Posted on 09/23/2006 6:00:31 PM PDT by FairOpinion
NCPA Report Shows Inheritances have little effect on Wealth Inequality
As Congress continues debate over reduction and possible elimination of the estate tax, a new study from the National Center for Policy Analysis (NCPA) undermines the chief argument made by proponents of the tax - that estate taxation prevents the concentration of wealth in the hands of financial dynasties. The report shows that the contribution of inheritances to the distribution of wealth in the U.S. is surprisingly small.
"It is commonly assumed that wealthy people inherit much of their wealth," said Jagadeesh Gokhale, a senior fellow at the Cato Institute who authored the report. "An individual's skills and personal choices are the most important determinants of wealth. Inheritances play only a minor role." According to the report:
"We don't need to tax people when they die to prevent dynasties and a permanent upper class," said NCPA President John C. Goodman. "This study undercuts virtually every argument that has been made in favor of estate taxation."
(Excerpt) Read more at newsblaze.com ...
Taxes ping
Common Sense is all that is required, a Study is just one more waste of Taxpayer $$$$
TT
I'm frantically thumbing through my copy of the Constitution to find the exact spot where preventing dynasties and a permanent upper class was enumerated as a Federal responsibility.
L
Rich kids squander it fast, in my observation. Not on investments.
Agreed. Principal is all that is required on this topic.
Anyone who has great wealth , has great attorneys and great tax consultants to protect it. Look at Mama T's --Theresa Heinz-Kerry's income tax and find that out, look at The Kennedy's and how they let old Rose die in Florida because the tax system there was better, even though she hadnt been in Fla, for twenty years. Look at how caroline hid John-John's money. The ones who get screwed by the estate tax are the Lower crust of wealth. The big guys slide.
not all folks who inherit from family are young... and in some cases, when the inheritance in is something indispensible, like land which may have been in families for 100+ years, while being taxed the entire time, the beneficiary might not even be able to afford the taxes to keep it...
No it doesn't. The death tax is immoral.
Great post! Thanks. Authors did an outstanding job of inductive reasoning and crystal clear prose writing to make for an enjoyable read.
Yet another of the fallacious underpinnings of the current tax system is exposed.
If anyone would like to be added to this ping list let me know.
John Linder in the House(HR25) & Saxby Chambliss Senate(S25) offer a comprehensive bill to kill all federal income, SS/Medicare payroll, and gift/estate taxes outright replacing them with with a national retail sales tax administered by the states.
H.R.25,S.25
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.Refer for additional information:
However people obtain wealth is their business. Its theirs. No one elses least of all the government. This is one of those issues that separates conservatives from liberal vermin.
And IMO the main issue with this concentration is not it’s possible economic inefficiency or qualms about its moral effects on either its holders or anyone else, it’s the undoubted differential political power bestowed by such wealth.
Exactly.
You appear to know very little about estate planning, passing along a farm or business, and taxes.
Well... perhaps... but a lot of their observations reflect their cut-off point.
The top US 1% has average net worth of around $10,000,000, this week Bill Gates is worth around 25,000,000,000, 2500x that much.
A 10M dollar net worth can insure a pretty comfortable retirement for it’s current holder, but if he or she divides that between several heirs it’s likely true the one or more will prove a sufficient wastrels to run thorough it in a life time of ordinarily extravagant spending, and that even those of average luck and financial acumen will be passing on a much more modest amount divided between their heirs.
And as for personal political influence 10M (assuming you avoided tax on the whole amount) is pin money at the national level.
But once you get up into family fortunes in the billions, a generation skipping trust will guaranteed that you can set your decedents at least unto your grandchildren up in pretty regal style, and given current rates of estate taxation and childbearing you can assume the many of your decedents four or more generations out are going to start life richer than the average of the top 1% of their day.
IMO, you can make a moral argument that individuals should dispose of their fortunes amongst family members if they wish, but that argument appears to me to weaken with each successive generation. Parents can hopefully judge the character and competence of their children pretty well, but their grandchildren much less so. And beyond that they are handing out their riches to strangers who happen to be related to them by blood, marriage or adoption – IMO at this point the recipients are pretty much disconcerted from any moral claim on their rich ancestors, and you really do have to start questioning the justice of their receiving a lifetime sinecures utterly unconnected to merit or competence.
NCPA Report Shows Inheritances have little effect on Wealth Inequality
Why is Wealth Inequality a Case for the Death Tax? Because differences in wealth are evil?
If so, I require George Soro's money now!
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