Only insofar as you believe taxation to be a moral commentary. If one thinks taxation is punishment for a decision, then I can see why one might see it this way.

I don't agree, though. Taxation is reinvestment into the society that makes the usage of that tool–money–possible in the first place. I think it's morally wrong to sequester a social tool in the hands of a few people who never made the investment to get that return in the first place, i.e. children of wealthy parents. I think it's morally wrong for anyone to get to pick and choose who will start out having already won the race. This is different from me being a bad business owner and people choosing not to do business with me.

Should parents be able to spend their earned money on their childrens' upbringing? Of course. If a wealthy parent dies should they be able to leave money behind for their children to have a decent shot at life? Absolutely. Does that require millions or billions of dollars to be hoarded, unused, passed from hand to hand, contributing to a skewed money supply that forces the fed to print more, play with interest rates etc to try to keep the system stable? No, I think there's a reasonable amount that the government can request returned.

Now, the _amount_ of tax is certainly debatable. But to take the extremist position of repealing the tax altogether is absurd IMO.

I would actually argue the government has a pretty bad track record when it comes to creating good incentives and "good" disincentives, so usually a better approach would be to try hard and avoid creating incentives or disincentives at all. Proponents of things like VAT, or other very broad, general, and hard to avoid taxes usually see it in those terms.

Moral or not it is a deterrent

I think you got cause and effect mixed up. Every dollar that the fed is printing is being hoarded because the fed decided to only give dollars to people that hoard money.

Is there something virtuous about hoarding wealth?

There's something virtuous about living beneath your means and ensuring that you can be self-sufficient in your retirement.

There's something virtuous about living beneath your means and ensuring that, at a minimum, you are not a burden to your family, but that ideally you provide them support rather than siphoning support from them. In order to do that, it's almost a given that you will die with money left over. (The alternative being feeding the bloodsuckers who sell annuities.)

One person's "hoarding of wealth" is another person's "natural outcome of frugal living and appropriate planning".

My understanding is that the point would be to not tax someone leaving a much less significant amount to their children, in the case of either an untimely or expected death, and rather using more targeted methods to prevent the accumulation of billions, like taxing those who accumulate billions.

As long as taxes are paid, it's nobody's business what I do with my money, as long as what I do is not illegal.

Obviously many poor people will decide that few rich people must pay more.

FWIW, it's not "obvious" that many poor people would decide that rich much pay a lot. That's not the case in US, for example. Sure, there're people who want to "make rich pay", but in general US system is already fair enough [1] (page links to multiple bipartisan sources).

[1]: https://www.dailysignal.com/2019/10/15/the-new-york-times-is...

I fail to see the problem, if you have more money than you could possibly use in a lifetime, why shouldn't that be redistributed through programs that benefit all of society, instead of whatever pet projects the rich person favors.

That person/family has shown some evidence that they're capable of investing money to generate an outsized return on that investment. I would tend to think they might be able to repeat that effect with the way they choose to reinvest the money, be it for societal value or charitable endeavors. I don't see evidence in balance sheets that governments have that same track record.

Society has made murder, theft, and rape illegal largely because of a fairly broad-based agreement that those are immoral.

Where there isn’t broad agreement on morality, I would prefer to avoid passing laws to regulate behavior and allow choice. (Roe v Wade/abortion being just one crystal clear case of this tension which I believe is generally best resolved in favor of individual freedom. I am free to follow my own morals where they are stricter than the law; I do not force others to follow them.)

Who decides that? The great and scholarly politicians we elect?

Sound familiar?

(I agree with your point if they are upper middle class or even have 10-50 million dollars of wealth). But when you are part of the top 0.1% of the population, there is no way you are living beneat your means to be self sufficient in retirement.

Well it's hard to argue that anyone who has positive wealth is living beyond their means.

I like Milton Friedman too, he had a cool show on PBS, but history isn't going to be good for that guy.

If you are saying an excess supply of credit leads to financial crises, I agree with you. But the federal reserve that intentionally pumps money into the big banks to make credit easy is a far bigger contributor.

I agree that Milton Friedman had his flaws, one of which is this very topic, he never properly connected the federal reserve, money expansion and easy credit to economic instability.

They invest in companies and expect a return! If money was directly redistributed, then the people running and working for those companies might able to keep that value that they have created.

When government provides a service that people don't want, that service can continue indefinitely, especially if the few who benefit can contribute back to the politicians who keep it going. Lockheed Martin and Boeing can contribute to some politicians to make sure that wars continue and they reap back way more than they contributed from the taxpayer who's only option is to vote between two pro-war candidates. Those jobs making bombs for Saudi Arabia to drop on Yemen don't contribute to society, they are a determent to society, yet they continue without end because nobody loses on that investment as long as the taxpayer can be forced to pay for it.

Suddenly 99% of the world is no longer discouraged from being fiscally responsible. Do I really care if a billionaire is fiscally irresponsible? Maybe for a single generation. After that, we're good.

"As a result, only about 2,000 estates per year in the US are currently liable for federal estate tax." [2]

The argument that it "discourages living frugally" is just complete nonsense.

[1]: https://www.irs.gov/businesses/small-businesses-self-employe...

[2]: https://en.m.wikipedia.org/wiki/Estate_tax_in_the_United_Sta...

What you linked is an Estate Tax (aka death/inheritance tax) which only applies when someone passes wealth on after death. If they decide to give all their money away to charity or otherwise spend it while they're alive it does not apply.

Also, there's nothing uniquely American about considering greed virtuous[0].

0. https://en.wikipedia.org/wiki/Ayn_Rand

I'm not sure where I stand on a wealth tax, but I would always be hesitant to tax money that in theory was already taxed when earned. I could certainly see the idea becoming more acceptable if the importance of community and a traditional, tight-knit family structure continues to erode.

Hopefully we can strike a balance between leaving only your direct descendants better off and leaving everyone in the next generation better off.

> I would always be hesitant to tax money that in theory was already taxed when earned

This is incompatible with having an income tax and any other tax. Although, income tax isn't exactly well loved by economists, so maybe there is something to that.

You're thinking that taxing the wealth of a billionaire is guaranteed upon death. Therefore from your perspective there are two options: taxing the wealth or not taxing the wealth. Except taxation is the exception, not the rule.

If you know your wealth will disappear then you will try to get rid of it before it can disappear. With the estate tax there is a strong incentive to just hand over your wealth to your children before you die or by spending it all on donations so the government can't take it.

Someone who has a lot of stored up value has given lots to society without receipt of anything but some electronic digits (yet). Plus if the government's rules were working they'd also have paid at least some taxes on all that stored wealth, leading to additional societal value.

in rational free markets sone does not need to give twice because the contribution to society is in the provision of things people want.

IMO most of the debate is missing that America doesnt have free markets and keeps trying to duct tape around it without fixing the actual bug.

People used to argue that saving (investing) is better for the economy than spending (consumption). That's an argument for a lower capital gains tax. But you could argue the US has gone too far in favor of investors, at the expense of consumption. Presumably more $ in the hands of the 1% = more investment, more $ in the hands of the lower 50% = more consumption.

Per https://www.forbes.com/sites/tommybeer/2020/05/21/the-net-wo... the combined net worth of every US billionaire was 3.4 trillion in May of this year. Per https://www.pbs.org/newshour/nation/3-ways-that-the-u-s-popu... there were 331 million Americans in January of this year.

Dividing that out: $10,271.90 per person. Not enough to live on the passive income even in the cheapest parts of the globe.

Probably because it sounds like utopian nonsense.

Why do you think that is the right metric? 3.4T is obviously a vast amount of money.

Assuming you're American I believe you still have people in gov that got rich because of their family starting a pyramid scheme. I wouldn't call that a benefit to society.

Remember those guys in the 90's tanking company stocks and reputations then buying em up under the guise of saving them only to dismantle em and make their profit on the sale of the scraps? yeah they made money removing jobs.

The list goes on and on.

It's not sitting around collecting dust.

Anything else is either an affront to democracy, or at best is is morally neutral. E.g. what this guy did is morally neutral, and only good relative to the Carnegie knockoffs trying to launder their reputation.

With a better system, we shouldn't have to introduce one-off taxes for "special events" like death because extreme concentrations of wealth should already be heavily and unavoidably taxed--passing wealth to one's children (or anyone else... in any other country) shouldn't make a difference one way or the other.

Estate taxes stir up an irrelevant debate about the morality of inheritance, and puts the government in the role of deciding this moral question for everyone, when that debate isn't necessary and doesn't really matter.

All that really matters is 1 - how much we need to fund the prerequisites for a modern and decent civilization (which includes things like basic income, healthcare for all, housing for all, education for all, etc., imho), and 2 - what is the most progressive, efficient, and sustainable way to raise this money.

I highly doubt the answer to #2 is an estate tax.

Unfortunately, government is already the most extreme concentration of wealth in the history of mankind, spending $8 trillion dollars a year in the USA alone, of which $1 trillion (that's 1,000 billionaire fortunes, or bankrupting Jeff Bezos 5x over, every year) goes straight to the military.

And it's why I want government to use its monopoly on violence to stick to keeping the peace, and create an environment where actual companies can compete without violence.

Because when the men with bombs also own the means of production, they do whatever they want, and you get mountains of skulls.

Local roads, for example. You can have companies compete for contracts to perform the work, but ultimately the asset needs to be owned by the people, otherwise you inevitably get rent-seeking behaviour—which effectively replaces an elected Government with dozens of smaller unelected ones. Same goes for water, sewerage, and electricity distribution.

Public healthcare service delivery is another example. You can have companies compete for invention, manufacturing and certain boutique services, but for dealing with measles and broken arms, the profit motive does a hilariously poor job. Wealthy people get the absolute best service on this planet; poor people seem to get the most expensive service on this planet. (Yes, that's after factoring in the "cost" paid through taxes.)

Society works best when we all have healthy bodies, clean water and a decent education. Whether we all make good use of these resources is entirely up to the individual—Governments shouldn't mandate equality of outcome—but a functioning society is one where everyone has the opportunity to get a good education and not be a walking disease vector.

A view toward growing the economy would prefer the riotous living, because it moves more money around. Note that in almost any other context, Friedman is concerned with impediments to economic activity. Yet here, we are led to believe that high levels of economic activity are bad or immoral for some reason?

And of course "riotous living" throws off all sorts of tax revenue in addition to revenue and profits. And since such tax revenue is realized earlier than the death tax, it is more efficient.

The irony of this letter is that Friedman gets it right--the death tax exists to encourage the expenditure of wealth during life--but somehow thinks that is a bad thing.

This is an ad hominem argument.

This wealth would be more efficiently allocated by the innovators of new generations. It is true that the economy isn't a zero sum game, but we can't pretend that so much new pie is created each generation that dynasties hogging the majority doesn't preclude new, more innovative money, from establishing the positions they might otherwise we allowed to, for the benefit of all participants in the economy. The velocity of money matters, and allowing dynasties to guard their wealth indefinitely is bad for everyone.

This also pretends that capital confers no significant power. The reality is that the inheritors of the ultra rich will also inherit their ability to influence society. While not ideal that the ultra rich themselves have this ability to the extent that they do, to be able confer it on an almost arbitrary set of individuals is additionally hazardous, as they have not set themselves apart from other individuals on any meritorious basis.

Wasteful spending should also be taxed. There is no dichotomy. Yes please, put tax on carbon, on plastic, on all the other things that are bad for society. Ideally the most wasteful spenders should be taxed the most - the ten-millionth dollar someone spends on a carbon-emitting activity should be taxed at 90%.

The letter is BS with the first line. It makes it sound like the options are giving money to your kids or getting drunk. But that makes no sense for the range of money we’re talking about.

Jeff Bezos could throw a $10 million party every night for a year and his net worth would go down 2%.

“If I leave this hundred billion dollars to my kids, the government will take a portion. Better to spend it on hookers and blow instead!”

That makes about zero sense, so I don’t at all believe that’s the message the estate tax is sending or it would even matter if it was. The thing that keeps billionaires from partying isn’t the price tag.

> "As a result, only about 2,000 estates per year in the US are currently liable for federal estate tax." [2]

[1]: https://www.irs.gov/businesses/small-businesses-self-employe...

[2]: https://en.m.wikipedia.org/wiki/Estate_tax_in_the_United_Sta...

Ah, yes, such a shame that the only way to spend a fortune is on caviar and jetskis.

This is a purposefully obtuse take. We have specific tax structures to incentivize charitable giving, building businesses, creating things to benefit others.

At the wealth levels at which the estate tax applies, a fair amount of luck has to factor in. Having been in the right place at the right time. That has little to do with morality because many other people had the same behaviors but never got lucky. The estate tax is more a tax on luck than it is on hard work and frugality.

The primary way inheritances concentrate wealth is through the "firstborn son rule" where the first son simply receives all of the wealth. If you were to split the wealth among the children it would disappear within a few generations. So simplify the whole ordeal by codifying that no single person may inherit more than 50% of the wealth of the deceased. If son and daughter receive half the wealth of their parents they are unlikely to collaborate for the sake of maintaining generational wealth. Even if the son kills the daughter he will only receive 75% of the wealth of his father.

No liquidation is necessary and therefore it is easy to implement. Paying taxes on inheriting a family business is far more difficult than simply splitting ownership among the living who are still working in that business.

If a person lives on a million a year, but accumulates a billion, do they become more virtuous if they accumulate a second billion?

If everyone lived virtuously, then society wouldn't need laws or taxes. Unfortunately, humans are inconsistently virtuous, so we use laws and taxes to help our society function well.

His argument is hilarious:

"We're going to try and avoid it anyway, so you might as well not try to collect it."

I'm sorry, but I'm not necessarily going to trust someone who has a vested interest in the removal of something that its existence was pointless in the first place. If it truly is meaningless, then why bother?

Another good question is why should a person's accumulated wealth go to that person's heirs upon their death? Those people did nothing themselves to earn that wealth. It is only through the accident of birth they were selected. They completely ignore that. It is assumed that passing their wealth down is natural and right and that any other outcome needs defense.

If that money changed hands via employment or purchase of goods and services, it would have been taxed, even if the exchange was between parent and child. Why is an exchange upon death special?

The idea that you think needs to be defended - inheritance - lies near the root of Western mores. It is fine to question it, but it is the sort of thing that one cannot refute without a very, very strong argument.

I have private property rights over my money and house during my life and it’s my choice to consume during my life or live more frugally and pass that property to people I love. When I give my kids money for school or give them dinner, that value is not taxed additionally because it benefits them and not just me.

I found the problem.

Positing it as an unalloyed good to be frugal and accumulate wealth (especially at massive scale) is extremely murky at best.

However saving can hurt growth by reducing consumption.

Savings can be thought of as a steady state rate of saving that the economy has adjusted for. Saving is a higher order effect that causes an increase in the savings rate, temporarily depriving the economy of the level of consumption it expects.

If I buy $1mil of MSFT, I didn't contribute a cent to their payroll. I didn't create jobs, or grow anything. I just transferred $1mil to another investor, who will probably use that money to invest in AAPL.

Seems to me a huge portion of investment is just moving money around a relatively closed system akin to sports betting.

If MSFT never issues more stock, what then? Furthermore, helping to determine the value for possible future issuance seems like a very marginal benefit relative to the overall volume of stock trading.

If you have the means, there’s nothing moral about living frugally. Spending money creates jobs and strengthens the economy.

Very arguable claims there - more “trickle down” economics I guess. The main argument against the estate tax made by this letter is not “moral” as it claims, it is that few actually pay the estate tax - so how about we close those loopholes?