I think spending money on your children shouldn't be culled. There's a good amount of benefit to society in entrepreneurs investing fiscally in their families. Sure, it might not be fair from a cosmic level, but creating new businesses and expanding the private sector is better than feeding the bloated government bureaucracies.

This is especially true because the social bonds and exchange of values and information that happen between someone who is successful and their family is more likely to be successful than the average person. In other words, while it might seem like nepotism from an outward perspective, it could be merit in actuality.

Instead, I'd support very high luxury taxes. Tax heavily lavish private jets, yachts, and mansions. These are the types of goods that will rapidly drain the funds of a rich trust fund kid who offers little to society. Don't take their startup investment.

"... better than feeding the bloated government bureaucracies."

I think this is probably the core of most of these disagreements. If you approach taxation with the assumption that it's mostly just money going to waste, then yeah, you're not going to be very supportive of taxation, especially high tax rates for high income, high net-worth people.

But even if you come at it from that point of view, it has to be acknowledged that there are certain kinds of services which are almost impossible to deliver other than via the government. The private sector will not give you healthcare for all, or any meaningful mass transit (much less HSR), or properly maintained roads and bridges, or a military, or any of a thousand other things that your multiple levels of government spend money on. Yes there is some waste due to corruption or bad decisions, but for most people that is an accepted cost to getting the services that can't be had any other way.

But most taxation does go to waste... if we define "waste" as "whatever elected officials fancy".

It's fairly easy to devise a system where taxation is fair (or at least more fair), e.g. by having "pots" - e.g. tax sugar drinks, but that tax revenue goes into the healthcare pot and can be used only for that purpose. If the ostensible reason for taxing rich people is "more equality", then that money should go into the "helping poor people" pot and be used only for that purpose (scholarships, financial aid / basic income, etc.).

Obviously, there's a reason politicians don't want to do that... because that would mean they no longer have control over money and can't spend/waste it as they want.

I don't really agree. There's a lot of value in having general revenue that can be directed toward the needs and priorities of the day— making these decisions is what our elected officials are there for. Especially when you consider the kinds of broad benefits that certain policies can have— for example, consider the billions needed for something like a new rapid transit line. Where should that come from, given that it offers mobility to people without cars, stimulates construction and job growth along the line, etc? It has a lot of broad-reaching benefits and knock-on effects that are hard to even completely quantify (think stuff like public health impacts due to air quality improvement and people making short walks to the station a part of their daily trips).

The other issue with the pots system is that it can give people a false sense of entitlement about things which benefit them. For example, consider the commonly-held belief that gas taxes pay for all road and highway infrastructure, and that roads and bridges wouldn't be falling apart if the government would stop "raiding" the gas tax pot to pay for other things. This is trivially googleable as untrue, but the pervasiveness of this belief blinds motorists to the reality of how much their preferred mode of transport is subsidized.

So people in this mindset approach a discussion about something like subsidized train fare and it's hard for them understand why it's a good deal for society.

Sorry for miscommunication. I completely agree that there should be a "general" pot and that a lot of taxes are spent and used in at least nominally (if not efficiently) good manner (one big exemption IMO is war-related spending).

I'm mainly saying that it would be easier for people to accept new taxes if that was the implmementation (and specifically taxes like wealth tax that are ostensibly "to decrease inequality" and not "because we hate the rich").

Oh I see. Yeah, certainly there's merit in that, but it can be a challenge communicating it effectively. For example, Canada now has a nominal carbon tax that's revenue neutral— all the revenues go into an upfront rebate that's doled out on a per-head basis with a slightly greater amount if you're rural vs urban. All this seems perfectly reasonable and is aligned with what economists recommend as far as ensuring that the system isn't subject to partisan criticisms or whatever else.

But if you actually look at the rhetoric around it, the right wing party that's in opposition slams it as being a "cash grab" and a "tax on everything" that makes life more unaffordable for everyday Canadians. Literally one of the main planks of their platform this election is scrapping a revenue-neutral tax in order to help Canadian families "get ahead".

So was there any value in going to the trouble of doing the rebate? AFAICT claiming the tax was revenue neutral mostly just opened up the gov't to a ridiculous semantic argument about whether it was truly revenue neutral given that sales tax was being applied after the carbon tax. Maybe it would have been easier to just impose the tax and then pair it with an income tax cut or some kind of investment in existing social safety net programmes?

A wealth tax doesn't prevent spending money on your children, it attenuates it. For a toy example, imagine a logarithmic estate tax. If you make ten times as much as everybody else, you can give your kids twice as much as everybody else. You're still giving them a big leg up, but for the dynasty to continue they have to make something of themselves.

A wealth tax encourages spending, for example on private school tuition, SAT tutors, and other things that can help your kids. It only hits the money/assets you have left at the end of the year. It's also likely unconstitutional in the US (despite being backed by an HLS professor, who you'd think would know better). Andrew Yang is backing a heavy consumption tax, which would be used to give cash to all adult Americans. This would have the opposite effect, since it would encourage savings over spending.

To my knowledge just giving people who need it money doesn’t encourage them to save it, but rather to spend it on what they need, which actually stimulates the economy. This is far more beneficial than leaving it as idle capital or in a savings account.

You're right that the propensity to spend is higher among low-earners, so if you're trying to stimulate the economy it makes sense to allocate there (all other things equal). But my point was about the futility of trying to use a wealth tax to cut down on generational transfers of wealth/advantage. If you tax wealth, that encourages people to spend instead of save. And if their concern is keeping their family in the top 5%, 1%, or .1%, there are plenty of ways for them to spend it in order to achieve that end.

Even that only works to a certain level. Just for illustration: say you have a 50% estate tax on anything over $10M. That would still leave a heir that receives a $100M inheritance with $55M to start with. You can easily double your money in your lifetime.

And that money would land in the states' pockets, it won't be distributed in a way that further levels the playing field.

Exactly why I think returning to an 80% top estate tax is fair, which is what we had in the US for the bulk of the 20th century [1]. It's only after Raegan that the rates dropped. And not surprisingly, that's exactly when wealth inequality started to skyrocket. IMO 80% on anything over the first $500K-1M indexed to inflation is totally reasonable.

Money in state pockets is de facto distributed to every citizen. Once it's in the state coffers, citizens can vote on its' use. You can't do that when Bezos' hypothetical idiot child has it.

[1] https://en.wikipedia.org/wiki/Estate_tax_in_the_United_State...

Money that the state collects is more evenly distributed across the population than money billionaires collect.

It appears to me that you're calculating on only one child per generation. That's possible, but it isn't the norm.

How does this help when generally only the poor don't have estate planning to escape these taxes?

The poor don't have estates. When they die, they leave their families wondering how to pay for the funeral, not how to preserve their holdings for the next generation.

The estate tax exemption is $11M, so you do not pay any estate taxes if the wealth you leave behind is less than that.

Do you know many poor people with more than $11M in wealth?

When you own a small business and some land your wealth may be over 11m but not liquid.

I guess I've never thought of a landed businessman as poor.

And of course there’s ways to solve this: tax the land at disposition. You don’t need to collect on the estate tax for land holdings as dollars at time of inheritance, you can just drop fractional ownership into a trust c/o the IRS and even retain right of first refusal if you should be able to pay it off in time. This is how the IRS already handles illiquid assets if an American chooses to expatriate: you get the choice to pay in cash or fractional ownership in trust.

A floor of $500K-1M indexed to inflation will ensure the poor don't have to plan their estates at all. These don't have to be hard questions.

So this generation, the upper middle class and higher will be affected, and next generation everyone above the extreme poor will be affected.

I picked a totally arbitrary number. If we sat down for more than the 30s it took me to make this reasonable sounding number up, I'm sure we could find a satisfactory system :)

Any satisfactory system will be alterable by

(a) inflationary practices

(b) those scheming to take advantage of loopholes

in 10 or less years.

Unless you (a) index it to inflation and (b) make an attempt to close loopholes, rather than surrendering at the starting line ^_^

I like your optimism, but I've failed to witness a law that has never been twisted into some gross contorted display of what it was normally used for at least once.

So long as the harm caused by those taking advantage of it is less than the good created by the change, it should still be put in place.

Texas in so many ways scares me, but the fact that many of their laws have expirations actually makes sense.