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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: Jim S who wrote (9399)	6/16/2006 12:55:46 AM
From: Peter Dierks	Respond to of 71588

The how much is ok argument becomes important only after you determine that playing Robin Hood is desirable. Is it ok then for a billionaire to pass along his estate if he has enough kids that each receives less than $1 B (indexed for inflation)? Or is Bill Gates with only one known child going to run afoul of the desire to limit the power of descendants of the super wealthy? The risks to our Republic are great. The risk of concentration of political power such as the Taft, Bush, Gore, Baye, or Kennedy families is a great risk too. The risk of monopolistic behavior by large corporations is great. Is the risk of a few rich kids tinkering greater than the others? When you start tinkering with estates of the super wealthy, you are messing with the few people with enough money to spend on legal fees to undo the majority of what you are trying to achieve. What, for instance, prevents a donor from creating a trust, donating their money and appointing their progeny to paid trusteeships? Doesn't that sidestep the Death Tax? There are many more ways to sidestep or subvert any such law. "I'm not sure that individual family wealth will always be diluted through incompetent or numerous progeny. And even if we could all be certain that such dilution would happen it could well be over the course of several generations, during which time considerable damage (or, at least lack of benefit) could occur." Some heirs are frugal, but the vast majority of them are spendthrifts. The Spendthrifts benefit the economy immediately far more than taxing the estate. The multiplicative effect of the economic activity spurs growth in the economy. The entrepreneurial heirs use the inheritance to invest in businesses which create jobs for others. The frugal but insecure ones just invest, which creates a capital base for others to utilize; either through banks, mutual funds, bonds, or the stock market for instance. The worst thing of all is the disincentive created by taxing estates. People remove productive assets from the economy to circumvent the restrictions on leaving untaxed estates. Often great family businesses are sold to avoid the risk of losing it due to estate taxes.

To: Jim S who wrote (9399)	6/20/2006 3:41:45 AM
From: Peter Dierks	Respond to of 71588

Thomas Jefferson: "To take from one, because it is thought his own industry and that of his father has acquired too much, in order to spare to others who (or whose fathers) have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, "to guarantee to everyone a free exercise of his industry and the fruits acquired by it." From: Mana Respond to of 743048

To: Jim S who wrote (9399)	8/2/2006 4:23:55 PM
From: TimF	Respond to of 71588

But back to the discussion of the point of where size becomes an impediment to capitalism, I think of the industrialists in the early 1900s and Microsoft more recently. Or the old Ma Bell, or monopoly utility providers. I think the industrialists of the 1800s and early 1900s where more a positive than a negative, and they often faced strong competition. Standard oil is often presented as a harmful force, and in some ways it might have been, but it kept lowering prices not raising them, and by the time it was broken up its market share was already declining. Those that didn't face competition , mostly used the government to protect them. That's not a problem of size as much as it is the normal special interest / public choice problem. The old Ma Bell might be a good example. In some parts of its business it really did have a monopoly. But real monopolies, that aren't created by government action are rare. Similarly, I'm not sure that individual family wealth will always be diluted through incompetent or numerous progeny. And even if we could all be certain that such dilution would happen, it could well be over the course of several generations, during which time considerable damage (or, at least lack of benefit) could occur. Not only does the fortune get divided amongst heirs, but it becomes a smaller part of the economy as the economy grows, unless the heirs get out-sized returns on investment. There is no reason to think they will. They might not share the skill, character trait, or special opportunity that allowed their ancestor to generate a huge fortune. Also the fortunes are small as a percentage of the economy. Even Gate's wealth is a drop in the bucket in the US economy. Its small compared to the GDP, and the GDP is production each year, not the total value of American economic assets. Compare Gate's yearly income to the US GDP, or his total wealth to the total stock of value of the country and its tiny. To rely on devolution of wealth through natural economic processes is simply the mirror image of the Marxist contention that power will always devolve to the worker. And, we KNOW that doesn't always happen. To say it will always shrink would be illogical. To say it will normally shrink in real terms, and esp. as a percentage of a growing economy is borne out by past experience. As a practical matter, I really don't know how to handle the situation. Like you, I oppose the idea of using taxes to redistribute wealth, but I also don't much like the idea of the majority of wealth being amalgamated in a concentrated feudal few. If using taxes to redistribute wealth is bad in your opinion, but its also the only method to deal with another bad of "wealth being amalgamated in a concentrated feudal few", you might want to see real evidence that wealth is being so amalgamated before you support the redistribution. Why impose undesirable cure for a disease that might not even exist?