Who died and left the US $7B? • Hacker News Board

Re: Who died and left the US $7B?

#471

Post by AnthonyMouse » Wed, Oct 09, 2024, 10:25 PM UTC

CPLX wrote: post #463

AnthonyMouse wrote: post #452

Earlier quoted context omitted.

That isn't really the main concern. It's really a question of alienability. If your great grandfather invested in something a hundred years ago and now 99% of its value is appreciation (or inflation), you may or may not want to continue investing in it. If you do, the step up in basis doesn't really matter because you're not going to sell it anyway. But if you now think it's a mediocre investment, you may be inclined…

> There are probably better ways to handle this, but "delete it and replace it with nothing" is not one of them. Why not? Why do I care about someone being deprived of a portion of some investment his great-grandfather made? If I get money from some relative who invested in stuff and then you get money from working really hard in a way that someone thought valuable so they gave you money for your work, why should you…

> Why do I care about someone being deprived of a portion of some investment his great-grandfather made?

Because they only get deprived of it if they sell it, so that gives them more incentive not to sell it, but selling it may be more economically productive, and then you lose the positive externalities of the more productive investment and the tax revenue it would have generated, which could by itself plausibly be more than the loss from the step up in basis.

In general the problem is that capital gains taxes when implemented simplistically create a lot of perverse incentives (tax on productive investment is economically undesirable in general and some of the edge cases are especially ugly), and then the tax code gets full of warts that try to reduce the bad incentives/consequences instead of rethinking the structure of the tax.

> If I get money from some relative who invested in stuff and then you get money from working really hard in a way that someone thought valuable so they gave you money for your work, why should you pay taxes on that money while I don't pay taxes on the money I got from my dead relative?

Your dead relative already paid the taxes on any money earned in the equivalent way. Capital gains are on asset appreciation, which is an industrial-sized can of worms.

Re: Who died and left the US $7B?

#472

Post by ghodith » Wed, Oct 09, 2024, 10:26 PM UTC

geysersam wrote: post #188

_bin_ wrote: post #162

Earlier quoted context omitted.

This is something people love to rage about, yet it's not one with an obvious fix. The counterpoint is that this leaves money invested, which means others invest in other things, and still entails interest payments. It exists in part because you don't want someone who inherited his parents' house and wants to move in to go broke trying to pay taxes, or have to re-mortgage it, with an even stronger case with family fa…

> The counterpoint is that this leaves money invested, which means others invest in other things, This is a bad argument. Taxes are also money invested, in schooling, infrastructure, etc. It's a very common fallacy of people criticizing public spending to point to the stock market and say "Look! Imagine how rich we would be if we had just invested the public spending instead." Completely falling into the trap of disc…

Both arguments are bad, in that they are both based on the best use of money that isn't yours to use.

Saying "this person's money most benefits me if I let them keep it" vs "this person's money most benefits me if it's redistributed to me" are just two frames that reveal your belief in your entitlement to others property and labor based on your belief of it's benefit to you.

Re: Who died and left the US $7B?

#473

Post by bluGill » Wed, Oct 09, 2024, 10:35 PM UTC

bialpio wrote: post #434

bluGill wrote: post #361

Earlier quoted context omitted.

Most middle class don't have to work either - they are just not willing to accept the lifestyle that forces. Even poor people could find enough savings by 30 to not work if they really want to live that lifestyle. (I don't blame anyone for not wanting to live like that)

Out of curiosity, how much money do you think is needed to survive ~55 years ("savings by 30" + life expectancy around 85ish = 55yrs) without working? Also, please spell out biggest assumptions you're making.

Eat rice and beans $50/month. Live in a $200 tent with a warm sleeping bag replace every 10 years. every year you get $100 for clothing at goodwill (walmart for underware) No other possessions. don't get sick as you don't have health care, but you should on average live to 70 or so [5-10 years less than average with health care], assuming you are not unlucky. so about $70/ month.

I wouldn't want to live like that and I wouldn't wish it on even the most undeserable (life without parole prisoneers). you could do it. Some do it for a month or two in college as they see the world - but they go back to a more normal life and just fondly tell stories.

Re: Who died and left the US $7B?

#474

Post by bluGill » Wed, Oct 09, 2024, 10:40 PM UTC

arcticbull wrote: post #392

bluGill wrote: post #365

Earlier quoted context omitted.

In Singapore and a few other places. However in the US housing is not a government monopoly (sometimes low income housing is). You can always find a landlord in a different town. No need for a new job as you still live in the same metropolitan area.

Ok but what if the landlord raises rent by $200, while commuting would cost me an extra $250. Or what if I move from a town with good public transit to one where I have to drive by your own admission, several towns over. What if moving costs $1000, which is another $83 per month over a year.

Note that it doesn't need to you personally that moves. Even people who would move anyway will force lower rents just to attract new renters. It takes longer this way but renters typically search a large area when looking for a new place and they care about their costs vs ammentities.

Re: Who died and left the US $7B?

#475

Post by arrosenberg » Wed, Oct 09, 2024, 10:44 PM UTC

AnthonyMouse wrote: post #456

arrosenberg wrote: post #433

Earlier quoted context omitted.

> I think most tax grumbling comes from taxes rising (and, arguably, still not rising enough) to pay for bigger and bigger programs with an increasingly tenuous relationship to law or order. The Constitution addresses this confusion in its' preamble. The role of the government includes law and maintaining order, but it extends further - "We the People of the United States, in Order to form a more perfect Union, estab…

A perfectly valid way of reading "promote the general welfare" is as a constraint on the government, i.e. it shouldn't do anything not consistent with that premise, not that it's empowered to do anything that is. The latter would be inconsistent with the overall architecture of the constitution as setting out a government of enumerated powers. But the preamble to the constitution isn't legally binding anyway.

Even if you read it that way, it's not really a constraint. If I believe socialized healthcare improves the general welfare, then even your reading implies that it's something the government should be allowed to do. Maybe you don't think that should be it's overriding purpose, but I don't see how it constrains. If they wanted to be more specific, they could have been.

> But the preamble to the constitution isn't legally binding anyway.

No one said it was, but the intent of the framers, at least, is very clear - the government should do things that promote the general welfare, not merely establishing rule of law and enforcing civil order.

Re: Who died and left the US $7B?

#476

Post by deepsun » Wed, Oct 09, 2024, 10:58 PM UTC

One thing not discussed: Accumulated Earnings Tax. 20%

It forces companies to distribute gains to shareholders, not amass it.

It already exists, we just don't enforce it enough.

Re: Who died and left the US $7B?

#477

Post by WrongAssumption » Wed, Oct 09, 2024, 10:59 PM UTC

chgs wrote: post #114

IAmNotACellist wrote: post #86

Earlier quoted context omitted.

You think investment = trickle down economics? Is your 401k trickle down economics?

401k is a massive Ponzi scheme where people working today hope that people in the future will value their work. Imagine a world where you had 15 billionaires and 5 people working. How much are are. Those billions worth when they are fighting each other to have one of the 5 useful people wipe their ass in their care home?

I’m not confident you know what a 401k is.

Re: Who died and left the US $7B?

#478

Post by deepsun » Wed, Oct 09, 2024, 11:05 PM UTC

bluGill wrote: post #295

sushid wrote: post #19

Earlier quoted context omitted.

The article highlights that it’s not actually that hard for the ultra-wealthy to avoid a massive estate tax bill through proper tax planning and investment strategies. What’s striking here is that this individual wasn’t even the richest person to ever die, yet he paid the largest estate tax in history, likely by choice.

> likely by choice. There is an element of competitiveness there. Some rich want to be known as rich and so they can brag about paying the most taxes that in turns implies they have the most money. Others want to be quieter about their wealth and so don't want you to know they have it and wouldn't tell you how much taxes they pay.

Sometimes rich could not find a way out of paying a large tax, so instead they pull at least some good from their bad situation, and make it a PR.

And it's a good thing that government is strong enough to be able to collect large taxes. Contrary to popular opinion, rich people are mostly OK paying large taxes, but only as long as all other rich pay their share as well. The grudges they hold are only about unfairness, not about amounts.

Re: Who died and left the US $7B?

#479

Post by eli » Wed, Oct 09, 2024, 11:05 PM UTC

AnthonyMouse wrote: post #469

eli wrote: post #355

Earlier quoted context omitted.

These are just generic anti-tax arguments. Yes, if you pay your taxes you will have less money. And maybe you would have used some of that money to do good things. Oh well. I don't think anyone is seriously suggesting you shouldn't be allowed to borrow against assets. That isn't even the problem. The problem is that you can go your whole life without paying taxes on gains of those assets, then pass them on to your he…

> Yes, if you pay your taxes you will have less money. The issue is that it can cause you to have less than zero money, and be forced to sell (possibly illiquid) assets solely in order pay the tax. This is kind of a major deal, e.g. you have an asset worth $20M, but not if you have to sell it right now because it would take time to find the right buyer, so instead you're forced to sell it for $8M to the only person w…

I do not understand your first point at all. I’m saying we should eliminate the step up in basis for inherited assets. In what scenario would that force someone to sell something?

Yes their heirs could hold the assets forever and never sell, correct.

Re: Who died and left the US $7B?

#480

Post by kelseyfrog » Wed, Oct 09, 2024, 11:08 PM UTC

hgomersall wrote: post #424

kelseyfrog wrote: post #234

Earlier quoted context omitted.

It helps to conceptualize the circuit of money as it flows from government(G) to the private sector(P) back to the government as G-P-G. The outlays(G-P) and receipts(P-G) can both be increased or decreased to affect aggregate demand. MMT's view is that inflation can be a result of aggregate demand outstripping economic capacity, though not the only one. Supply-side constraints, resource shortages, or structural bottl…

Please everyone read this comment. Any disagreements should come with relevant references showing how it's wrong. An additional point to add is the mechanism by which taxation controls inflation. Tax serves to suppress demand in the private sector, freeing up resources that can then be bought at non-inflated prices. This is why super wealthy people are irrelevant to a sovereign government's ability to spend; their ma…

I will provide a set of example critiques to begin.

MMT alone may not provide sufficient guidance on how to adjust outlays and receipts to manage employment and inflation.

MMT may not be politically feasible. Politicians may not be navigate politically unpopular but economical necessary.

MMT may be domestically sound, but challenging to implement regarding international trade. It may result in devaluing compared to other currencies.

MMT may suggest that interest rates can be kept low indefinitely. It's unclear if this would result in excessive risk taking.

MMT may not be applicable to developing economies.

MMT may work in the short term to manage employment and demand but fail to cultivate long term economic development.

MMT's implication as having a larger governmental impact on investment may crowd out private sector investment.

MMT if implemented could be constrained by international investors. If international investors dislike a policy, it may have domestic implications.

MMT depends on having a government effective enough to implement it. If a government is too dysfunctional, MMT may fail in practice.