Yup. It's called boiling the frog. I am not totally against wealth taxes, however I disagree with the approach.
What I do not understand is why not just implement a more aggressive estate tax on people and close the "trust" and "foundation" loopholes for avoiding the estate tax.
Let's take Jeff Bezos as an extreme example (who isn't even a California Resident). At least until we figure out immortality, Jeff Bezos will die someday. Let him enjoy the wealth that he has earned by creating a company that has benefited society as a whole. When he dies, his wealth should return to the society from which it came. He was rewarded for his work/ingenuity/effort during his life, and now that he is gone, society reclaims the rewards it had given him. What is wrong with that?
The way I see it, once you are dead you don't get a vote, and you don't get a say in the affairs of the world so you shouldn't be able to direct that wealth through any kind of inheritance, foundation or trust. His children have done nothing to earn or create that wealth themselves so why should they deserve any of it? They will have the same opportunities to create and earn wealth that he did, and they will benefit from the society he contributed to.
If they are able to build equivalent wealth via another Amazon.. Great! They earned it! if not that is fine too. You want to help your kids? Teach them how to fish for themselves instead of giving them an unlimited supply of fish.
Passing down wealth from generation to generation or directing wealth long after you are dead through foundations and trusts is directly opposed to any effort to give "equality of opportunity" for future generations.
If such legislation were implemented, it will just incentivize people even more to gift their wealth away before they die. All that's been achieved is simply shifting a boundary condition. My general view is that negative incentive structures are not particularly effective in what they set out to achieve. Better to try and craft positive incentive structures for people to donate money over time before they pass on.
There are essentially 4 ways to spend money:
1) You can spend your own money on yourself.
2) You can spend your own money on someone else.
3) You can spend somebody else’s money on yourself.
4) You can spend somebody else’s money on somebody else.
People are are most careful with (1) and least careful with (4). Taxes fall into bucket 4 and donations/gifts fall into bucket 2. I'd much rather see charitable foundations and organizations self-directing the appropriation of money at the local level rather than state/federal government doing the appropriation.
All this is not to say that inheritance and wealth taxes should not be collected. I think they should and should be done to help fund the essential functions of government, but I think dialing that percentage up to a 100% of someone's wealth when they die would be a mistake.
> When he dies, his wealth should return to the society from which it came.
Sorry, but this stance is outright ignorant. What do you mean return to society ? His wealth is Amazon, the company, dozens of warehouses and an incredible logistics chain.
His wealth currently provides a pretty damn good service to society, in the form of being able to get items delivered fairly quickly and contact-less in the time of a pandemic.
Are you proposing we take his Amazon holdings after his death and give every person in the county a fractional share? Or however many shares it comes out to?
That's certainly a possibility, but the realistic outcome of that is that most people try to sell their shares for cash right away, thereby crashing the price, and most shares ending up in institutional investment banks and funds within the first year.
I'm not against a stronger estate tax either, but you have to be real careful when you're trying to divvy up massive amounts of wealth on a short time scale and think of the second order effects.
It is unfortunate that you consider the stance to be "outright ignorance", when what you are really questioning is how would such a thing be implemented.
That is not an easy question to answer. The approach you suggested is certainly one that could be considered. You mention that most people would sell those shares for cash.. well that is cash in their hands then. That is money they didn't have before that they now have, that they can then spend on goods and services correct? Is it not redistribution of the wealth of the deceased within society?
It sounds like you agree with the principle, but are worried about the implementation. I would likely consider myself to be in the same boat. However, I am not even seeing any public conversation about it, or an attempt to move in that direction. I think the conversation should be
"This is what we want to do, this is fair wealth redistribution.. now let us come up with ideas on how we can make this work".
> You mention that most people would sell those shares for cash.. well that is cash in their hands then. That is money they didn't have before that they now have, that they can then spend on goods and services correct?
Because if sold quickly, it will crash the price of shares. So instead of a share being worth $3000 like it is now, it could cause a short term event where the people that need cash the most would only be able to get $100 for a share, which will get swooped by people who have disposable income to blow on investments.
It would just re-consolidate the wealth in the hands of wealthy people.
Sure, that's probably somewhat better than having it in the hands of 1 person, e.g Bezos, but is it better than other alternatives? Like just giving people stimulus checks in cash?
Because those guys have great influence among the lawmakers bro. They are not going to put up laws that poverish themselves. Higher income tax, for sure, because maybe I take one buck as salary but have billions sitting on wherever the law doesn't reach. Just an exraggate example.
indians dont believe in death as the final destination. we believe in reincarnation. why should my wealth go to some random person when it can help my family, friends or those that i deem valuable?
the kind of A type personality who is a wealth creator..by luck or intent..is likely uber A type that will not submit to dictatorship by legislation. if Jack Dorsey was forced to pay more taxes, he'd probably leave CA for Austin too. (twitter was in SF only for the time they have the tax break. right after it elapsed..coinciding with the covid SAH order, Jack was more vocal about going 100% remote..but the plan to move out of SF was always there even before pre-covid).
A type personalities like to follow rules because it makes it easier to compete in the game. because when you have rules for the game, it means everyone who is playing with you also acknowledge the rules of the game. there will be less conflict, more order and they thrive in such environments because it offer sufficient stability to focus on their goals.
they also want to be recognised and feted. some humbly and others crave it openly. even those who dont realise it enjoy it. california's environment will no longer foster what it did before.
have you ever been pickpocketed? have you ever given money to charity? which feels better? we are still pleasure seeking, rationalising apes. we like to say the words but we will still act with our ape instincts.
california should eliminate ALL taxes. and institute a flat consumption tax. and stop their dirty politics of turning their people against each other. inequalities exist for a reason. i have seen beggars in india with one limb and living in a shack with three children boiling pebbles for soup who are happier than millionaires in california.
>i have seen beggars in india with one limb and living in a shack with three children boiling pebbles for soup who are happier than millionaires in california.
We've got yachting communities in the US where some of the natives are surviving off of food banks and charity too because of high taxes, and they're still happy compared to the perceived grumpiness of California billionaires.
So i guess it's all relative, extreme inequality can be so unfair.
> "equality of opportunity" for future generations.
What a bullshit idea. Different people start with different advantages in life. Some with wealth, some with looks, some with none. In your bid to make an equal society, will you throw acid on attractive people so they become less attractive?
Attractive people, men and women have a significantly higher advantage in life, maybe call it an asset.
Looks are an asset.
Wealth tax is a tax on your fucking assets. You gonna tax looks too?
If I consume less, I should pay less tax. A tax on wealth is a tax on hardwork and savings. People should be rewarded for spending wisely, not penalized.
Once you have a solution for other inherent advantages in life apart from money, and how to account for them, come back.
What I do not understand is why not just implement a more aggressive estate tax on people and close the "trust" and "foundation" loopholes for avoiding the estate tax.
Let's take Jeff Bezos as an extreme example (who isn't even a California Resident). At least until we figure out immortality, Jeff Bezos will die someday. Let him enjoy the wealth that he has earned by creating a company that has benefited society as a whole. When he dies, his wealth should return to the society from which it came. He was rewarded for his work/ingenuity/effort during his life, and now that he is gone, society reclaims the rewards it had given him. What is wrong with that?
The way I see it, once you are dead you don't get a vote, and you don't get a say in the affairs of the world so you shouldn't be able to direct that wealth through any kind of inheritance, foundation or trust. His children have done nothing to earn or create that wealth themselves so why should they deserve any of it? They will have the same opportunities to create and earn wealth that he did, and they will benefit from the society he contributed to.
If they are able to build equivalent wealth via another Amazon.. Great! They earned it! if not that is fine too. You want to help your kids? Teach them how to fish for themselves instead of giving them an unlimited supply of fish.
Passing down wealth from generation to generation or directing wealth long after you are dead through foundations and trusts is directly opposed to any effort to give "equality of opportunity" for future generations.