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Re: Inheritence Tax

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  • walterhorn
    The assertion/assumption of this structure is ... income while ... I m not certain, Ed, but I d think some detailed studies would be needed to give empirical
    Message 1 of 15 , Sep 18, 2006
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      The assertion/assumption of this structure is
      > two-fold: first, that the higher the individual income the greater the
      > source is from rent-seeking activities; and, second, in the short- to
      > medium-term this structure is minimally confiscatory of earned
      income while
      > being based on ability to pay far more than the systems now in place.

      I'm not certain, Ed, but I'd think some detailed studies would be
      needed to give empirical support to this first assumption, before
      you'd find hordes of geoists rallying to this call. It almost seems
      tantamount to saying, "You know what? I've just realized we don't
      need any of this LVT stuff after all! We just fiddle with the marginal
      tax rates and the exemptions, and we get approximately the same
      results!" I mean, if true, that'd be wonderful. But it's not really
      intuitive....at least to this non-economist.

      Best,

      W
    • Edward Dodson
      ... income while ... I m not certain, Ed, but I d think some detailed studies would be needed to give empirical support to this first assumption, before you d
      Message 2 of 15 , Sep 18, 2006
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        Walter Horn wrote:


        > The assertion/assumption of this structure is
        > two-fold: first, that the higher the individual income the greater the
        > source is from rent-seeking activities; and, second, in the short- to
        > medium-term this structure is minimally confiscatory of earned
        income while
        > being based on ability to pay far more than the systems now in place.

        I'm not certain, Ed, but I'd think some detailed studies would be
        needed to give empirical support to this first assumption, before
        you'd find hordes of geoists rallying to this call. It almost seems
        tantamount to saying, "You know what? I've just realized we don't
        need any of this LVT stuff after all! We just fiddle with the marginal
        tax rates and the exemptions, and we get approximately the same
        results!" I mean, if true, that'd be wonderful. But it's not really
        intuitive....at least to this non-economist.

        Ed here:
        If only there were "hordes of geoists" out there eager to rally to any
        call...

        As for my proposal, I would be delighted if some researcher or graduate
        student somewhere (this could be done in any country where the data is
        collected and available) would examine the actual impact. The research I did
        in 2003 on wealth and income concentration in the U.S. (an presented at the
        CGO conference in Bridgeport, CT) was what initially stimulated my thinking
        on how to achieve a more "Georgist" outcome thru restructuring of state and
        federal taxation of income -- not as a substitute for direct taxation of
        rent but as an effective transitional measure.

        I recall back in 1989 in Philadelphia that Mase Gaffney expressed his
        feeling that the tax on the gain on the sale of land (i.e., so-called
        "capital gains") was a second-best means of capturing rent. Just about the
        same time the Japanese experienced collapse of their land markets, in part
        due to the stresses caused by the absence of any annual tax on rent and the
        very high tax rates imposed when land changed hands. Viewed in this context,
        I see a "graduated flat tax" (or whatever better term someone can come up
        with) as more effective with no real downsides, or no downsides that I have
        been able to think of.

        A discussion with others on this list would, hopefully, bring out any issues
        and concerns that have thus far escaped me.
      • Dan Sullivan
        Five points. 1.) We are not discussing inheritance tax in the context of a Georgist society where land rent is collected for the common good, but in the
        Message 3 of 15 , Sep 18, 2006
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          Five points.

          1.) We are not discussing inheritance tax in the context of a Georgist
          society where land rent is collected for the common good, but in the
          context of the current society.

          2.) Nobody suggested that we actually advocate inheritance tax, and
          we shouldn't. We should "stay on message" and advocate land value
          tax.

          3) However, of all the taxes we have, only real estate tax and
          inheritance tax fall substantially on land values. Therefore, we should
          oppose any proposals that reduce revenues from these taxes and
          thereby shift the burden to taxes on productivity.

          4.) Those who single out inheritance taxes and real estate taxes are
          almost never our allies. While one can use the force of their own
          arguments to support land value tax, the way one uses an opponent's
          energy in judo, they are still our opponents, and should get no more
          than feint praise.

          5. While one might hypothetically find a person who earned a large
          fortune through his labors and not through manipulating privilege, the
          continuance of such fortunes always involves investment in privilege-
          based assets. That's why talking about "the *labours* of those who
          choose to leave their estate to you" seems particularly presumptuous.
        • Mark Porthouse
          Hi Dan, I made the below quote in the context of an LVT environment to argue that in that case inheritance shouldn t be taxed. I m sorry that I didn t make
          Message 4 of 15 , Sep 19, 2006
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            Hi Dan,

            I made the below quote in the context of an LVT environment to argue
            that in that case inheritance shouldn't be taxed. I'm sorry that I
            didn't make that context clearer.

            Yes, it would be presumptuous to assume that in today's environment any
            inheritance would not have benefited from privilege. Hence we agree that
            inheritance tax today is a good thing, but that it would be better to be
            able to phase it out with the advent of LVT.

            My apologies to all for misspelling the thread title!

            Cheers,

            Mark

            Dan Sullivan said the following on 18/09/2006 20:14:
            > 5. While one might hypothetically find a person who earned a large
            > fortune through his labors and not through manipulating privilege, the
            > continuance of such fortunes always involves investment in privilege-
            > based assets. That's why talking about "the *labours* of those who
            > choose to leave their estate to you" seems particularly presumptuous.
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