneficiary and the deceased (when living.). the estate's property is distributed to the beneficiaries (or has claims made upon it) subject to the intent of the deceased (and arbitrated by other legal nuances). at no point in this process is property belonging to a dead person.

at no point in this process did anyone "earn the right" to do anything. rights are arbitrary allocated in a legal system (either through precedent or legislation). we have no ethical obligation to honour the property rights of the dead (more appropriately the deceased's estate) insofar as adherance to the letter of the law isn't an ethical obligation.



i actually don't get why the fuck you're talking about ethical obligation, "earning the right" etc in the first place. and as always, without defining your terms the debate is moot.

 

[Lentern]

the most "compelling argument against taxation" is NOT that they SHOULD have the liberty to do with it what they will. i never said should, and nor did milton friedman. this is positive economics 101: the reason they accumulated the wealth/worked hard in the first place was that they WOULD have the liberty to do with it what they will. whether they should have is immaterial: a normative argument does not follow from a positive argument, and to make one is secondary to the matter at hand.

i think you are confusing about legal personality. a deceased person ceases to enjoy property rights. property is instead transferred to a new legal entity, the deceased's estate, which as much a legal vehicle as is the beneficiary and the deceased (when living.). the estate's property is distributed to the beneficiaries (or has claims made upon it) subject to the intent of the deceased (and arbitrated by other legal nuances). at no point in this process is property belonging to a dead person.

at no point in this process did anyone "earn the right" to do anything. rights are arbitrary allocated in a legal system (either through precedent or legislation). we have no ethical obligation to honour the property rights of the dead (more appropriately the deceased's estate) insofar as adherance to the letter of the law isn't an ethical obligation.



i actually don't get why the fuck you're talking about ethical obligation, "earning the right" etc in the first place. and as always, without defining your terms the debate is moot.

You don't think someone who creates property has the right to exercise control over it, and that we are ethically bound to respect that right?

 

[funkshen]

You don't think someone who creates property has the right to exercise control over it, and that we are ethically bound to respect that right?

not necessarily. i know that governments create and allocate property rights, as with all rights, and as a consequence we are lawfully bound to respect these rights. whether this is an ethical arrangement escapes me.

 

[soloooooo]

Same principle applies to gambling wins/losses because otherwise you'll have more people claiming tax deductions than assessable income. It would also greatly change the way people approach gambling.

Exactly this.

 

[Debauchee]

You don't think someone who creates property has the right to exercise control over it, and that we are ethically bound to respect that right?

An institution has a violently enforced monopoly on making laws...and not doing what it says is "Unethical".


Um...

 

[Debauchee]

Reverence for authority is a sign that one would exercise it furiously given the chance.

 

[Annihilist]

An institution has a violently enforced monopoly on making laws...and not doing what it says is "Unethical".

Um...

Reverence for authority is a sign that one would exercise it furiously given the chance.

Both are true and good statements but their relevance escapes me.