A Non-Distortionary Tax
Dead people aren’t allowed to drive. They aren’t allowed to vote. They aren’t allowed to testify in court, acquire weaponry, check out books from the library or acquire a pilot’s license. This makes sense. After all, dead people don’t have a functioning brain. As a result, we wouldn’t want them driving or voting or wandering around the local library. But there is one thing dead people are allowed to do. They’re allowed to dispose of assets, or rather, to direct how assets should be disposed of. We call that bestowing an inheritance.
Now, you might argue that the dead people aren’t actually disposing of assets. Instead, pre-deceased people are disposing of their assets, with the disposal being on hold until expiry is complete. The time in between can often be measured in many decades.
But this just makes the concept even less logical. After all, you don’t get to decide that someone else can use your driver’s license when you run out the clock, or vote on your behalf when you croak.
A second, bigger problem is that the concept of inheritance is anti-capitalist. The beauty of capitalism as described by Adam Smith is that the magic of the free market, guided by the Invisible Hand, moves resources in the direction of their highest marginal product use to society. This works through everyone’s personal greed, or enlightened self-interest. Each person faces benefits and costs, and they try to maximize the difference between the two. But for dead people, there are no costs or benefits when disposing of assets. Cadavers don’t care. (In that respect, they’re sort of like the honey badger, but quite a bit more so.)
The process of inheritance also causes the Invisible Hand to break down with live people. A person making decisions in the construction of his/her will or trust bears no cost for their decision. They might gain a benefit in the form of a sense of satisfaction for taking care of their heirs, or derive some enjoyment from the groveling of would-be heirs, but without a cost, that amounts to a free lunch. And a free lunch is a violation of the Invisible Hand. It is, or it generates, an inefficiency.
So what would be an alternative to inheritance and bequest? Whatever it is, it would need to fulfill the point of inheritance, which is for someone to benefit their loved ones by bestowing assets on them. And it turns there is just such a thing: a gift. In other words – if you want to give someone something, give it to them. Now, later, whenever. But do it when you’re alive. If you give it to them when you’re dead, you literally had your cake and ate it too.
Actually, to keep the Invisible Hand operating, outright gifts aren’t strictly necessary. Simply stick the name of the beneficiary on the asset as a co-owner. Make them part owner of the business you want to pass on to them, or give them check writing and withdrawal privileges on your bank account.
The argument against it – “but I don’t trust that person and I need that money/business/farm/collection of Davy Crockett figurines” – is, quite frankly, disingenuous. If you don’t trust them with your business or your money when they’re alive, but you do when you’re dead, it’s a sign you don’t care about what happens when you’re dead. Which is another way to say the Invisible Hand breaks down when it’s pointing at you.
All of which raises one more question – if a more capitalist system was adopted, what would happen to the assets held by a person who died? Well, if the assets were held jointly, with both parties having equal decision making power, then the surviving asset-holder would simply gain sole control over the asset. Thus, those who wish to pass their assets on to their children would simply give their children equal rights to their assets while still alive.
But if a single person held an asset in its entirety in its entirety and passed away, then the asset would revert to the government. Call it a tax. A 100% estate tax. (Small exceptions could made in the case where the pre-deceased chose to create a trust to benefit minor children, the severely disabled, or other special cases. Or maybe more effective ways to transfer and protect minors and the severely disabled could be found.)
The winner would be government tax coffers. (More on this in a moment.) The losers would be those would-be heirs that aren’t quite liked enough or trusted enough by today’s asset holders to receive joint ownership of the property.
Whatever the government collects in this way could be sold off to the highest bidder. Among other benefits, that reduces the need for other taxes. And those other taxes are collected from live people. If the goal of taxes is simply to fund government operations, less taxes need to be collected from the living if some is being collected off the dead.
And here I note that a tax on dead people has one big advantage over a tax on live people: it is closer to non-distortionary than any other I can name. Non-distortionary taxes are taxes that don’t change people’s behavior, and don’t prevent people from doing what they otherwise would do simply to avoid the tax. Income taxes and consumption taxes and VAT and all other types of taxes in use today cause people to engage in all sorts of acrobatics to pay less in the way of taxes. But the dead never change their behavior to avoid taxes. Ever. And if the pre-deceased want to give their money to their children or their friends or relatives or favorite charity, they can do so simply, out in the open, by passing on assets while they are still alive.
TLDR: tax the dead, so the living can be taxed less.
A couple notes…
1. Is this essay meant to be taken seriously? Sort of. I believe the idea is mostly sound though I’m sure it would benefit from a bit more thought. But do I think there is a snowball’s chance in Hades that such a proposal has legs? Nope. Most people like the “have your cake and eat it too” model, at least when they own the cake.
2. Parts of this post first appeared December 2006. At the time I wrote it, I was unmarried, had no children and almost no assets. Now my situation is different along all those dimensions. And I have less hair. But I like to think I am still just as adorable as I was back then. Regardless, the other day I thought about the old post and I asked myself… do I still feel the same way now that my situation has changed? So I sat down to write… and came to the same conclusion. The conclusion was so similar that I inserted a few sentences from the old essay into the new one as it fit quite well. Is that bad or good?
The obvious question is, Have you put your money where your mouth is?
Does your will say that all your assets go to the government when you die?
Inheritance is theft! So the Martians say.
The obvious question back: what about the other side of the equation? You want me to agree to more taxes when I am dead but without the compensating decrease in taxes while I am alive?
Besides… if that system were in place, my son’s name would name would be on everything I own. As it is, the only thing stopping me is my wife, and under the system I described her objections disappear.
I live in the real world and try to live by existing rules. Example: I happen to think Section 8 is poorly designed but we are still willing to rent out properties on Section 8. In fact, we have been told multiple times by Section 8 inspectors that a couple of the properties we do have on Section 8 in the city. I can disagree with the rules and suggest what I think are better rules while still playing by the rules.
Finally, the point of this post is to suggest an outcome that makes sense at the society-wide level. Without it applying to everyone, it can’t apply at all.
Right, I agree with you completely.
Why should I have to pay higher income taxes to off set some trust fund
kid not having to do anything.
Instead of priests in hospitals giving last rites, there will be lawyers on staff handling last gifts.
The Waltons and Trump would be delighted with your new tax law. They would be able to transfer billions to their heirs tax free.
There are too many ways around this. If you want to maintain control, you can issue non-voting stock that is convertible to voting stock unless the majority of voting shares are voted against it. If you are dead, you can’t vote you shares and your heirs can do the conversion. You can disinherit them by selling or giving your voting shares away in your lifetime or issuing a higher priority non-voting series.
It sounds like you are proposing an expansion of the law of escheats which allowed the king or higher ranking nobles to seize assets upon the death of someone enfeoffed to them. I think the last court of escheats held was back in 1771, and it was considered an anachronism at the time. There had been a 150 year gap between that court and the previous one.
Under the US tax code on the death of an individual stocks are transferred to the heir at their value on that date. So all the capital gains just disappear and no one pays taxes on them
actually the way to hanle the capital gains issue in the presence of an estate tax is like the way income in respect of a decedent is handled. If estate taxes were paid the could be deducted from the capital gains, just like for income in recspect of a decedent (401k and ira disributions) If no tax was paid no deduction , if some tax was paid then some is due.
Of course the fundamental clause here has never been really tried in any society, since political power used to be mostly inherited (along with the land that went with it)
The approach described in this post won’t necessarily end the trust fund phenomenon. Children of the wealthy who are trusted and liked by their parents enough for their parents to risk putting the kid on their bank accounts, etc., will still end up wealthy without having to work for it. But I am pretty sure fewer people will be inheriting large sums, and the sums will, on average be smaller, under this approach than under the approach we currently have. I think it would go some distance toward reducing wealth inequality.
We already have death bed codicils. Theoretically, at least, they only apply if the person making the codicil is lucid.
But assume the process develops as you say. You forgot the next step. There will be a first time there’s a story where a dying wealthy person adds a disreputable relative to their accounts at the last moment, and then survives, only to find that the disreputable relative has since moved all the assets out of the joint accounts and into accounts under only their name. The formerly wealthy person will be left penniless, and complaining on the news. Other wealthy people contemplating doing the same will think thrice about doing the same.
There are always loopholes that have to be closed whenever some new law gets passed.
Also… the point is for the government to seize assets that have an owner. The point is for the government to seize assets for which there was a single owner, and the owner is dead. If the owner wanted to, he/she could have put someone else’s name on the bank account / title / whatever, and the assets would have passed on unmolested.
As noted earlier in this comment, I believe this method I propose would lead to less passing down of wealth, and less concentration of wealth. That in turn would lead to less of a concentration of power.
“They aren’t allowed to vote.”
Cenkner died in Palmdale in 2003. Despite this, records show that he somehow voted from the grave in 2004, 2005, 2006, 2008 and 2010.
But he’s not the only one.
CBS2 compared millions of voting records from the California Secretary of State’s office with death records from the Social Security Administration and found hundreds of so-called dead voters.
There are a lot of illegal activities that some people manage to get away with. It doesn’t mean that people are “allowed” to do it except with a very stretched interpretation of the word.
FWIW, I note that it is very unlikely that someone is actually voting post death (barring unusual cases of people casting a mail in ballot and then dying before the election). I think it is far more likely that someone else is voting using the deceased person’s identity. Thus, the criminal in this case is not the dead person, but rather the person impersonating him/her.
Re the concentration of power issue: Concentration of power only becomes a problem if there is one child. If there are multiple children and they divide things equally power is less concentrated. For an example the Walton Family only now has power as a group whereas Sam had the power alone. Go a second generation and assuming at least 2 kids each and power is greatly dispersed. Or take John D Rockefeller. His son inherited most everything, and John D. just gave his girls an allowance. However John D Junior had several sons so the inheritance got split up, Then the Jay Rockefeller generation has another split so they were definitely well off but not in the very super rich.
Further Gates and Buffet have been spreading the idea that leaving a lot of money to the kids is a great way to spoil them. (Yes pay for education but then only a minimum allowance). If the Gates/Buffet idea continues the then power will not concentrate.
For a further example look at the Carolingians and how by not doing primogeniture the empire of Charlemagne got split up.
I lived in Arkansas in the late 90s. There were plenty of stories about the Walton offspring, particularly Alice, and the power they exerted. I note that the last estimate I saw for Alice Walton’s wealth was north of 30 billion. Of course, it is possible that whatever she inherited put a crimp in her style and she’d be worth more had her father been a janitor, but I doubt it.
Another anecdote… a couple of years ago I attended an event where the headkiners were Japanese Prime Minister Shinzo Abe, then Commerce Secretary Penny Pritzker, and then Ambasador to Japan Carolyn Kennedy. The latter two are at least third generation wealth/influence, and both their generation and the preceding one had multiple siblings. I think the latter may be true of Abe as well but I am not 100% sure. FWIW, Abe did come across as a person with some substance.
Yes… anecdotes are not but data, but it I think it is fairly evident that wealth doesn’t dissipate as easily as you state.
I can’t even fathom a legitimate policy goal in forcing everyone to distribute their financial assets before their death, either by gifting their assets tax-free or making everything they can a joint tenancy—bank accounts, real estate, businesses, cars, securities.
That people can’t pass on their driver’s license or voter registration just doesn’t strike me as a legitimate reason, since I actually recognize material distinctions between driver’s licenses and voter registrations, and financial assets: In simple terms, the first two are not fungible, given their actual purposes, and instead are particular to the holder of the license or registration, and the third one is fungible.
Nor does the full employment of lawyers who specialize in testamentary asset protection and distribution seem like a legitimate goal. Nor does the obvious favoritism of people, and the heirs or people, who can afford not to rely during their senior years on, say, the proceeds of their retirement-savings accounts. And those who do not wish to retain the right to sell their home at some point, without the permission of, say, their kids. And those who do not die unexpectedly before their retirement accounts have matured and can be transferred.
Why the need for a convoluted law that would result in more revenue to the government from the assets of people who died, albeit through a highly and irrationally discriminatory—and HIGHLY distortionary—law, simply to get more revenue from what otherwise would be inheritances? Why not simply apply an estate tax to smaller estates, and enforce gift-tax laws?
God. What a dumber-than-a-rock proposal.
And, no, Lyle, Bill Gates’ three children would each be exceedingly wealthy even though Gates’ estate will have to be divided by three. What a dumb claim.
It sounds like it’s OK if the ownership is given away while I’m alive. So I could put all my assets into a partnership, make myself the general partner (sole decision maker) and give away 99% of the value as LP stakes to my kids. The partnership agreement could pay me for my GP services until I die. And it could name the kids as the replacement GP when I die. So no estate tax then. I like it.
History reflects that a family at most has significant power for a couple of generations in the absence of primogeniture.Looking around it appears that there are about 12 grandchildren of Sam in the Walton Family, One of Sams children has already died so that money went to his wife. With 12 in the next generation it becomes harder to get agreement on anything, and you step down to the 9 to 10 billion club for them.
For a longer view look at the Rockefellers who where once the richest folks in the US. It should be noted that the only Rockefeller on the Forbes 400 is the last living grandchild of John D Senior. With 150 descendents the 11 billion dollar worth of the family divided up does not get one into the uber rich class. (Jay Rockefeller 4 th generation is suposedly worth a bit less than $100 million.
Here is a link an article. http://www.philanthropyroundtable.org/topic/excellence_in_philanthropy/the_transience_of_american_wealth
The only way a family retains long term economic power now would be to have only one child for each generation.
So it partly depends on the length of view if you go 3+ generations dynasties don’t really exist in the US
In addition review the list of richest folk in the US over history, Start with Astor, then Vanderbilt, followed by Carnige, Rockefeller, Ford, more recently you get Gates, Buffet Zukerberg etc.
If the estate was created by legal means and taxes were paid along the way accordingly. I wouldn’t care if estate taxation were entirely dropped. But drop the tax cost basis rebasing. The heirs can squander the benefit or use it more effectively and either way presents ample opportunity for taxing.
Hey, Lyle, you’re right! If we wait four generations, Gates’s descendants will have to scrape by on the inflationary equivalent of $100 million.
Silly me. That hadn’t occurred to me.
the trouble with people who think they have the clever answer (to what problem?) is they can’t think of everything.
you don’t give your money to your kids while you are alive because you need to protect your money as long as you can not from the kids, but from their bankers.
now, if you can’t imagine someone through no fault of their own suddenly owing a bank a staggering amount of money, you don’t know much about business or history.
“But if a single person held an asset in its entirety in its entirety and passed away, then the asset would revert to the government.”
Interesting phrase — “revert to the government.” As though the asset belonged to the government in the first place.
But you did answer my question — have have not willed all your assets to the government upon your death. You probably also donate to private charities instead of to the government.
The trouble with this particular person who thinks he has the clever answer to this specific problem (of allowing too much wealth and consequent power to be passed from one generation to the next), is that he can’t think of ANYTHING, Dale. Including that his solution wouldn’t solve the problem, and would instead allow the actual wealthy, who don’t rely on their accumulated wealth to live on in their senior years, to ensure avoidance of any gift or inheritance taxes.
He’s like his hero, Donald Trump. He can’t recognize even the most obvious distinctions; can’t engage in a more-than-one-step analysis, and therefore understand or even recognize the concept of actual purposes of things and consequences of policies; and instead just takes a single fact (real or imagined, although in this instance real), such as that driver’s licenses and voter registrations aren’t transferable after death, and bases some idiot proposal on it.
Of course, driver’s licenses and voter registrations aren’t transferable pre-death either, but … hey … recognizing that would require a moment’s thought.
Professional licenses aren’t transferable, either, although I guess Kimel thinks his physician can gift his or her MD and medical license and residency certificates to descendants upon retirement. Or something.
So a 100% estate tax and no gift tax? That doesn’t make sense. Maybe I am reading this wrong. Are life insurance proceeds part of the estate to be taxed at 100% or are they a gift?
Currently, life insurance proceeds are not taxable, since the premiums are not tax deductible.
Even under MK’s kleptocratic plan, such proceeds should not be taxed, because they DO have a cost to the “giver” — the premiums paid during his lifetime.
1. Depends whose name is on the policy.
2. Life insurance policies are basically tax avoidance schemes. My proposal eliminates the need for such schemes… provided those with assets trust the people to whom they wish to pass the assets.
1. There are people who insist that all taxes are theft. This is merely rearranging the tax structure.
2. I wrote a post about this a long time ago – perhaps it needs revisiting – but only three things are ever used to guarantee possession of an asset: stealth, raw force, or the government. And the government does it through force. What makes your bank account safe – what keeps someone at B of A from stealing your entire account – is fear of the government, not fear of you or fear of B of A. That is a service the government provides its people. In general, the government only provides services to live people. There is no particular reason why the government should provide the same service to dead people. In that case, the asset goes to whoever is strongest. And that is the government.
3. This is silly:
It is silly in part because I did answer the question on March 10 at 11:08 AM. But I can try to simplify.
Your question implies that I should be willing at this time to impose the costs of the proposed system (which would be borne by my son) but without the commensurate benefits to that system.
Think of it this way. I propose that Chemo is better than Cancer. Asking me whether I am undergoing chemo at this time doesn’t make for a gotcha unless it turns out I have cancer and am refusing chemo. In that case, I am not practicing what I preach. But at this time, I am (to the best of my knowledge) cancer free.
Surely you remember me likening Mr. Trump to Caligula. I can only wonder what passes for a term of endearment in your life.
What would stop unlimited gifts just prior to death? Do you propose a ceiling on tax free gifts?
Death benefits can be taxable in many instances. Violation of Section 101(j), transfers for value, etc. Third party purchasers of life policies in the life settlement market pay taxes on the death benefit. I’ve seen a case where the business paid the premium, the business owner was the insured and owned the policy and the beneficiary was the business owners spouse. The IRS, during audit, deemed the death benefit subject to ordinary income taxes.
Lastly, life insurance for 99.9% of insureds is protection, not a tax avoidance scheme. In addition life insurance in estate planning is a vehicle to make sure the taxes are paid, not avoided.
And when you indicate that a taxable event would occur depending on the names on the policy, that is essentially our current public policy.
I don’t remember that you likened Trump to Caligula. I remember that you likened our immigration laws to the Praetorian Guard and warned that if we did not change our immigration laws as Trump was proposing, WE would suffer the same fate as Caligula.
Not sure why you wonder what passes for a term of endearment in my life. And what relevance you think terms of endearment have to any of this. Whatever.
Details, details, Little John. Don’t trouble Mr. Kimel with details.
i would agree with you about force being the ultimate guarantor of possession (until someone stronger comes along), but for most people most of the time their real security rests in culture or convention, the common understanding of people which they think of more as a religion than as something like a peace treaty: it is”wrong” to take what is not yours. i think kids may figure this out for themselves about the age of two though there may be some parental teaching involved.
then there are people who don’t learn it, or can’t learn it, or unlearn it, or over-learn it…. like Warren who thinks of government as theft because he can’t understand that if people are going to live in society they have to “share” and sharing at the community level has never worked without “force,” the trick for people being to find a way to keep the limits of that government force at a level where it is for the common good and not mere tyranny by what the Right calls “government” or the Left calls “the rich.”
“There are people who insist that all taxes are theft.”
There are also people who insist that NO taxes are theft.
“In general, the government only provides services to live people. There is no particular reason why the government should provide the same service to dead people. In that case, the asset goes to whoever is strongest. And that is the government.”
Might makes right?
Isn’t our government supposed to be “of, by, and for the People”? One of the reason governments are instituted is to protect property rights. And property rights include the right to decide who will get one’s assets when he dies.
You believe that the government should get all your assets when you die. So put that in your will. Then I will take you seriously.
‘Warren… thinks of government as theft because he can’t understand that if people are going to live in society they have to “share” and sharing at the community level has never worked without “force”…’
How did this country survive before income tax?
‘[The] trick for people [is] to find a way to keep the limits of that government force at a level where it is for the common good and not mere tyranny….’
Certainly taking everything would be tyranny — the Tyranny of the Proletariat?
Pardon me. I forgot that you misinterpret everything. After all this time I shouldn’t be surprised how you read the Caligula v. Valens post.
I will defer to your knowledge of insurance markets. You are the insurance guy, after all, and my interaction with that market amounts to holding a few policies.
That said, the industry has clearly evolved to structure itself according to current tax laws. If tax laws changed dramatically, so would the insurance industry.
Again… something has to be taxed. It could be income, imports, consumption, whatever. Alternatively, the government can fund itself by owning large chunks of the economy a la Singapore. But if there is no government funding, there is no government, and nobody to enforce laws.
Actually, your intent, your point, in that post was unabashedly exactly what I’ve described. You made that exquisitely clear, not only in the post itself but in the Comments thread.
Your standard modus operandi is exactly what you’ve just demonstrated yet again: When cornered, deny you’ve said what you said, or meant what you made thoroughly clear you meant.
You emulate Trump quite well, Kimel, in substance and style.
“Something has to be taxed.”
Does EVERYTHING have to be taxed? Does everything have to be taxed so much? Over one third of our GDP is taken by the government. That’s ridiculous.
That’s far beyond just “enforcing laws,” and the U.S. government has usurped far more power than was ceded to it by the States, which is why it demands so much in taxes.
the “tyranny of the proletariat”
precisely my point. or did you think you were disagreeing with me?
as for “might makes right” . .. i guess my point would be “might makes wrong” but you seem too ready to believe that “government makes wrong” and “money makes right.”
it’s a little more complicated than that.
No, Coberly, I think we were in agreement that MK is proposing tyranny.
‘[A]s for “might makes right” … [I] guess my point would be “might makes wrong” but you seem too ready to believe that “government makes wrong” and “money makes right.”’
Well, MK seems to think that might makes right, and that the government is the most powerful force, so it should own everything.
So if your point is that “might makes wrong,” and the government is the ultimate MIGHT, then government makes wrong. Is that not the most common situation world-wide?
THIS government was supposed to be different. That is why it was given specific, enumerated powers. It has usurped far more power than the States ceded to it.
the people who crafted the constitution knew that governments were dangerous, but they also know that government was necessary, so they tried to create a system of checks and balances that would avoid a tyrannical government.
they also know that the united states was established by force against the kingdom of great britain, so they might have been less sympathetic to your idea that “original intent” is the limit of what governments, or the people, can do.
and they had tried a confederacy. it didn’t work.
so they wrote a stronger constitution. and because they knew the country would not survive if it was not united they were careful to include compromises.
“states” do not make laws. people do. and the compromises were between the people of the North (mostly the rich people of the north, but there was more “democracy” in the north than in the south) and the slave owning rich of the South.
The Slave owners lost their claim to the “states’ rights” compromises of the constitution when they fired on Fort Sumpter. Just as the “shot heard around the world” at Lexington and Concord changed everything for the “rights” of Britain in America, the bombardment of Fort Sumpter led to consequences that extinguished the state’s rights compromises with slave owners (while preserving the states rights that we continue to enjoy today.) when you holler “states rights” you are just repeating the propaganda that the slave owners used to inspire the civil war.
you still don’t see that you can’t not have government. and that “the rich”, money, will Be the government unless the people are able to protect themselves from the money power. “the rich” will be just as tyrannical, more so, than the “federal government” has ever dreamed of being so far.
but i do agree that there are those on the Left who would impose their own brand of tyranny if they ever get enough power.
i’d love to be able to say to hell with both sides. but reality does not give us that choice.
Your response is Beverly-ish. If I was into might makes right and kleptocracies, given the government has the most power, wouldn’t I be in favor of the government taking more from the living too?
Well, here’s what I wrote in that post:
I also noted the man’s lack of self-control, and that he alienated everyone around him.
In my house, none of that qualifies as a positive description of a person. So once again, what passes for a term of endearment in your house? “Vile homicidal maniac” perhaps?
The only positive thing I wrote about Caligula was that the Roman Empire survived him.
it sounds to me like you have talked yourself into believing the government can take money from the dead (and no one is hurt).
no. the money cannot be taken from the dead. they no longer have a claim on it. it is taken from living people… heirs.
more than that, the idea of leaving something for your children is at least as old as history. you may think that taking away the pleasure living people have from contemplating leaving something for their children is merely taking money from dead people. but you’re dead wrong.
a lack of concern for people’s feelings (while they are alive… which are affected by what they expect to happen after they are dead) is at least the beginning of tyranny or something worse
if not the kind of thing that happens under “godless communism” at least it is the sort of thing that politicians scare people with by claiming it’s what socialism leads to.
i can see some good reasons to incorporate some of the ideas of socialism into an essentially free-enterprise society, but i get put off when i listen to leftists talk as if the feelings of the people they don’t agree with politically don’t matter.
this is not to accuse you of being either a leftist or a rightist, but some of your recent writings (most of them) have left me feeling that you really don’t give a damn about people.
Thanks Mike and you’re right. A perfect example is the estate tax. Your a data guy. Go look up how many Form 706’s were filed in say 2000 compared with 2014. A drastic decrease…all thanks to a change in the estate tax. Which in turn has changed insurance company product mix and to a lesser degree pricing.
Coberly, you say, “[The] people who crafted the constitution… might have been less sympathetic to your idea that ‘original intent’ is the limit of what governments, or the people, can do.”
To the contrary, the 10th Amendment spelled it out very clearly: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”
They not only put limits on what the UNITED STATES government can do, they laid out the ONLY things the United States government could go. (This was, after all, a constitution for the establishment of a new government.) Only later were limitation put on the States.
‘“states” do not make laws. people do.’
In this case, you will note that I refrain from correcting your lack of capitalization. That is because there is a difference between “state” and “State.” The latter DO make laws. The former is a geographic area governed by the State.
“[You] still don’t see that you can’t not have government.”
No, I do not see that the U.S. government needs to usurp powers not ceded to it by the States.
Mike Kimel, you say my response is “Beverly-ish.” Thank you.
“If I [were] into might makes right and kleptocracies, given the government has the most power, wouldn’t I be in favor of the government taking more from the living too?”
Aren’t you? Weren’t you a Bernie supporter? Do you not favor more taxes to provide for universal healthcare and universal minimum income?
1. I was not a Bernie supporter. I stated a few times that I wasn’t happy about any of candidates for Presidents of any party who achieved enough stature to be mentioned in the press.
2. I have written about optimal income tax rates for at least 10 years now. I favor taxation that maximizes long run economic growth. I have already shown that for federal income tax rates, that implies the top marginal tax rate should be higher. But I have not added up what that does when you include all other taxes including property taxes, consumption taxes, gasoline taxes, tariffs, etc. I do not know whether the total tax burden should go up or down. I just know that the income tax burden should go up. My sense is that taxes on externalities should be increased to compensate those who pay an unofficial tax by bearing the burden of those externalities. But the goal there is not so much to collect taxes as to force those who create negative externalities to do so less and/or eat the costs they create themselves. (That would be a more capitalist outcome, after all.)
Universal healthcare is something I favor, sort of. Structure matters and it affects costs. It’s a topic for another post. I haven’t seen a good argument for UBI yet though.
“I favor taxation that maximizes long run economic growth. I have already shown that for federal income tax rates, that implies the top marginal tax rate should be higher.”
No, you have not. You tried to, and failed. There were simply too many other factors involved, and your analysis did not account for any of them.
But thank you for admitting that you want the government to take more from the living, too.
I could agree with your last comment. You make it a bit harder by posting on other things where your analysis is less convincing and your language lends itself to ideas which are both old and more dangerous than you seem to realize.
There isn’t much hope of converting Warren. He as one rule to rule them all and in the darkness bind them.
you seem to have missed the point that before there was a Constitution there was a war that “violated” the constitution of the British Empire, exposing the founding fathers to punishment for treason if their war failed.
after that war there was an attempt at a “confederacy” that demonstrated that such a “constitution” would fail.
the slave aristocracy, whose “rights” had been “respected” in the “original meaning” of the Constitution lost those “rights” by secession and war. the tenth amendment has been clarified by the thirteenth fourteenth and fifteenth amendments, and by subsequent Supreme Court interpretations of just what the tenth amendment (now) means.
you can choose to insist upon your fairy tale idea of government and holy script, but no one will take you seriously except the new-days slave aristocracy that uses your foolishness to enslave you.
i do not exaggerate about the new slave aristocracy. they are mostly the same people as the old slave aristocracy and they certainly have the same morals and purposes. the difference being that the civil war taught them that white is as good as black and it’s cheaper to rent than to buy.
as for my use of capitals and other punctuation idiosyncrasies, you need to read more good literature. you would find out that the rules you learned in the eighth grade were, well… grammar school.
i apologize if my writing is not clear or otherwise difficult to read. i do not apologize if it offends your grade school ideas about what is right and handed down from god.
First, Coberly, the British Empire did not have a constitution to violate. Nonetheless, I would like to see some of those who have violated the U.S. Constitution by their usurpations prosecuted for treason.
Second, nothing in the Thirteen, Fourteenth, or Fifteenth Amendments did anything to “clarify” the Tenth.
Finally, I am sorry that you never got past grade-school grammar. I recommend a copy of Warriner’s English Grammar and Composition if you wish to be perceived as having more than a grade-school education.
thank you for your enlightenment.
I assure you the British are very proud of their constitution. But i was using the word to stand for the “basic law” of any “state.” I assure you the King of England had the same concept of treason as Lincoln… and the subsequent Congress was forced to apply to secession and making war on the United States.
as for your grammar book, i invite you again to read some real books by good writers. you may… or may not… learn something.
As for clarifying the Tenth, the 13th etc definitely limited its scope. Clearly it did not “clarify” it to your ilk and understanding.
“As for clarifying the Tenth, the 13th etc definitely limited its scope. Clearly it did not ‘clarify’ it to your ilk and understanding.”
CAPITALIZATION!! He CAN be taught!! 😀
No, the 13th Amendment did not limit the scope of the 10th in any way whatsoever. It ceded additional power to the U.S. government. That is how things are SUPPOSED to work — when sufficient consensus exists that the U.S. government should have powers not already delegated to it, the Constitution is amended and the States cede that power to the U.S. government, rather than having the U.S. government just ignore the 10th Amendment and usurp the desired power.
i defer to your sophisticated understanding of how the constitution is interpreted, applied, and modified by an evolving sense of what makes sense in detail and over time…. short of actual amendment or civil war.
and also your profound grasp of the Importance of Capitalization according to the rules handed down by GOD.
Speaking of rules, I also like the Oxford Comma:
This right after I wrote:
I would have thought by now there would be some agreement among readers that whether you agree with me or not, I will state what I think data shows. Now you are essentially calling me a liar.
You may not like the results of the latest research, and I may not like the results of the latest research, but either we come to terms with it, or we cede the field to the people who do like the results of the latest research. The fact that unsavory people like something is not an argument that it is not true.
I was exposed to enough “research” in my career to acquire a degree of skepticism about “latest research.”
i think if you want to play with unsavory people you expose yourself to being thought unsavory yourself if not becoming unsavory yourself or abetting unsavory outcomes.
“I just know that the income tax burden should go up.”
How do you know that? That is NOT what you looked at, was it? No, you looked at the top marginal rate only. That is NOT the income tax burden, which is the percentage of total income paid in taxes for the entire population. Neither did you consider that the tax burden was actually less skewed against the rich than it is today.
We also had no global competition.
If you don’t believe me, perhaps you will believe Bloomberg: https://www.bloomberg.com/view/articles/2013-01-02/1950s-tax-fantasy-is-a-republican-nightmare
I have been doing this a long time. Here is one example:
Now your Bloomberg article is by Amity Shlaes. I once wrote a post explaining the problem with Shlaes logic:
Wow, MK, you’ve been doing things wrong for a long time, haven’t you?
In that article, you are conflating total tax burden with the income tax burden. You make no mention of how the tax burden has shifted to the top end. You make no mention of the fact that it was the recession triggered by the 9/11 attacks that lowered the tax burden in the first two year of Bush the Second, nor of the fact that it was the policies of the Democrats that greatly increased the government in the last two years of his term. Nor do you address the fact that we had almost no global competition during that Golden Age for which you pine.
Sorry Beverly, er, Warren. The point of building a model is not to stick a zillion variables in it. Variables in a model aren’t like ornaments on a Christmas tree. The point of building a model is to explain the world. And achieving the same explanatory power with fewer variables is better than doing it with more variables. The model to which I linked certainly generates a decent forecast for economic growth. And if nothing else, they show pretty well that in the past however many decades, administrations that cut the federal income tax burden early on generated less growth in subsequent years than administrations that raised the tax burden. Put another way… just about everything you want to believe about taxes contradicts the available data.
and the point of statistical analysis is to get an estimate of the probability that you can ignore the variables not examined.
that turns out to be the tricky part.
for what it’s worth i thought Kimel had succeeded with his analysis of presidents and gdp… the problem was simpler… than he was with his analysis of immigration of undesirables and gdp… too much likely covariance unexamined.
but then i liked the first outcome better than the second.
the trickiest part.