Look, you didn’t get my point about money and taxation. The wording you use implies that taxes are levied on humble ole’ money, just sitting around minding its own business and the big bad government comes in and demands a payola. But that isn’t the case. Taxes are only collected when money does something. In other words, it changes hands in an economic transaction, and only that which changes hands is taxable. So saying the “same money is taxed twice” is a red herring argument, because each transaction, the event that triggers taxation, only is taxed ONCE. All transactions should be taxable so as not to distort economic choice. And the argument that we should pay lower tax rates is certainly one to discuss and I welcome that. But to say tax rates for any sort of transaction should be zero is highly implausible.

Here’s the thing. I don’t like paying taxes any more than you do. I do everything I can within reason to avoid paying taxes. But that’s the price of living in a society with, among other things, nice paved roads, protection against those who would do you harm and a promise that we don’t abandon our elderly and sick. Suck it up, or move to Bermuda. I hear the pickpockets are very successful in Bermuda.

To add one thing: the difference between a $10 check and a $10 tax credit is significant, but not just because of admin cost. Sure they should be considered the same thing in classical economics, but problem is people aren’t perfect economic actors. So whereas one will see a $10 check (although probably quite a bit larger in the context of full estate tax revenues) and view it generally as found money, then spend it pumping it right back into the economy, the tax credit is much more hidden. It only comes at tax time so people must wait till that time and they only see it as a slight difference in their total tax liability or credit. This will likely not lead to $10 worth of consumption. So the desired method of distribution depends on whether policymakers would rather have folks spend or save the $.

1) All money is taxed multiple times. Usually you count taxation in terms of transactions. The money you spend on a car was taxed when you earned it.

2) The only point about the 10 dollar tax credit/refund is that it would very efficient to administer.

3) Any law limiting your ability to give away money on your death bed would be rightly declared unconstitutional. Dying people have rights. People would just pay the gift tax and that would be fine.

Another point which I have not yet raised: Once the government tinkers like this it creates mayhem. A 35% estate tax makes sense to the average person: we have a public burden, why not take a modest amount from exorbitant estates. People will likely comply with this without attempting to avert it. But with a 100% estate tax, people are going to begin twisting rules right and left. Wealthy people will attempt to give it all away on their death bed, then what do you do? The gov will invariably create rules to stop this. Where do you draw the line? A whole new field of lawyers will arise to help people get around these rules. What about spouses that decidided not to work because their spouses worked and then they got rich, does the stay-at-home spouse get the entire wealth? The gov will create rules upon rules and it will be mayhem.

1) “If you keep limiting people’s ability to earn and distribute their own wealth, you limit the incentives to invest money, invent new products, etcetera.”
An inheritance tax does not limit anybody’s ability to earn and distribute their own wealth. There is no limit whatsoever on anyone’s ability to earn their own wealth; it’s not like the government is saying that you can’t make any money over a certain amount! We are in agreement that such an act would be undesirable, but happily that is not the case. As for the ability to distribute, as Colaninno has already mentioned repeatedly, it seems you are misunderstanding the dynamics of said levy. The distributor of wealth NEVER pays the estate tax, because that person is deceased and therefore cannot actively do anything. Their heirs are paying the tax, which actually is completely unearned income much like winning the lottery.

2) “Keep in mind, also, that money was already taxed once, possibly at over 50% between federal/state/and local taxes.”
This is a very common misconception about the nature of taxation on economic activity. The claim of “double taxation” suggests that the same economic transaction is being taxed twice, which would be rather immoral. However, this is not the case. While the same money is being subjected to two distinct instances of taxation, taxes are not being levied on the money itself. It is a subtle distinction to say that taxes are levied on economic activity as opposed to money itself, but that difference is crucial when we discuss “double taxation”. A fair and effective taxation system should treat all sorts of economic activities as distinct events unrelated to the metaphysical continuity of the money changing hands, otherwise all sorts of externalities (loopholes) arise. Furthermore, an effective tax structure should not alter the market by favoring one sort of economic activity over another, unless the levying authority is wishing to achieve a desired policy objective through use of the tax code. Therefore, unless we actively WANT the wealthy to give vast amounts of money to loved ones of their choice, an equitable tax rate must be applied on the inheritance transaction.

3) “As far as your idea of appeasing the public by saying that the government tax it all and send out $10 checks…it would waste a whole lot of administrative $ sending out the checks).”
This claim is just plain false. It just so happens that Social Security, a program that is much more complex than a flat amount to everyone, is actually renowned for being incredibly efficient to administer. The main reason is that Social Security is a universal entitlement and thus escapes the major administrative costs of determining eligibility and working hard to prevent abusers. The programs with huge administrative costs are those that are means-tested and precisely targeted at a certain population, like TANF (welfare in layman’s terms). Giving a set-amount tax refund to every US citizen/resident sounds like the easiest program to administer that’s ever been created.

4) “If they know that no matter what, when they die, their family will get nothing, then they will be much less likely to take risks, invest money, work harder, etc.”
This is a vast generalization of an economic concept that’s pretty hard to quantify. Yes, in general the ability to amass personal wealth is an incentive for economic innovation. But how much of an incentive is it as opposed to other factors? We just don’t know. The situation gets even more nebulous when we consider the marginal effect of tax rates of less than 100%. Again we can say incentives are changed to some degree and the cost-benefit curve is altered, but we have no idea how much those curves shift. I believe the shift is WAY overstated by anti-tax advocates; after all Germany has pretty high tax rates and despite some demographic challenges, their economy is in great shape. Ultimately, some amount of private economic activity will be lost when taxes are imposed. But that must be balanced against the benefits of the government programs enacted with that revenue, and anti-tax extremists either ignore those benefits or diminish them greatly in making their cases for smaller government.

I have many more issues to raise, but this is getting long and there’s a lot to digest here. Maybe some other time.

I mean, don’t libertarians believe in individual responsibility? But you say this:

“Our society is based on family, and on supporting each other.”

That line of thinking completely belies your arguments here, because “supporting each other” or what I like to call the ethic of togetherness is the bedrock of, yes, liberal values. One who believes in the ethic of togetherness would say that those fortunate enough to obtain considerably more wealth than they were able to use over the course of their lives have an obligation to support those less fortunate in society. That means either they can donate it to causes they deem to be important or choose to let the government distribute their leftover money for them. Now we can debate about whether it is also desirable for the deceased to be able to bequeath a portion of their excess wealth to whomever they wish. But if you do believe in “supporting each other” as a bedrock of our society, the idea that they can give away ALL of their unused money is simply a non-starter. And to give you credit, Mr. or Ms. Q, you do at the end of this thread claim to support a modest inheritance tax, so you’re not a fundamentalist libertarian.

There is no question that letting people leave multiple of millions of dollars to their children creates societal harm through extreme inequality.

I brought up Warren Buffet because his management of his riches is basically ideal. If rich people want to choose between legitimate charities where their money goes when they dies that fine, but those charities need to be much more regulated so that they don’t exist mostly to serve the needs of their own staff or crap like taking care of dogs.

Warren Buffet’s net worth is something like 2 months of wages for the poorest 1/5th of the planet’s population. Letting 60% of that money just go to his family would be immoral.

Their kids would be more likely to contribute to society and the foundation execs that make money managing their assets would could something more productive with their lives. I’d bet you’d even see older tycoons starting new ventures. Warren Buffet is the only super rich person I know of that has stated he won’t leave money to his family, and he’s made tons of money straight through his 60s.

I’m not talking about passing any law that restricts any person’s ability to spend their money in any way it’s not already restricted. However the deceased are not persons, cannot suffer harms, and he have no particular to obligation to follow their wishes if those wishes are harmful to society. We simply should not recognize requests to leave individuals money beyond a certain limit, just as we do not recognize any number of other requests.

We know that people make societally and economically harmful decisions with their bequests such as giving the money to their family so that future generation can avoid working for potentially centuries or paying people to take care their pets.

Nothing I propose would in anyway limit any person’s ability to invest their own money productively. But if you want to keep paying higher taxes that you’re right.