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Creative enterprise is not stimulated by vast inheritances. They bless neither those who bequeath nor those who receive. [...] A tax upon inherited economic power is a tax upon static wealth, not upon that dynamic wealth which makes for the healthy diffusion of economic good.
—Franklin Delano Roosevelt, 1936
Rich people,
That reek you may have caught a whiff of is the aroma of Republican congressional leaders eager to continue a 2010 estate-tax cut worth an average of $1.1 million for roughly 7,500 multi-million-dollar estates. At the same time, they don't want to extend a change that was part of the same 2010 budget deal. That change strengthened the Earned Income Tax Credit (EITC) and Child Tax Credit. Failure to extend the change now would affect 13 million working-class families, costing them from a few hundred dollars to $2,500 annually.

The beneficiaries of this raw exercise in class warfare aren't hurting, to say the least. They are scions of the wealthiest Americans. Their immense wealth is built on growing inequality with which we've become all-too-familiar, most of us personally familiar. The median net worth of the middle class, those households in the 40th to 60th economic percentiles of the population, fell 29 percent between 2007 and 2010, to $65,900. The top 10 percent saw their net worth rise  to $2.9 million. The top 1 percent boasted a net worth of $8.4 million. That vast concentration of wealth, built upon vast inequality not seen since the 1920s, delivers political inequality for its owners. Out of that political inequality come changes, in and out of the tax code, that exacerbates the economic inequality. The plutocrats desire to take us ever onward down this path.

But, of course, even making mention of a wealth tax generates screams of "socialist." And despite its clear benefits, its innate fairness, the whole idea gives plenty of people who are nowhere near wealthy, including many liberals, the heebie-jeebies. That's a drag. Not because a wealth tax would solve all of America's economic problems. But a direct annual tax on household wealth would raise revenue, reduce inequality and, along with it, reduce unequal political power.

That obviously is not where we're at politically. Instead, compromises are cut while the plutocrats never surrender their ultimate goals. Let's take a look at the trajectory of the closest thing we've got to a wealth tax right now.

(Continue reading below the fold.)

From 2001 to 2009, changes were made in the tax code that eliminated the levy on 99.76 percent of the estates of people who died. Starting in 2002, estates could pass on $1 million tax free to their heirs, $2 million for a couple. Anything more than that was taxed at 50 percent. By 2009, however, that exemption had been raised to $3.5 million, $7 million for a couple, with amounts over that taxed at 45 percent.

Due to a quirk in the tax law, heirs of anyone who died in 2010 paid zero estate tax. Zero is, in fact, the goal of all those who intone "death tax." One of those is Mitt Romney. But he's got plenty of company.

Net worth chart
When negotiations over extending the Bush tax cuts were under way in 2010, Sen. Orrin Hatch and Sen. Mitch McConnell, both Republicans, introduced a proposal exempting from estate taxes the first $5 million inherited by an individual, $10 million for a couple (and indexed for inflation). Anything over that amount was to be taxed at 35 percent. The heirs of estates larger than the already generous 2009 exemption of $3.5 million thus gained an additional million-dollar-plus average tax break.

That's what we have now. If the law isn't changed by Dec. 31, the estate tax reverts to a $1 million exemption with the overage taxed at 55 percent. Republican leaders want to maintain the $5 million inflation-indexed exemption. On their way toward wiping out the estate tax altogether.

Who are the beneficiaries of this policy? Americans in the top 0.24 percent of the population.

The Obama administration went along with this deal two years ago because Republicans demanded it in exchange for their votes maintaining the modest increases in the EITC and Child Tax Credit for some categories of low- and medium-income people. These had been put into place as part of the American Recovery and Reinvestment Act, the stimulus act, passed in the spring of 2009.

Now, as Chye-Ching Huang and Nathaniel Frentz at the Center for Budget and Policy Priorities write, McConnell and Hatch (who themselves are in the top 0.1 percent of the population) have joined colleagues in the House and Senate who want to make the outrageous 2010 estate tax break for the rich permanent while dropping the improved benefits for lower-income Americans:

[T]he estate-tax break would cost $119 billion over ten years in lost revenue, and would increase the deficit by $141 billion over the same period when the interest costs are included, according to estimates from the Treasury Department and the Office of Management and Budget.
But surely that 0.24 percent are job creators and the tens of billions in extra cash directed their way would generate jobs worth far more than that paltry sum. Right?

In fact, as we have seen in analyses over and over again, lower tax rates do not lead to more job creation. And while those analyses focus on the income tax rate, particularly the rate charged against dividends and capital gains, there is no reason to believe the matter is any different when it comes to the estate tax.

The income tax break for lower-income working people is another matter altogether.

As Huang and Frentz explain, the Congressional Budget Office and Moody’s Analytics found that the EITC and Child Tax Credit tax credits directed at moderate-income families have had much more “bang for the buck” than the high-end Bush tax cuts.

For many lower-income working families, the impact of losing the tax-credit improvements would be substantial. For instance, a married couple with three children that has earnings at the estimated poverty line for 2013 ($27,713 for a family of that size) will receive $1,934 less in combined CTC and EITC benefits next year if policymakers let the improvements expire. Similarly, a single mother with two children working full time at the minimum wage—and earning about $14,000—will receive a CTC of just $173 in 2013 instead of $1,725.
The EITC and CTC tax benefits make life just a little easier for working people in tough economic circumstances. The high-end tax break given to that rarefied economic stratum Hatch and McConnell favor reminds us of just how right Thorstein Veblen was.

As they themselves have made perfectly clear, the right-wing "reformers" won't be satisfied until the estate tax is completely abolished. That, analysts say, would cost the Treasury at least $670 billion in lost revenue and increased interest charges on the national debt. Not being yet able to ram abolition of the "death tax" through Congress, advocates are determined in the meantime to nick it repeatedly, surrendering ever more revenue to a comparative handful of Americans who can most afford to do pay up.

That's half of what the current battle is about. The other half, the even more infuriating half, is about lopping off tax breaks to Americans of moderate income (or using them as hostages in "negotiations" over rich-people's tax cuts). Repealing the estate tax, as Mitt Romney is eager to do, ought never to be on the agenda except as a laugh line.

Wealth chart showing actual distribution compared with what peoole think it ought to be.
(Click here for a larger image)
Not only is very little of the inherited wealth in America taxed, but that which is gets taxed at an incredibly low rate, about three percent, according to the Brookings Institution.

How exactly should estates be taxed? For the little fix, back to 2001. The million-dollar exemption was reasonable a decade ago. It's still reasonable. Resetting to that level would bring into the Treasury, the Tax Policy Center estimated a year ago, $532 billion extra between now and 2020.

For the bigger fix, after making provisions for small businesses and family farms, taxing inherited assets above $1 million at 50 percent, with surcharges as those assets pass $5 million and $10 million and more, would generate hundreds of billions of dollars in revenue over a decade. But we should not stop with taxes on inherited wealth. All wealth above a certain threshold ought to be subject to an annual levy.

For many of us on the left, this is a matter of simple justice, a matter of economic democracy. But there's another issue that Nobel laureate Joe Stiglitz explains in his book, The Price of Inequality:

From the right, you sometimes hear the argument made that inequality is basically a good thing: as the rich increasingly benefit, so does everyone else. This argument is false: while the rich have been growing richer, most Americans (and not just those at the bottom) have been unable to maintain their standard of living, let alone to keep pace. A typical full-time male worker receives the same income today he did a third of a century ago.

From the left, meanwhile, the widening inequality often elicits an appeal for simple justice: why should so few have so much when so many have so little? It’s not hard to see why, in a market-driven age where justice itself is a commodity to be bought and sold, some would dismiss that argument as the stuff of pious sentiment.

Put sentiment aside. There are good reasons why plutocrats should care about inequality anyway—even if they’re thinking only about themselves. The rich do not exist in a vacuum. They need a functioning society around them to sustain their position. Widely unequal societies do not function efficiently and their economies are neither stable nor sustainable. The evidence from history and from around the modern world is unequivocal: there comes a point when inequality spirals into economic dysfunction for the whole society, and when it does, even the rich pay a steep price.

Most discussions of taxing the rich are about taxing their income. Here, too, the plutocrats are hard at work. Paul Ryan, a recent arrival among the 0.1 percent—that rarefied group that pays lower effective income tax rates than anybody's secretaries—wants to zero out the tax on capital gains and dividends to bring those rates even lower.

That would, of course, allow for an even greater accumulation of wealth, of social and political clout, of inequality, and thus should be fought against. Not with compromise but alternative tax approaches that raise the marginal income tax rate on those who make the most, restore progressive bracketing, reinforce enforcement of the tax code.

Included in these alternatives should be a wealth tax, one that is itself progressively graduated. Wealth taxes have drawbacks, administrative complexities, plus, of course, evasion. This has caused some nations which once imposed them to give them up. But we're innovative we Americans, we're can do, and no obstacle bars us from coming up with the means and the methods to adopt and implement an equitable, enforceable wealth tax.

Other than, of course, the political obstacles.

Overcoming those is a matter of getting the right leaders into place, something the growing concentration of wealth conspires to make ever more difficult. Which means we should get started now.

•••

A state-by-state Center for Budget and Policy Priorities analysis of how many people would be affected by maintaining the 2010 estate tax levy as is can be found here.

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Comment Preferences

  •  Hey, trickle down works! Poor have YACHTS now! (39+ / 0-)

    P1040019

    Image 1: Abandoned boats rafted up and used as residence, Portland, OR 10/20/2012

    You have exactly 10 seconds to change that look of disgusting pity into one of enormous respect!

    by Cartoon Peril on Sun Oct 21, 2012 at 07:48:57 AM PDT

  •  There are some people who will not be satisfied (23+ / 0-)

    until no one else has anything.

    We've been wondering how to get through the clutter and reach low-information voters. Mitt haz it.

    by Crashing Vor on Sun Oct 21, 2012 at 07:51:10 AM PDT

  •  It is a matter of justice. If you inherited it, (20+ / 0-)

    you did not build it. I think that all estates should be taxed. A spouse/partner should be able to leave his/her money and house to that partner, but once both are dead, the remaining money should be taxed. My mom left a very tiny estate. My mom left $1500 to each of my kids. My youngest, who is a college student with a work-study job, would not have paid any taxes on the money anyway. There is no reason why my two older sons, both of whom have jobs, should not pay tax on that money.

    •  Would you think it fair if your kids (5+ / 0-)

      were to have to pay 60-70% of that $1,500 while someone who inherited $15 Million paid 60-70%?

      I, personally, would not.  

      I do not believe that there is anything wrong with people working to not only protect themselves financially during a lifetime, but also to help their families including children and grandchildren.  I do believe that that "help" should have limitations on it, but taxing your kids' on $1,500 is not particularly productive.

      The point on the estate tax is not that "everyone" should pay some flat rate - it shouldn't be some sort of punishment or moral debt collection that we all must pay equally - it should be for people who can afford a progressively much higher tax rate than your family can.  If your son's who have jobs are lucky, they can put the money away for a rainy day, but that tiny amount of money would be nothing in the face of a deluge suck as critical illness or something.

      Anyway, it seems to me that before we start talking about taxing your kids on $1,500 we should be working on reestablishing a progressive tax strategy that would be far more equitable and fair than what we are currently doing in this country.  

      In this day and age talking about taxing your Mother's "tiny" estate is like talking about taking potatoes from the serfs.  The state of income inequality and unfair taxation is that bad.

      •  I think that inheritances should be taxed in a (7+ / 0-)

        steeply progressive way. Of course, I favor a steeply progressive income tax as well.

        •  Let me add that I think income is income. (6+ / 0-)

          I think that dividends and interest should be taxed as regular income. When you go to pay your electric bill, the source of your income does not matter.

          •  The point that I am making is that for (0+ / 0-)

            more and more people income is barely subsistence - paying the electric bill is tough for them - while for a small, elite class of people the electric bill is something that is paid by their accountant - they've never probably even seen one.

            Mitt Romney would love to focus on your first comment in our exchange to the exclusion of all else.

            What got lost in the "binders full of women frenzy" was Romney's comments about making the tax code "more fair" by eliminating any taxation on investment income and lowering the deductions for all Americans to $25,000.  That's TOTALLY fucked up six ways from Sunday.

            Mitt Romney's express mission is to put the tax burden entirely on people like your sons and at the same time to remove his own sons from any and all responsibility to contribute.  Your sons under his plan will be caught in an endless feedback loop of poverty (or struggling to avoid it) while his will be safely tucked into their own private existence of endless wealth.

  •  I'm just wondering exactly what "wealth" (3+ / 0-)
    Recommended by:
    BOHICA, rl en france, a2nite

    is defined to be in the colorful "OUT OF BALANCE" graphic near the bottom of the diary.  Because it shows that the bottom 80% has almost 20% of the wealth in the country, which (while still obscenely low) is considerably higher than the 11% and 5% shown in earlier pie charts for net worth and financial wealth, respectively.

  •  Shorter (27+ / 0-)
    "The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness."

    – John Kenneth Galbraith

    White-collar conservatives flashing down the street, pointing their plastic finger at me..

    by BOHICA on Sun Oct 21, 2012 at 08:00:03 AM PDT

    •  Great quote (3+ / 0-)
      Recommended by:
      rl en france, Puddytat, AmazingBlaise

      "We don't need someone who can think. We need someone with enough digits to hold a pen." ~ Grover Norquist

      by Lefty Coaster on Sun Oct 21, 2012 at 09:06:59 AM PDT

      [ Parent ]

    •  Also, a WEALTH TAX is simply a tax on wealth. (1+ / 0-)
      Recommended by:
      ozsea1

      Tax the real estate and financial holdings for our multimillionaires.

      A base at $10,000,000 wouldn't hurt anyone.

      Set the bottom rate low. 0.1%, for example.

      Escalate the rate to 2% for wealth above $1-billion. Inflict annually.

      This is sharia at its best. The Muslim requirement for charity with family donation proportioned to wealth.

      It also chews into the federal deficit. And encourages a different attitude among the wealthy, as they would seek to have the money used wisely.

      Make this Amendment XXVIII.

      •  Re (4+ / 0-)
        Escalate the rate to 2% for wealth above $1-billion. Inflict annually.

        This is sharia at its best. The Muslim requirement for charity with family donation proportioned to wealth.

        Proponents of this plan should definitely try to sell it to Congress by calling it "sharia".

        (-5.50,-6.67): Left Libertarian
        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

        by Sparhawk on Sun Oct 21, 2012 at 09:24:24 AM PDT

        [ Parent ]

      •  bont - a direct federal wealth tax would (1+ / 0-)
        Recommended by:
        bontemps2012

        not be constitutional. The estate tax is the best we have to tax wealth. There is a longer explanation by coffeetalk in this thread.

        "let's talk about that"

        by VClib on Sun Oct 21, 2012 at 10:49:06 PM PDT

        [ Parent ]

        •  "Make this Amendment XXVIII." (0+ / 0-)

          D'oh!

          •  bontemps - that's what it would take (2+ / 0-)
            Recommended by:
            nextstep, bontemps2012

            but I see no chance that a Constitutional Amendment authorizing a wealth tax could obtain a super majority in both the House and Senate in the foreseeable future for two reasons. First, the data from countries, primarily in Europe, who have implemented a wealth tax is mixed. Some subsequently dropped it because it led to capital flight, lower GDP growth and lower overall tax revenues. In addition, I think the experience with the 16th Amendment authorizing the income tax will make this a non-starter for all the Republicans and some of the Dems. The 16th Amendment was passed based on the idea that it would be a very small tax on only the very highest earners.

            "let's talk about that"

            by VClib on Mon Oct 22, 2012 at 09:26:18 AM PDT

            [ Parent ]

            •  This XXVIIIth would be passed based (0+ / 0-)

              on the idea that it would be a very small tax on only the very highest earners.

              Same difference. XVI took more than a weekend, too.

              •  bontemps - but the history of the 16th Amendment (0+ / 0-)

                Where the income tax went from being a low single digit tax on the highest of earners to, at one time a nearly universal tax with a top marginal rate of more than 90% will give legislators pause.

                "let's talk about that"

                by VClib on Tue Oct 23, 2012 at 08:57:16 AM PDT

                [ Parent ]

  •  Class warfare is a great theme. (17+ / 0-)

    Do Democrats have the courage to pursue it?

    The real warfare is against the middle class, not the wealthy.

    LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

    by dinotrac on Sun Oct 21, 2012 at 08:00:46 AM PDT

    •  How about this... (7+ / 0-)

      Are average middle-class Americans better off now than we were 40 years ago?

      Four years is not enough time to really tell.

      "The right to be heard does not automatically include the right to be taken seriously." -- Hubert H. Humphrey

      by Candide08 on Sun Oct 21, 2012 at 08:05:04 AM PDT

      [ Parent ]

    •  geez how about the warfare against the (8+ / 0-)

      lower class.  The most insidious trick played upon the middle class is to separate it from the poverty class.  Yet that is exactly where the middle class will end up if romney wins.

      "The real wealth of a nation consists of the contributions of its people and nature." -- Rianne Eisler

      by noofsh on Sun Oct 21, 2012 at 08:50:20 AM PDT

      [ Parent ]

      •  Working class. Most of the middle class IS... (6+ / 0-)

        ...working class, though many in it disdain the label.

        Don't tell me what you believe, show me what you do and I will tell you what you believe.

        by Meteor Blades on Sun Oct 21, 2012 at 09:14:44 AM PDT

        [ Parent ]

        •  In an argument (2+ / 0-)
          Recommended by:
          ozsea1, dinotrac

          during a Democratic precinct caucus in Dallas some years ago a neighbor asked "What is working class anyway?" and my son, much more eloquent than I, answered "If someone else signs your paycheck, no matter how big it is, you're a worker." In order for a modern industrial state to function economically, we have to set it up so that the average high school graduate can get a job within spitting distance of the median wage.

          "If I pay a man enough money to buy my car, he'll buy my car." Henry Ford

          by johnmorris on Sun Oct 21, 2012 at 09:28:09 AM PDT

          [ Parent ]

          •  But that just turns it into a worthless tautology (1+ / 0-)
            Recommended by:
            RandomNonviolence

            A VP of Citibank "has his/her paycheck signed by someone else". What else do they have in common with the janitor that sweeps the floors? Nothing, right?

            I mean, in a hospital, you can't possibly say that the interests of highly trained and specialized doctors are the same interests as those of the janitorial staff. But both have their paycheck signed by someone else.

            (-5.50,-6.67): Left Libertarian
            Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

            by Sparhawk on Sun Oct 21, 2012 at 09:55:47 AM PDT

            [ Parent ]

            •  Actually, you can (2+ / 0-)
              Recommended by:
              SoCalJayhawk, dinotrac

              say that about the Doctor. For the 40 years of liberal governance from 1933 to 1973 Drs prospered but didn't get fabulously rich. That started happening when they were allowed to decouple from the working class. Ditto bank VP's. My mom was one. She didn't make as much as my dad did driving a truck. When that was the case, banks could have no branches outside of their home state, some had even more restrictions. City Bank of New York, for instance had a charter that only allowed it to do banking in the 5 boroughs. That was true into the 70's. That was the predecessor to Citi.

              "If I pay a man enough money to buy my car, he'll buy my car." Henry Ford

              by johnmorris on Sun Oct 21, 2012 at 01:35:31 PM PDT

              [ Parent ]

              •  johnm - branch level commercial bankers (0+ / 0-)

                still make middle class salaries. Most people working in a branch, even at the branch manager level, earn less than six figures. It is the people in investment banking and trading that make seven figures.

                "let's talk about that"

                by VClib on Sun Oct 21, 2012 at 10:53:18 PM PDT

                [ Parent ]

        •  Yes sir...indeed. (0+ / 0-)

          The old definitions need updating to reflect modern reality.

          If you work for a wage and you are not a member of management, odds are you should properly be called working class.

          I wonder what the practical difference is between a wage-slave computer programmer using his hands in a cubicle all day and a mechanic diagnosing and repairing today's highly computerized engines, or a an HVAC guy with today's highly computerized heating and cooling systems.

          LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

          by dinotrac on Sun Oct 21, 2012 at 03:19:08 PM PDT

          [ Parent ]

      •  Except that any warfare against the lowest (0+ / 0-)

        rungs is an insidious second-order kind of thing.

        We see videos of a woman with her Obamaphone, or know somebody that gets all of their medical expenses covered with Medicaid while we can't afford health insurance.

        If somebody in middle-middle class or so looks into many programs -- including some programs designed to help people save their homes from foreclosure -- they will often find that they earn a little too much money to qualify.

        The lower income folks get benefits, the not-so-low folks get pissed off.

        Kinda diabolical.

        LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

        by dinotrac on Sun Oct 21, 2012 at 03:24:21 PM PDT

        [ Parent ]

  •  This reminds me of a quote (18+ / 0-)

    From The Man Who Was Thursday:

    "The poor have sometimes objected to being governed badly; the rich have always objected to being governed at all."

    Do Pavlov's dogs chase Schroedinger's cat?

    by corwin on Sun Oct 21, 2012 at 08:00:54 AM PDT

    •  or (3+ / 0-)
      Recommended by:
      ozsea1, Laconic Lib, Eric Nelson

      the poor are more to be trusted than the rich, for the poor seek merely to not be oppressed, while the rich seek to oppress.

      It's been a hundred years, isn't it time we stopped blaming Captain Smith for sinking the Titanic?

      by happymisanthropy on Sun Oct 21, 2012 at 09:18:02 AM PDT

      [ Parent ]

    •  I don't think the poor (0+ / 0-)

      any claim to righteousness simply due to their economic status or their perpetual social position of doormat. They have an undeniable claim to being victimized although that is not necessarily the cause of their plight. The simple fact is that economic status does not infer anything about one's value as a human being or their benefit, or cost, to society. I think this principal is one that underlies American democracy: every citizen is valuable and has a right and obligation to contribute what they can to our great experiment in self rule. Our founders fought a nasty revolution to win the right to determine our destiny from an empire whose heart and soul was the iron fist of wealth and privilege perpetuated through heredity.

      This is upside down in today's America. Many if not most would say your value is directly proportional to your bank account. Power certainly is. The idea is being turned to reality through a tax system that promotes the hereditary transfer of wealth and power. The Romneys and Paris Hilton's of the country like it this way and a huge number of Amercans, rich and poor, have come to accept this is how it should be. This is un-American in my view.

      The poor are thought to be so largely due to their own character flaws. It is surely their fault. They drag the rest of us down. Besides they are an easy target or excuse for yor own situation if you happen to be just a step ahead of being poor yourself. So whatever they have to say should naturally be ignored. Why should any hardworking person listen to the whining of people who want to take from their betters to improve their self inflicted troubles?

      That's some fucked up shit. Yet our right wing friends want to divorce themselves from any responsibility for improving life for everyone by making life better for themselves. More projection, that.

      One of my favorite quotes:

      “The cry of the poor is is not always just, but if you don't listen to it, you will never know what justice is.”

      ― Unknown, recalled by Howard Zinn, A People's History of the United States: 1492 to Present
      tags: justice

      This country was built by the poor and dispossessed. The rich took the credit and the wealth, they think its theirs, and they don't want to give any of it back. It's time we help them change their greedy attitude.

      Time makes more converts than reason. Thomas Paine, Common Sense

      by VTCC73 on Sun Oct 21, 2012 at 12:51:28 PM PDT

      [ Parent ]

  •  class jihad and the 1% are the mullahs /nt (6+ / 0-)

    yksitoista ulotteinen presidentin shakki. / tappaa kaikki natsit "Nous sommes un groupuscule" (-9.50; -7.03) 政治委员, 政委‽ Warning - some snark above ‽

    by annieli on Sun Oct 21, 2012 at 08:04:50 AM PDT

  •  Why are Todays Democrats Afraid of FDR? (12+ / 0-)

    It's nice to see FDR quoted here.  My question is why don't the Democrats ever do so?  They treat FDR and his proven effective liberal  policies and philosphy like some sort of embarrassments.  Sure they support Social Security, but they refuse to make the case that FDR does in your quotation of him for rational, fair and  effective tax policies.

    The Republicans can't say enough about that rotten S.O.B. Reagan and the Democrats refuse to say anything about the greatest president since Lincoln.  That is why they are, incredibly, in a neck and neck race with a GOP peddling it's proven policy failures.

  •  I favor a severely progressive tax approach. (10+ / 0-)

    Return to taxing the high end at 90% or more.

    "But won't that discourage people from doing anything?"

    No, it'll only discourage those whose only motivation is money.  I want a society that gives the greedy no real reason to get out of bed in the morning.  The world will be a better place.  

  •  Switzerland has a wealth tax-- (4+ / 0-)

    and it's a "tax haven"--the rate varies by canton.
    Indiana had one, too, when I lived there. I don't know about now; it was, as I recall, 0.25% of all financial wealth, each year.

    Lots of countries have a wealth tax.
    We might need a constitutional amendment to get one here.

    "There is just one way to save yourself, and that's to get together and work and fight for everybody." ---Woody Guthrie (quoted by Jim Hightower in The Progressive Populist April 1, 2012, p3)

    by CitizenJoe on Sun Oct 21, 2012 at 08:19:48 AM PDT

    •  ...most of which have gone very badly. (3+ / 0-)
      Recommended by:
      Sparhawk, johnny wurster, VClib

      Switzerland can get away with it in part because they're a banking haven (i.e. you're paying to stash your illicit gains) and in part because it's actually set by the local cantons (frequently at very low rates) and only on property in Switzerland.

      It's been a disaster in France, which traded some $125 billion in capital flight for only $20 billion in taxes.  France's current wealth tax also exempts broad categories of assets.

      Basically, all a wealth tax does is guarantee people move their money out of your country.  Property taxes work much better because they can't do exactly that.

  •  Everyone wants something for nothing (8+ / 0-)

    It has not gone unnoticed that those most hawkish about the deficit insist that we can get rid of it by cutting taxes. I'm a high school drop out and I can plainly see that the "math" of that plan is impossible.

    My comment to most people who like the idea of closing "loopholes" has been, "Okay. You wanna pay the same taxes that I do?"

    I do not get to file jointly. I have no dependents. I don't own a home, so the mortgage deduction means nothing to me. I cannot itemize anything.

    The largest tax refund I've received from the federal government was a little over $200. I usually end up owing the state. On good years I break even between what I get back from federal and what I owe state. Other years I've owed more to the state than what I get back from federal, and while all you folks with kids and houses and spouses are out spending your tax credits, I'm writing a check.

    That's what having no loopholes means.

    P.S. I am not a crackpot.

    by BoiseBlue on Sun Oct 21, 2012 at 08:20:50 AM PDT

  •  I'm one of those Liberals (8+ / 0-)

    who would not support an Annual Wealth Tax for a number of reasons - elderly and disabled people being part of my concern.

    But Thank You for shining light on the dirty little secret that makes so complaints about taxing the income of the 1% completely disingenuous.

    The Estate Tax needs to be reinstated.

    I'm also disturbed about Romney's (offhand?) comment in the last debate about making Cap Gains & Interest tax free up to $200,000.  Grammatically, he seemed to imply that this provision was for people whose total income is $200K or less, but that is indeed Sketchy.  The way our tax system is structured, I am quite suspicious that he meant the first 200K of Cap Gains / Interest income.  This essentially means a person sitting on $5M of cash churning out 4% average earnings (a number used by some foundations as a planning average) could pay virtually no tax on newly earned income for life.  It's the ultimate "Job Creation" scam -- buying and selling stocks & bonds, sitting on cash that earns interest:  these are hardly ways Jobs are created.

    •  200,000 income limit (3+ / 0-)

      OK, Google is suggesting to me that Romney did indeed mean the cut to apply only to those with 200K of income or less.

      Even if you believe that would be how it is applied by a Republican majority (and I have my doubts).  The two key points remain:

      It would be easy to sit on quite a few millions of wealth and find a way to reap $200K (no more, no less) of new income annually - tax free.

      Playing the stock market does not create jobs.  (But near term rising stock prices do great things for CEO bonuses).

      This is also a hell of a pander to Florida.  Damn it.  Never mind the impact, there are promises of candy and unicorns today!

  •  a bit off topic (4+ / 0-)

    How the Right Has Turned Everything Into a Culture War -- And Why That's Terrible for Our Democracy

    http://www.alternet.org/...

  •  Bring on the Zombie Apocalypse! (1+ / 0-)
    Recommended by:
    divineorder

    And let them feast on the 1%. Because the rest of us actually work for a living and know how to use a Chainsaw!

    "I think it's the duty of the comedian to find out where the line is drawn and cross it deliberately." -- George Carlin, Satirical Comic,(1937-2008)

    by Wynter on Sun Oct 21, 2012 at 08:23:17 AM PDT

  •  Inherited wealth is unAmerican; so are wild perks (4+ / 0-)

    Assuming the American way is to be self-made, why would one want to rely on family wealth? It seems to me that inherited wealth should be a source of embarrassment for a true American.

    Which brings me to foundations. These institutions allow certain individuals and companies to avoid taxes by setting up their own system in which they personally decide where the dollars that should be paid in taxes should go. CHARITY DOLLARS ARE TAX DOLLARS! I am strongly supportive of a cap on huge charitable contributions to foundations. Here in Los Angeles, several of these wealthy institutions have set themselves up as quasi-governments, establishing "strategies" and "priorities" that should be set by government. The worst among them has taken the dollars paid by people for health insurance and now insists that their mission is to 'effect systemic change' through social initiatives based on priorities set by people who are not elected. They are proudly spending $1 billion on "building healthy communities" while uninsured people in Los Angeles cannot get routine care, and community clinics are in financial straits.

    I also want to comment on the excessive perks granted by high-tech companies and now universities, as described in yesterday's New York Times, and this seems like an okay place to do that. At a time when workers have to purchase and clean their own uniforms, why should the rich get free dry cleaning and housekeeping from their employers? These seem like benefits that should be taxed. I wish the coal companies would pay for the miners' clothes to be cleaned, and perhaps a massage and a free lunch for them!

    "When you give back all your ill-gotten gains, you're a reformed crook. When you keep most of the loot and only give back a small part of it, you're a philanthropist." - Alfred E. Newman

    by Abstract668 on Sun Oct 21, 2012 at 08:29:23 AM PDT

    •  Did you read the article? (1+ / 0-)
      Recommended by:
      VClib

      Every single employee, from receptionist to the CEO, gets those perks, not the "rich".

      •  "everybody" gets those benefits (3+ / 0-)
        Recommended by:
        ozsea1, Egalitare, Laconic Lib

        The article emphasized Silicon Valley. The typical company there contracts out its low-wage workers (e.g., janitors), often to cheap Mexican labor who appear at night and disappear miles away during the day since they aren't paid anywhere near enough to live close to work. Those are the people who probably need the perks the most, and are getting the least.

  •  Despite ubiquitous claims to the contrary, the Uni (5+ / 0-)

    Despite ubiquitous claims to the contrary, the United States does not have a “deficit problem

    Why the Deficit Is Simply Not an Economic Problem Now, or in Future Decades

    http://www.alternet.org/...

  •  Has anyone in Congress EVER tried a wealth tax? (2+ / 0-)
    Recommended by:
    Meteor Blades, Laconic Lib

    I mean, at any time in the past couple or three decades? If not, somebody should put it out there. I know it wouldn't pass in the first year or the first decade it was out there, probably wouldn't make it to the floor. But if a group of progressive Democrats in Congress -- probably those with very safe seats -- co-sponsored a bill to create a wealth tax, and regularly offered up the wealth tax as an amendment to revenue or spending bills, they could eventually get it scored by the CBO.

    Do this long enough, "wealth tax" could become part of the national discussion. "Balance the budget" calculators would start to include stuff like "2% wealth tax generating $457 billion over the next decade" as an option. Also, it would be useful to demonstrate that (in the House, at least), voting for a wealth tax wouldn't get you kicked out of office. Once the idea can routinely attract a hundred or so Democratic votes in the House as a budget amendment, it'll be a mainstream policy option.

    •  It's unconstitutional (4+ / 0-)

      A state might try it (and have people fleeing that state en masse), but the federal government is constitutionally not empowered to enact a wealth tax.

      (-5.50,-6.67): Left Libertarian
      Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

      by Sparhawk on Sun Oct 21, 2012 at 09:19:10 AM PDT

      [ Parent ]

      •   That's not true (0+ / 0-)

        Article I, section 8:

        1:  The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

        Section 9:

        4:  No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.7

        Was amended to allow such taxes:

        Article XVI

        The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.   ratified #16    affects 2
        [Article XVII]

        "If I pay a man enough money to buy my car, he'll buy my car." Henry Ford

        by johnmorris on Sun Oct 21, 2012 at 11:38:13 AM PDT

        [ Parent ]

        •  "Tax on incomes" does not authorize (4+ / 0-)
          Recommended by:
          Sparhawk, JLan, johnny wurster, VClib

          a wealth tax.  An income tax is transactional -- it is triggered by a transaction of "income" being transferred from one party to another.  

          A wealth tax is not transactional -- It is a tax on assets that are simply sitting there, not moving.   A property tax, for example, is a type of wealth tax.  The property does not have to move from one party to another -- i.e., there does not need to be a transaction -- for the tax to be triggered.  However, states (which have plenary power, not the enumerated powers the federal government has) impose property taxes, not the federal government.  

          Just as the 16th Amendment was required to impose a "tax on incomes" without having it apportioned among the states, it is likely that another constitutional amendment would be required for a tax on wealth (a direct tax under the Constitution) without apportioning it among the states.  

          •  IANAL (0+ / 0-)

            that said, the 14th amendment brought the States into the coverage of the Constitution. That's why the voting rights act can limit their autonomy in elections. So if property taxes are constitutional, wealth taxes are. Case law?

            "If I pay a man enough money to buy my car, he'll buy my car." Henry Ford

            by johnmorris on Sun Oct 21, 2012 at 01:30:27 PM PDT

            [ Parent ]

            •  No. The 14th Amendment only (3+ / 0-)
              Recommended by:
              johnny wurster, VClib, nextstep

              incorporated some of the Bill of Rights into the States.  

              The States have plenary power -- they can do anything not prohibited by their state constitutions.  That's why, for example, a state does not need constitutional justification to require drives to buy auto insurance.  If the state constitution does not specifically prohibit the state government from doing something, the state legislature can do it.  If the state government wanted to impose a mandate to buy health insurance, you wouldn't have to find authorization in the  state constitution for them to do that.  You'd only look at the state constitution to see if the state constitution prohibited it.

              The federal government does not have plenary power.  Instead, it is a government of ENUMERATED powers (you can Google that term).  That means that it can only do what the Constitution authorizes it to do.  That's why in the case of the mandate in the ACA, you had to find a specific provision in the Constitution-- Article I, Section 8 -- that authorized it (rather than just looking to see if the constitution prohibited it, as you would do for a state legislature).  

              The U.S. Constitution gives Congress the power to tax, but specifically says that a Direct Tax must be apportioned among the states.  So, the 16th Amendment had to be passed to say that the Congress could tax incomes without apportioning it among the states.  Arguably, you'd have to do the same for a wealth tax.  

              I am a lawyer, by the way.

              •  I stand (0+ / 0-)

                corrected. We still, however, need to find some way to decrease wealth disparity or give up on a Democratic Republic. Suggestions?

                "If I pay a man enough money to buy my car, he'll buy my car." Henry Ford

                by johnmorris on Sun Oct 21, 2012 at 05:08:51 PM PDT

                [ Parent ]

                •  Taxes on transactions are constitutional (0+ / 0-)

                  I looked it up after raising the question, and I agree with Sparhawk and coffeetalk. The federal government is constitutionally barred from imposing taxes on real and personal property based simply on ownership of the property, and a "wealth tax" is a property tax.

                  In terms of decreasing wealth disparity, Meteor Blades is right -- an inheritance tax is the closest thing we have to a wealth tax. It can be structured to achieve the same purpose as a wealth tax -- instead of taxing the wealth of the super-rich every year, simply tax their entire estate at a high rate on their deaths, limiting the amount of the unearned windfall that reaches their heirs. Exempt the first million dollars from taxation, and tax the rest at a graduated rate, topping off at 95% (or more) for estates in excess of $1 billion.

                  It's a simple principle, and a fair one: whatever you earn in the course of your life, you may enjoy until you die. And you can leave enough behind for your heirs to live in reasonable comfort. But if your kids or grandkids want to get as preposterously wealthy as you were, they'll need to earn it themselves instead of sponging off your achievements.

            •  a federal property tax would be (1+ / 0-)
              Recommended by:
              VClib

              unconstitutional.  states can levy them, feds can't.  some scholars believe that it would be unconstitutional, others believe a wealth tax could be structured so that its a constitutional income tax, but they're wrong.

  •  I just don't see how "Tax The Rich" (3+ / 0-)
    Recommended by:
    smiley7, mightymouse, Laconic Lib

    could possibly be a losing strategy.

    Still enjoying my stimulus package.

    by Kevvboy on Sun Oct 21, 2012 at 08:43:48 AM PDT

  •  republicans are determined to destroy USA (5+ / 0-)

    At least effectively.  What sort of country is it that only benefits 1% of it's people?

    "The real wealth of a nation consists of the contributions of its people and nature." -- Rianne Eisler

    by noofsh on Sun Oct 21, 2012 at 08:44:44 AM PDT

  •  Excellent diary (6+ / 0-)

    Doing away with estate tax has a strong lobby sitting at the Bowles-Simpson table, btw.

    I'm for a Wall Street transaction tax, too.

    Logically, we should be able to sell this, we bailed Wall Street and investment bankers out, it's only right and just that they pay us back.
    It works and can contribute over a trillion dollars in ten years, according to Bloomberg.

    "Lets show the rascals what Citizens United really means."

    by smiley7 on Sun Oct 21, 2012 at 08:47:26 AM PDT

    •  and excellent comment. Suppt H.R. 6411, the Robin (3+ / 0-)
      Recommended by:
      ozsea1, Eric Nelson, smiley7

      Hood tax!!!!!

       

      A small tax on Wall Street that could transform Main Street, and more.

      This tax on the financial sector has the power to raise hundreds of billions every year to provide funding for jobs to kickstart the economy and get America back on its feet. It could help save the social safety net in the US and around the world.

      Not complicated. Just brilliant.

      The Robin Hood Campaign – A Movement, and Now Legislation Too

      For many months, nurses, healthcare, environmental, labor, consumer, faith-based and other community activists have rallied on Wall Street, at banks and legislative offices, and outside the White House and Treasury Department, saying it is time to tax Wall Street to help revive our economy and nation.

      Now it’s no longer just a movement. It’s also legislation, H.R. 6411, the Robin Hood tax, introduced in Congress by Rep. Keith Ellison, one of the most progressive voices in Washington.

      Read More.

      Act now
      Document
      Tell Your Congress member To Co-Sponsor HR 6411
      HR 6411, the Robin Hood Tax, could raise hundreds of billions to help in America, and across the world.
      Send a Letter Now

      Move Single Payer Forward? Join 18,000 Doctors of PNHP and 185,000 member National Nurses United

      by divineorder on Sun Oct 21, 2012 at 09:50:41 AM PDT

      [ Parent ]

  •  Thank you for this (0+ / 0-)

    really well presented and so, so true.  Hope everyone takes the time to read this.

    dress for dinner and be discreet.

    by moodyinsavannah on Sun Oct 21, 2012 at 08:49:01 AM PDT

  •  From the link: (3+ / 0-)
    Recommended by:
    powderblue, divineorder, ozsea1
    With the enactment of the Income Tax Law of 1913, the Federal Government began to apply effectively the widely accepted principle that taxes should be levied in proportion to ability to pay and in proportion to the benefits received.
    ^^[That] used to be "widely accepted" and understood.  Today, not so much.

    Excellent cite, MB.  Thank you.

    "The most potent weapon in the hands of the oppressor is the mind of the oppressed." ~ Steven Biko

    by Marjmar on Sun Oct 21, 2012 at 08:51:52 AM PDT

  •  Inherited Power (0+ / 0-)

    Hmmm.  Sounds like an excellent idea for a fourth branch of government.  Let's call it the American House of Lords!

  •  Clear Cut Case Of The Non-Wealthy Voting Against (0+ / 0-)

    their interest. Partially because of Lunz calling it a "death" tax, you don't have the support of the non-wealthy in maintaining the estate tax as much as you should. Probelm of course is when that revenue is lost it has to come from somewhere else.

  •  I would oppose a general wealth tax. (4+ / 0-)
    Recommended by:
    Sparhawk, jkay, Simplify, johnny wurster

    It's not good policy.  For one thing, a wealth tax would be a nightmare to effectively enforce, and enfocement would require an intrusion into people's lives that I am not comfortable with.  An audit of your income involves the government reviewing your paperwork, because income can usually be evidenced through documents.  Most IRS audits are desk audits-- an IRS agent doesn't even visit your premises (yet some people still consider this level of enforcement to be oppressive.)  An audit for the purposes of the wealth tax, to have any effectiveness, would require a search of your property.  

    The estate tax is the proper way to tax wealth, taxlng wealth when it is already being conveyed, rather than placing a new accounting burden on people by forcing them to tally up the value of their assets, presumably on an annual basis.

    Also, we already have another wealth tax: real property taxes.  The reason we can tax property without an oppressive enforcement mechanism is because ownership of real property is a matter of public record.  Plus, real property cannot be moved overseas.  All other kinds of assets can and would be moved overseas under a wealth tax.

    •  This is the most.... (0+ / 0-)

      .....ridiculous idea I've read on DKos this year that's been presented in a non ironic fashion.

      I think the same "hysteria" virus that's recently permeated the rec list has now infected the front pagers.

      Make no mistake, this is a radical idea and would never see the light of day in the congress or the senate.

      Even bringing up this idea in public would probably be a career killer for any elected representative.

      There are plenty of other remedies without even going "there". Just raise the tax rates.

      As we've seen, we can't even get that done.

      An idea like this is dangerous, and it serves nobody.

      They call us communists now, just imagine what happens after the first person suggests this little grenade, we'll become the Bolsheviks.

      "Pay no attention to that man behind the curtain!"

      by jkay on Sun Oct 21, 2012 at 09:40:03 AM PDT

      [ Parent ]

      •  It wouldn't be the first time I've been... (0+ / 0-)

        ...called a communist. That started happening when Cold War liberals called me (and others like me) commies for opposing the war in Vietnam. And, of course, many of our economic ideas were attacked with the same name-calling fervor, quite often by progressives. But let's just call my proposal a little something so that progressives can tell the Republicans they should accept a higher income tax as a compromise because radicals would go a lot farther given the chance.

        Don't tell me what you believe, show me what you do and I will tell you what you believe.

        by Meteor Blades on Mon Oct 22, 2012 at 01:13:40 AM PDT

        [ Parent ]

        •  It's not a serious proposal.... (0+ / 0-)

          ....even as a bargaining chip, so it is of no use.

          It turns us into a laughing stock and just pisses people off, most democrats included.

          It's confiscatory and impossible to implement from a purely mechanical standpoint, aside from the fact that ideologically it has fissures the size of the Grand Canyon.

          As far as you being called a communist in the past, with ideas like this I can understand why.

          There is a fine line between "taxing" and just flat out "taking", and a proposal like this crosses that line objectively and just as importantly symbolically.

          It's a horrible idea.

          "Pay no attention to that man behind the curtain!"

          by jkay on Mon Oct 22, 2012 at 05:35:12 AM PDT

          [ Parent ]

          •  "As far as you being called a communist... (0+ / 0-)

            ... in the past, with ideas like this I can understand why."

            Yep. As I figured, it's not that you fear the consequences of the "optics," it's that you personally object. It is no more confiscatory than other taxes unless you're of the view of those who view all taxation as theft.

            As for the notion that the people who have proposed wealth taxes are commies, they include a number of economists, such as Edward Wolff, constitutional scholar-lawyers like Leon Friedman and Bruce Ackerman, tax professor Anne
             Alstott and co-founder of the Economic Policy Institute and The American Prospect Robert Kuttner.  

            Don't tell me what you believe, show me what you do and I will tell you what you believe.

            by Meteor Blades on Mon Oct 22, 2012 at 08:04:02 AM PDT

            [ Parent ]

            •  I don't like.... (0+ / 0-)

              ...the optics or the ideology.

              It's a lose/lose.

              Yes, I do personally object, I thought I made that clear.

              I was not trying to imply otherwise.

              I should not have to explain to you, and I know I don't, that optics are important.

              If Paul Krugman and Joe Stieglitz were to make a reasoned argument for it, I would listen.

              I have not seen them touch this subject with a ten foot pole.

              These proposals that you mention must have been put out in some obscure think tank journals, because I've never heard these things discussed openly by the MSM or any nationally elected office holder.

              I have no doubt that a fairly convincing theoretical case could be made for them.

              But as I stated before, it's a place we don't need to go near to accomplish what we need to do.

              It is an inflammatory idea, and again mechanically it is just not possible.

              Forcing everybody to come up with what would essentially be a "personal balance sheet" every year, then submitting that to the IRS and requiring the gov't to staff up to review those things is just not plausible.

              "Pay no attention to that man behind the curtain!"

              by jkay on Mon Oct 22, 2012 at 08:34:53 AM PDT

              [ Parent ]

            •  The only thing I could find.... (0+ / 0-)

              http://prospect.org/...

              ....regarding a "wealth tax" is in the following link.

              It's not exactly a "magnum opus".

              This is not exactly a "google search friendly" topic, which shows how off the beaten track this idea is.

              There are six main points of the article, and I made 1/2 those points myself in this thread.

              They also mention a financial transaction tax, which I have no problem with.

              If you are going to propose "something new under the sun" in regard to taxes, at this stage of the game it's probably rotten and has a good reason for not having been seriously considered before.

              The way this guy couched it, it sounds to me like he didn't even believe it would be taken seriously.

              And I don't.

              I am surprised that it came from the "Congressional
              Progressive Caucus".  Surprising how I haven't heard this wonderful idea being touted in any of their current congressional races.

              Obviously, many of those members are the "communists" Allan West must be referring to!

              "Pay no attention to that man behind the curtain!"

              by jkay on Mon Oct 22, 2012 at 09:30:19 AM PDT

              [ Parent ]

    •  Juat a comment on this: (0+ / 0-)
      An audit for the purposes of the wealth tax, to have any effectiveness, would require a search of your property.  
      I owed the IRS $40,000. The door bell rang and an IRS agent, with a badge and a gun handed me a search warrant. He said he had come to inventory my personal property for seizure and sale. When I said "George didn't say anything about this." he asked who George was. I told him he was my tax attorney and he said, "Oh, if you're represented, have him call me." and he handed me a business card.

      When I first started my little Engineering office my best friend offered to do my corporate papers. He told me to hire a tax attorney and I didn't think I was going to make enough money for that. Jim said you get the attorney to do your taxes because you never want to have to talk to the IRS. So I took his advice and it worked. But don't for a moment think that an IRS audit isn't going to include a search warrant looking to sell grandma's china for the tax bill. It will.

      "If I pay a man enough money to buy my car, he'll buy my car." Henry Ford

      by johnmorris on Sun Oct 21, 2012 at 11:47:44 AM PDT

      [ Parent ]

  •  We need to work on optics and framing (1+ / 0-)
    Recommended by:
    Meteor Blades

    A substantial tax on huge inheritances is good, just, and necessary for a healthy egalatarian minded democracy.

    The problem is when you you propose extending or strengthening it  . . .
    DEATH TAX!!!
    But, it only affects the extremely wealthy . . .
    SMALL BUSINESSES!!! FAMILY FARMS!!!
    Do you want to live in a country ruled by an untitled hereditary aristocracy?
    PEOPLE SHOULD BE ABLE TO KEEP THEIR MONEY!!!  THEY SHOULD BE ABLE TO LEAVE EVERY PENNY TO THEIR CHILDREN!!!
    But this doesn't even affect you, in fact it will increase equality of opportunity for your children and almost all other children. . .
    CLASS WARFARE!!!  REDISTRIBUTION!!!

    We need better framing than "estate tax"... how 'bout "opportunity tax" or "anti-aristocracy tax."  Lame, I know.  But we need something a little better and we need the courage of conviction to push it.

    "I shall never surrender or retreat." --Lieutenant Colonel William Barret Travis

    by badger1968 on Sun Oct 21, 2012 at 09:11:04 AM PDT

    •  When it all came into focus for me (0+ / 0-)

      Years ago, the Democrats on the relevant committee proposed a complete exemption from estate tax for all estates under $100 million.

      That would exempt the farmer, the car dealer, the specialty manufacturer, and all the millionaires next door.

      The Republicans, of course, shot it down.

      The Republicans are there to serve only the centimillionaires and above.

  •  I am not against... (4+ / 0-)

    ....beefing up the estate tax, but a "wealth tax" in addition to an income tax is just an absolute shit idea.

    You want to take the caps off social security, increase the top marginal rate and capital gain rates, I'm all for that.

    But a "current" wealth tax is a non starter.

    So you're going to tax all income, tax the residual "wealth", then tax it again when it passes to heirs (estate).

    Come on, give me a break.

    Florida used to have a "net worth" tax, but at that time they did not have an income tax. Having a "wealth" tax and an income tax concurrently is a disaster from an implementation and a policy standpoint.

    I cannot disagree more strongly.

    When you start spitballing something like that, you better have a better argument than that we are "innovative".

    It's in a league with Romney's "five point plan".

    "Pay no attention to that man behind the curtain!"

    by jkay on Sun Oct 21, 2012 at 09:13:45 AM PDT

    •  I agree with you (0+ / 0-)

      but only because a wealth tax presents insoluble enforcement problems.

      Job creators?? Imagine what George Carlin would do with that. -7.25 -6.21

      by Tim DeLaney on Sun Oct 21, 2012 at 09:36:20 AM PDT

      [ Parent ]

      •  It's impossible to convey... (3+ / 0-)
        Recommended by:
        Tim DeLaney, johnny wurster, VClib

        ....to the readers here how impossible it really would be.

        It would be very impossible.

        I'm a CPA. I do this stuff for a living.

        It can't be done succesfully. We can barely do what we do now.

        But even beyond that, I just don't think it's fair to tax income twice like that. That's swinging the pendulum to far to the other side.

        "Pay no attention to that man behind the curtain!"

        by jkay on Sun Oct 21, 2012 at 09:48:26 AM PDT

        [ Parent ]

        •  I'll ignore the "spitballing" comments and... (0+ / 0-)

          ...just point out what I am sure, your being a CPA, you already know: the way the tax system is structured now, massive amounts of money is transferred intergenerationally that has NEVER been taxed—capital gains accumulated and passed on to heirs. A wealth tax nicks a small portion of that untaxed money.

          Don't tell me what you believe, show me what you do and I will tell you what you believe.

          by Meteor Blades on Mon Oct 22, 2012 at 01:17:43 AM PDT

          [ Parent ]

  •  The reason people who accumulate money (7+ / 0-)

    have to be taxed is because, although money is worthless, it needs to be spent. When individuals or governments withdraw currency from circulation, it acts like a drag.  The Treasury could replace the dollars and, to a certain extent, that's what pension payments do.  However, if the rules aren't changed, the accumulators will just keep on accumulating more, because, like squirrels, that's what accumulators do.
    Stashing cash in savings accounts or hedge funds needs to be discouraged.
    If you want to see evidence of sluggish money, see this graph

    http://research.stlouisfed.org/...

    We organize governments to provide benefits and prevent abuse.

    by hannah on Sun Oct 21, 2012 at 09:15:49 AM PDT

  •  INHERITANCE tax (4+ / 0-)

    not "Estate" Tax, ... or "Inherited Wealth" Tax, even better, emphasis on the Wealth.

    Otherwise Frank Luntz will just fire back with "Death Tax", and moron America will fall for it.

  •  Frank Rich with some depressing reality (1+ / 0-)
    Recommended by:
    squarewheel

    Frank Rich, NYMag on why the tea party isn't going away.

    That this election is close (tied?) at this point should be a wake up call to anyone left of cloud coo coo right. Romney's the worst candidate evah and hasn't lost a point of the far right base. I've thought "Obama's black" but I may be deluding myself. There are a lot of psychos out there in the intellectual govmint hatin backwoods. A lot. Millions.

    Someone, optimumly Obama in a second term but it's not really him, has to start making a coherent argument for the New Deal that isn't nostalgia.

    If you didn't like the news today, go out and make some of your own.

    by jgnyc on Sun Oct 21, 2012 at 09:18:48 AM PDT

  •  Started phone calls today in PA (2+ / 0-)
    Recommended by:
    Shippo1776, Eric Nelson

    I took other people's advice and stopped wasting time online in favor of making phone calls for Obama to registered voters in Pennsylvania.  I was very nervous!  I had the script in front of me and practiced it first.  

    Happily, it is going great.  I have only made 11 calls so far but I am encountering a lot of Obama supporters who appreciated the reminder to vote and also felt very good about hearing from "the campaign".  Funny...imagine little old me as "the campaign".

    Please consider going to the Obama web site and calling some voters.  I can't believe how easy it gets after a few calls.  I am going back now to make more calls!

  •  After the last few decades (2+ / 0-)
    Recommended by:
    divineorder, Laconic Lib

    when the poor and middle classes have been so effectively looted by the rich, it is time for affirmative action.

    Call it class warfare if you want. It feels like the plaint of an older brother when he is caught bullying younger brother: "But, Mom, he hit me back!"

    Sound tax policy would consist of preventing the rich from becoming richer unless they contribute. This implies a very high estate tax, and very high marginal rates on income--income of every kind. I would set both above 80%.

    Class warfare be damned. Instead of clever but useless sound bites, let's do what is best for the majority of citizens.

    In theory, we can do this because we have the vote. So, why are so many dirt-poor-and-getting-poorer people voting Republican?

    Job creators?? Imagine what George Carlin would do with that. -7.25 -6.21

    by Tim DeLaney on Sun Oct 21, 2012 at 09:24:57 AM PDT

  •  Tax Cuts for wealthy do not create jobs (5+ / 0-)

    NY Times op-ed by Laura D'Andrea Tyson and Owen Zidar:

    ...does it make sense to devote trillions of dollars to lowering income taxes for the top 5 percent? Is this an effective way to create jobs?

    Mr. Romney appears to think so. His plan rests on the assertion that lower taxes for high-income taxpayers will increase economic activity and employment – that lower taxes for job creators create jobs and will do so quickly. This assertion, while superficially convincing and ideologically compelling, is not supported by the evidence...

    ...Tax cuts for everyone else are a much more effective path to job creation. Our research found a statistically significant and positive relationship between tax cuts for the bottom 95 percent and job growth at both the national and state levels...
    There is no moral right to inherit gobs of money and a strong economic and moral case against it. Democracy thrives when people have roughly the same amount of wealth and withers when the super-rich have millions of times more wealth than most everyone else.
  •  47% of Congress are millionaires. (4+ / 0-)

    Going to be hard to get them to vote against their self interests.

    Source

    Republicans: if they only had a heart.

    by leu2500 on Sun Oct 21, 2012 at 09:45:17 AM PDT

  •  Rentier society (4+ / 0-)

    It's a terminology that has fallen out of favor, but predated Marx.

    ¡Cállate o despertarás la izquierda! - protest sign in Spain

    by gjohnsit on Sun Oct 21, 2012 at 09:48:13 AM PDT

  •  a direct tax on wealth (1+ / 0-)
    Recommended by:
    johnny wurster

    is unconstitutional, is it not?

    "Okay, until next time. Keep sending me your questions, and I will make fun of you... I mean, answer them." - Strong Bad

    by AaronInSanDiego on Sun Oct 21, 2012 at 09:49:06 AM PDT

    •  No (0+ / 0-)

      Congress has the power to tax and the limitation of capitation in article I section 8 was modified by amendment to levy taxes on income.

      "If I pay a man enough money to buy my car, he'll buy my car." Henry Ford

      by johnmorris on Sun Oct 21, 2012 at 01:27:04 PM PDT

      [ Parent ]

      •  tax on income is different (1+ / 0-)
        Recommended by:
        johnny wurster

        then a direct tax on net worth. Wasn't the amendment specifically about income taxes? I think a wealth tax might be similar to a property tax, but I thought those were unconstitutional at the federal level as well.

        "Okay, until next time. Keep sending me your questions, and I will make fun of you... I mean, answer them." - Strong Bad

        by AaronInSanDiego on Sun Oct 21, 2012 at 01:39:11 PM PDT

        [ Parent ]

    •  Aaron - you are correct (0+ / 0-)

      a direct tax on wealth would be unconstitutional. See coffeetalk's comment in this thread.

      "let's talk about that"

      by VClib on Sun Oct 21, 2012 at 11:06:08 PM PDT

      [ Parent ]

  •  Why special interest exemptions? (1+ / 0-)
    Recommended by:
    wsexson
    For the bigger fix, after making provisions for small businesses and family farms, taxing inherited assets above $1 million
    Why should some inheritances be exempt?

    Consider two cases. First, a child who has healthy parents who run a small business until the day they die in a plane crash. Second, a child whose parents are unhealthy and are forced to sell the business while their child cares for them in their later years. Why should the second get their $5 million inheritance taxed higher than the first?

    I suppose it's not a big deal since these exemptions will be easy to take advantage of (although doing so is not very productive to society). It will be hard, probably impossible, to make the definitions of "small business" and "family farm" tight enough to avoid exploitation without throwing the baby with the bathwater.

    For example, if I want to pass my $5M nest egg on to my children tax free, I would start "WillR and Family Gold Dealer". I'd carry a large inventory of gold (coincidentally, about $4M) and offer the gold on eBay at slightly above market. If some fool actually buys some of my somewhat overpriced gold, I'd replenish my inventory with the revenues from that sale. Small business, little effort, very liquid. Business goes to heirs tax free, heirs of course sell the gold the next day at market value.

    There should be no special exemptions. Special interest exemptions often lead to problems downstream no matter how well intentioned they were (look, for example, at the mortgage interest deduction which has helped drive housing prices out of reach of many who don't have enough income to benefit from it significantly and which helped contribute to the housing bubble).

    And, why would a "family farm" be singled out especially. Isn't it a "small business" - if it's not, it's a Hobby and shouldn't be subsidized any more than race horses and candle making should be.

  •  Paul Krugman nailed it with this development.. (1+ / 0-)
    Recommended by:
    Laconic Lib

    ..in plutocrat/Randain thinking (that OWS has helped to bring to the surface) - The ‘hereditary principle.’
     
    Today's entitled class members (re)-expanding the Randian objectivist philosophy’s definition to 'We should be grateful':  

    This actually represents a break with the previous defense of the rich. Until now, the official line has been that what we need are incentives — that jaawwb creeaytohrs won’t do their thing unless we dangle the carrot of immense wealth in front of them. But now we’re supposed to think that it’s not the prospect of future wealth, but wealth in being, that’s what is really so wonderful.
     [snip]
     But this is how it’s going. If the right continues to make political gains, coming next is a reaffirmation of the hereditary principle.
    I say re-expanding the defintion because haven't we been here before?  gilded age mind-set - or even farther back and across the ocean?
    Rich Guy Says We Should Be Grateful For His Wealth - May 2, 2012, 8:32 am

    Thx MB - That is so powerful - that Michael I. Norton, (Harvard Business School); Dan Ariely, (Duke University) study showing just how the American people would like the wealth distribution to be, juxtaposed with how out of wack it really is - and that people don't realize it.
     If we could somehow make this common knowledge - WOW I'll bet a wealth tax would become a major call to battle amongst the people
    - hotlisted

    •  Also from Kossack wu ming (1+ / 0-)
      Recommended by:
      Meteor Blades

      Why higher marginal tax rates are vital to limit a permanent plutocracy from wreaking havoc

      close the loopholes, and crank up the top brackets of the income tax. the point is not only to get revenue (although that's important), it is also to limit a permanent plutocracy with the financial power to destroy the economy and democracy with their accumulated capital.
      by wu ming on Sun Jun 10, 2012 at 06:24:08 PM PDT
  •  As always (0+ / 0-)

    MB has a fantastic post. My only caveat would be that this country has not seen this type of wealth inequality since the 1880's -1890's. It is far past the point of the 1920's..

  •  Morality (0+ / 0-)

    Why is it a good thing that anyone can be worth a thousand times the average person?

    Money is power. We need economic separation of powers just like we need it for politics.

    Government and laws are the agreement we all make to secure everyone's freedom.

    by Simplify on Sun Oct 21, 2012 at 12:02:53 PM PDT

  •  Wealth tax is a bridge too far (1+ / 0-)
    Recommended by:
    VClib

    Income tax, yay. Wealth tax: no way.

    An income tax is the result of a policy that says, "Everyone who earned income in the last year should kick some of that money into the govt coffers so we can keep the place running."

    A wealth tax would be more like, "You've got something, we want it, and we're going to take it."

    That is not an idea or ideal I could support. The estate tax situation could use some changes, but a "tax on wealth" sounds particularly evil.

  •  Asset Tax in France (0+ / 0-)

    France HAS an “asset tax” on the wealthy.  All assets are taxed (wealth tax = tax on everything you own) as well as on income.  The French are smart.  We just haven't caught up with them yet!
    By the way, Romney went to France instead of serving in our military, got rich chop-shopping US businesses and eliminating US jobs, off-shored his money in the Cayman Islands, and now tells us to "Believe in America."  What GAUL!
    "The Republican Party is fundamentally crooked and might well be outlawed one of these days."  —Gore Vidal  

  •  Wealth and You (0+ / 0-)

    Gina Rinehart, the world's wealthiest woman, ($18 billion fortune in iron ore prospecting) came under fire last week (Sept. 2012) after she wrote a column urging those "jealous" of the wealthy to "spend less time drinking or smoking and socializing, and more time working."  Ha, ha, ha, ha, ha, ha, ha, ha!

    "We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both".  —Louis D. Brandeis

    Patriotic Millionaire Robert Johnson, former chief economist of the U.S Senate banking committee, said that the current economic system is not broken, but it is "working on behalf of those who designed it in their favor."
    "America is no longer based on markets and capitalism, instead our economy is designed as 'socialism for the rich' – it is designed to ensure that the wealthiest people take all of the gains, while regular Americans cover any losses," he said at a press conference in Washington, D.C.

    "It's a Las Vegas economy where regular Americans put their money on the table and the richest 1 percent own the house," he said. "And if the 1 percent happen to lose money, the 99 percent bails them out – covers their losses and then stands by watching while the house does it all over again."
     

  •  One Message To Every Ear (0+ / 0-)

    If there's one unifying message the Progressives need to put forward with emphatic clarity and perseverance to every media outlet and private listener alike, it's the message of fighting inequality and feudalism by reforming the tax code!

    "... all things for which you pray and ask, believe that you have received them, and they will be granted you." --Mark 11:24

    by november3rd on Sun Oct 21, 2012 at 06:22:43 PM PDT

  •  the republicans are winning this with the easy (0+ / 0-)

    lines.
    talking points.  remember, people don't know how to think anymore.  if you have to explain it, you've lost.

    "it's not fair to tax rich people more"

    case in point my idiot co-worker who thinks taxing a millionaire at 10% and someone who makes 20,000/year at 10%.  because, you know, that's "fair".

    "free market !"

    cuz, you know, the free market is fair.

    well, life isn't fair, but that doesn't mean you don't try to make it a little more fair.

    and then the ever-popular,

    "it's a death tax !"

    how you you possibly support taxing death ?!

    big badda boom : GRB 090423

    by squarewheel on Sun Oct 21, 2012 at 08:32:19 PM PDT

  •  Inflation? (0+ / 0-)

    Would targeting, say, 6% inflation function the same as a tax on wealth?

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