Inheritance entitlement problems

[CorsiHockeyLeague]

Originally Posted by Slava

Why should inheritance be re-taxed? If I save my money to pass to the next generation I've already paid taxes on it. This is just a pure money grab.

The point has already been made and responded to: lots of "re-taxing" is already going on. Every time you buy a starbucks with your income, which was already taxed, you're paying a further tax when you spend it. Property tax, same deal. Property transfers usually carry a tax of some sort, and we already do impose at least a realization of gains on death, so it's not like there isn't a tax bill already coming with it. Why the objection in principle to this particular tax? The answer is "because it's a new tax", basically.

It should be taxed if imposing the tax will, in addition to increasing the tax base (which is an end in itself), promote behaviours we want in society while discouraging behaviours we don't want. So, if doing this would have the effect that more people would be spending more money rather than hoarding it, that's one reason to tax it. The only good reason not to is that doing so would lead to negative social consequences - for example, it could conceivably lead to MORE hoarding for non-liquid people who are worried about their estate having to be sold off when they die because of a tax bill (which is already an issue).

[ken0042]

Originally Posted by CorsiHockeyLeague

The point has already been made and responded to: lots of "re-taxing" is already going on. Every time you buy a starbucks with your income, which was already taxed, you're paying a further tax when you spend it.

So your justification is that it's OK to tax money 3 times, because we are already taxing it twice?

[Tinordi]

Originally Posted by Slava

Why should inheritance be re-taxed? If I save my money to pass to the next generation I've already paid taxes on it. This is just a pure money grab.

It should be taxed because r > g

And also it hasn't been taxed twice. The person who inherited the money never paid tax on it. They'll be paying tax for the first time on a huge gift.

Should we not tax gasoline? All that crude oil has already been taxed with royalties.

And were we to reward hard work, then taxing inheritance is the best thing to do as it insures that offspring aren't lazy and that tax revenues are cycled into creating opportunity for the hardest working.

There's frankly very little public policy arguments for not having one besides taking care of my tribe and to hell with everyone else.

[Slava]

Originally Posted by CorsiHockeyLeague

The point has already been made and responded to: lots of "re-taxing" is already going on. Every time you buy a starbucks with your income, which was already taxed, you're paying a further tax when you spend it. Property tax, same deal. Property transfers usually carry a tax of some sort, and we already do impose at least a realization of gains on death, so it's not like there isn't a tax bill already coming with it. Why the objection in principle to this particular tax? The answer is "because it's a new tax", basically.

It should be taxed if imposing the tax will, in addition to increasing the tax base (which is an end in itself), promote behaviours we want in society while discouraging behaviours we don't want. So, if doing this would have the effect that more people would be spending more money rather than hoarding it, that's one reason to tax it. The only good reason not to is that doing so would lead to negative social consequences - for example, it could conceivably lead to MORE hoarding for non-liquid people who are worried about their estate having to be sold off when they die because of a tax bill (which is already an issue).

Oh, there's the disconnect. I think we pay taxes to fund certain programs and things like that. You're more interested in the social engineering aspect of it, which I am completely not.

So lets say I got paid $100 today and spent $25. This is income, so its taxed. On the way home from work I die in a fiery motorcycle crash. I literally just paid taxes on that money, but you think it makes sense that my heirs now pay taxes again....why exactly? Because the money changed hands? What if I give that same money to them today and don't die. There are no taxes on that transaction, so why should the deciding factor be whether I'm alive or not?


The whole thing reeks of a cash grab for the government and has nothing to do with bettering society or anything of the sort. Its money that was taxed once and I just didn't get a chance to spend it before I died...or heaven forbid I did the intelligent thing and planned ahead by saving some money for myself for down the road. Regardless, there is no reason to tax it again.

[Slava]

Originally Posted by Tinordi

It should be taxed because r > g

And also it hasn't been taxed twice. The person who inherited the money never paid tax on it. They'll be paying tax for the first time on a huge gift.

Should we not tax gasoline? All that crude oil has already been taxed with royalties.

And were we to reward hard work, then taxing inheritance is the best thing to do as it insures that offspring aren't lazy and that tax revenues are cycled into creating opportunity for the hardest working.

There's frankly very little public policy arguments for not having one besides taking care of my tribe and to hell with everyone else.

I already noted this in my other response, but the social engineering aspect is disturbing. Because someone else decides that my heirs "didn't work hard" or the government feels the need to dissuade certain "behaviors" is not a reason to tax this money. Frankly, its appalling. My heirs could use that money to cure cancer or have some amazing impact on the world. They might use it for hookers and blow, but regardless I want them to make that decision, not the government because I didn't get a chance to spend it all.

Its OK though, in my will I have everything converted to travellers checks and put into my coffin. I'm taking it all with me!

[GP_Matt]

I am pretty sure that most inheritance taxes have a corresponding gift tax if you want to give family and friends a large gift.

I don't like the fact that some of the richest people in Canada and the US did nothing for their wealth and paid no tax to receive it. I wonder how many of them are participating in the giving pledge.

[GP_Matt]

Originally Posted by Slava

I already noted this in my other response, but the social engineering aspect is disturbing. Because someone else decides that my heirs "didn't work hard" or the government feels the need to dissuade certain "behaviors" is not a reason to tax this money. Frankly, its appalling. My heirs could use that money to cure cancer or have some amazing impact on the world. They might use it for hookers and blow, but regardless I want them to make that decision, not the government because I didn't get a chance to spend it all.

Its OK though, in my will I have everything converted to travellers checks and put into my coffin. I'm taking it all with me!

Is it safe to assume that you think cigarette taxes are also immoral.
What about tax free saving accounts and registered saving plans? Damn government trying to encourage me to save my money.

[OMG!WTF!]

And also it hasn't been taxed twice. The person who inherited the money never paid tax on it. They'll be paying tax for the first time on a huge gift.

I think a lot of people would disagree with that. For 18 years kids require after tax money to survive.

Should we not tax gasoline? All that crude oil has already been taxed with royalties.

So, the painfully obvious goof here is that we all own the resource in the ground. You don't own other people's inheritance.

And were we to reward hard work, then taxing inheritance is the best thing to do as it insures that offspring aren't lazy and that tax revenues are cycled into creating opportunity for the hardest working.

Now you ae just talking about theft. How much tax are you going to charge someone upon inheretance in order to ensure they have to work fo a living? Like, are you planning on taking all of it?

There's frankly very little public policy arguments for not having one besides taking care of my tribe and to hell with everyone else.

Oh bs.

[troutman]

Originally Posted by Slava

I already noted this in my other response, but the social engineering aspect is disturbing.

Vive Le Revolution!

http://www.theguardian.com/business/...ential-thinker

Piketty’s book is surely the most influential published by an economist in a generation, infuriating the right as much as it delighted an intellectually starved left. Using a mass of data, the book sought to expose why modern capitalism is an engine of exploding inequality: the rate of return on capital exceeds the rate at which the economy grows, he argues, and wealth is becoming ever more concentrated at the top of society.

More explosively, he proposes a global wealth tax as a check on this process, even though he has conceded this is “utopian”.

He unashamedly believes in “market forces”, arguing there is no “war of religion” between left and right in the modern era. But he defends his radicalism, arguing that a global wealth tax makes “property temporary, rather than permanent”, which he describes as “a permanent revolution, a very substantial change to the traditional capitalist system”.

Piketty fears the far right, including the surging National Front in France, which he describes as “very frightening”. “I am afraid that if you don’t find peaceful domestic solutions to our inequality and social problems, then it’s always tempting to find other people responsible for our problems.” The social contract is threatened by middle-class and poor people resenting paying more tax than multinational companies, which sometimes pay nothing.

[Weitz]

This thread now reeks of people jealous of what other people have and they may not.

An inheritance/wealth tax would be ridiculous.

[crazy_eoj]

Originally Posted by Tinordi

And were we to reward hard work, then taxing inheritance is the best thing to do as it insures that offspring aren't lazy and that tax revenues are cycled into creating opportunity for the hardest working.

I love that crap like this point is parroted as though it's a law of physics.

That is an ideological assumption.

[Phanuthier]

Few questions / comments :

- I was told that in the last year you live, you (some?) spend a million dollars. True? False?

- For those saying they hope their parents use up all their money, how do they know when they run out? What if they plan on living until 90, but at 89, they are still in great health and there is something that makes them want to keep living (i.e. grandchild achievements). Do they rejoin the work force?

- I read someone above that they hope their parents go leaving nothing but medical bills - maybe you are far wealthier then I am, but if I was left a 6 figure medical bill, that would be a huge burden on me... why would you want that?

Disclaimer : I'm not saying this cause I have diabolical plans that my parents read this thread and save a ton of money so I don't have to work (anymore). I am, however, very surprised that so many people plan on seeing themselves / their parents use up all their money upon death, it seems like really poor planning to me to have nothing left to cover your margins.

[troutman]

Originally Posted by Weitz

An inheritance/wealth tax would be ridiculous.

The proposal is not to tax all estates, just the wealthiest.

Robin Hood.

[CorsiHockeyLeague]

Originally Posted by ken0042

So your justification is that it's OK to tax money 3 times, because we are already taxing it twice?

Um, no. What is this fascination on this site for putting words in other peoples' mouths? If you can't quote my post and find the statement, it's not a statement I made.

The existence of other double taxation in the system is not a justification for any particular tax, but an objection to the argument that a tax on inheritance of some sort is a non-starter simply because it would constitute double taxation. If you object to that as a non-starter, then get your pitchfork out, because we already do it.

Originally Posted by Slava

Oh, there's the disconnect. I think we pay taxes to fund certain programs and things like that. You're more interested in the social engineering aspect of it, which I am completely not.

I think both are leigitmate goals. Again, we quite obviously already do this. The entire charities system is based on it. So is accelerated capital cost allowance for environmental projects. So is the small business deduction. Honestly, half the income tax act has some social engineering aspect to it. I think it's a totally legitimate way to set tax policy.

So lets say I got paid $100 today and spent $25. This is income, so its taxed. On the way home from work I die in a fiery motorcycle crash. I literally just paid taxes on that money, but you think it makes sense that my heirs now pay taxes again....why exactly? Because the money changed hands? What if I give that same money to them today and don't die. There are no taxes on that transaction, so why should the deciding factor be whether I'm alive or not?

Why should it be a deciding factor that money changed hands at all? Why does the current tax code call for a deemed disposition on death at fair market value when you haven't been paid fair market value for your assets? Literally every decision like this is fundamentally arbitrary except to the extent it's public policy driven.

The whole thing reeks of a cash grab for the government and has nothing to do with bettering society or anything of the sort.

See, I disagree with a couple of things in this statement. One, I'm open to arguments as to whether it would better society. I think there is a case to be made that it would.

Second, a "cash grab" is not inherently wrong in all circumstances. If the AB government instituted a 7% PST tomorrow to fund X, we could argue over whether that was a good idea and whether X should be funded in that way, but there would no doubt be plausible arguments that it would.

Originally Posted by Slava

Because someone else decides that my heirs "didn't work hard" or the government feels the need to dissuade certain "behaviors" is not a reason to tax this money.

Again with the putting words in peoples' mouths. No one said anything about people not working hard. I think the "fairness" justification is at least initially beside the point regardless of which way you spin it.

Frankly, its appalling. My heirs could use that money to cure cancer or have some amazing impact on the world.

Uh huh.

Its OK though, in my will I have everything converted to travellers checks and put into my coffin. I'm taking it all with me!

It would still be your property when you died, so if the tax provision was drafted in any way that makes any sense, your heirs would probably still end up paying tax on it, they'd just have to do so out of their own pockets rather than yours.

[Tinordi]

Originally Posted by Slava

I already noted this in my other response, but the social engineering aspect is disturbing. Because someone else decides that my heirs "didn't work hard" or the government feels the need to dissuade certain "behaviors" is not a reason to tax this money. Frankly, its appalling. My heirs could use that money to cure cancer or have some amazing impact on the world. They might use it for hookers and blow, but regardless I want them to make that decision, not the government because I didn't get a chance to spend it all.

Its OK though, in my will I have everything converted to travellers checks and put into my coffin. I'm taking it all with me!

Define social engineering.

If you agree that concentrations of wealth are economically inefficient, to which there is a huge field of economics to point to and if you believe that wealthy people passing down estates continues to not only concentrate wealth but make it worse as was painstakingly detailed in Piketty's work then you have a public policy problem on your hands.

Frankly, its appalling. My heirs could use that money to cure cancer or have some amazing impact on the world. They might use it for hookers and blow, but regardless I want them to make that decision, not the government because I didn't get a chance to spend it all.

So you're saying screw society I got my piece time for my tribe to ride it out?

And there's the argument to tax inheritance because inheritance is not as productive as it would be were it put to creating opportunity. That could happen in many ways that aren't some big government spending problem. It could be revenue neutral and create general tax cuts across the board.

It would also limit the concentration of wealth, which is a huge drain on a productive economy.

The only arguments I've see in this thread is that people are "jealous" and who are you to take my money, even when I'm dead! Gubament!!!

[flamesfever]

Originally Posted by troutman

The proposal is not to tax all estates, just the wealthiest.

Robin Hood.

Yes, but with inflation, in a generation or two the tax would start to affect people at successively lower wealth levels. Once a certain type of tax is instituted, it is usually there forever.

Also, wouldn't it be a threat to family farms or ranching operations?

When I came out to Calgary from Ontario in the 60's the area west of Calgary was littered with abandoned farm houses (the best places to hunt pheasants). So, in effect, the unpredictable forces of global markets and mother nature eventually render the ownership of private property temporary anyway.

[CorsiHockeyLeague]

Originally Posted by flamesfever

Yes, but with inflation, in a generation or two the tax would start to affect people at successively lower wealth levels. Once a certain type of tax is instituted, it is usually there forever.

Not at the same rate or income level. They just increased the lifetime capital gains exemption (granted, not enough). The tax being there doesn't mean that they won't change the threshold for its application to keep up with inflation. In any event, this is just an argument against not modifying the rate, it's not an argument against the tax itself.

Also, wouldn't it be a threat to family farms or ranching operations?

If you can demonstrate that it is, and why this is a problem that's worth avoiding, then an exception could be drafted.

When I came out to Calgary from Ontario in the 60's the area west of Calgary was littered with abandoned farm houses (the best places to hunt pheasants). So, in effect, the unpredictable forces of global markets and mother nature eventually render the ownership of private property temporary anyway.

I have no idea what this is supposed to mean or imply.

[Coach]

Originally Posted by Weitz

This thread now reeks of people jealous of what other people have and they may not.

An inheritance/wealth tax would be ridiculous.

Or annoyed that people get a free ride purely because they are the offspring of the wealthy.

**disclaimer*** I am the offspring of the wealthy.

So maybe you want to call it class guilt? Or just social consciousness?

It's not like the inheritance would just be split amongst the lowest income people as a cheque or something like that. It would go into improving services that almost everyone uses, including those receiving the inheritance.

And to Slava's point that his kids could cure cancer... the capacity for genius is in poor kids too. And they don't get even close to the same chance to impact the world.

Really it's the corporate tax BS that needs to be addressed more than this though.

[Erick Estrada]

IMO there's just something morally wrong with taxing after tax money. I realize that wealthy people are looked at as fat cats by some but not everyone has had money bags fall in their laps and a lot of them spent a good portion of their lives working hard amassing their fortunes. My dad worked his ass off 7 days a week for over a decade never taking a holiday and I would hate to see him waste the good years of his life working only to see that half of those years were essentially wasted because the government is set to wait him out until he dies to re-tax it and soak his lifetime earnings once more. You can argue all you want about if the government is prudent with the money but the fact is that they got their tax money already on it and what's left is my father's money not theirs and he already paid them his dues on it. To further nickel and dime it because he's passed away is immoral IMO. You have to draw the line where a family's money is their own and the government can find other methods of income other than double dipping on lifetime earnings.

[Oil Stain]

One thing to consider is that an inheritance tax would probably end up hurting middle class inheritors much more than the obscenely wealthy.

Say your middle class parents bought a lake lot 50 years ago. Over time they saved up enough to build a nice retirement cabin on it. Now they want to leave it to you and your brother and you both love going out to that lake.

Well that's too bad because the lake has gotten popular and the property is now appraised at 800,000 and the government will demand a third of that in cash when your parents pass away Which you don't have lying around.

You get screwed out of a place that has great sentimental value as a result.


If we are concerned about the super wealthy having too much money to give their offspring we should just tax them more when they are alive.