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catallaxy in technical exile

Inheritance tax

with 65 comments

If nothing is certain except death and taxes, why not get them out of the way at the same time? I’ve often wondered why an estate or inheritance tax is not used in Australia. To me it seems a logical and comparatively fair way of performing the burden of taxation. Income taxes make generating wealth more difficult, so why not shift the burden off those actually generating new wealth and place it increasingly on to those who are getting it merely due to chance of birth?

Surely raising taxes this way is more efficient? Taking it off those who have windfall gains rather than those who are actually generating the most must be more efficient. In principle I can’t see any arguments against it that don’t also apply to income tax. I can understand there may be considerable practical difficulties in actually doing this, but this does not seem to be the reason people are against it.

So can anyone give me a good reasons for not having an inheritance tax in exchange for lower income tax? Or is it just a fantastic idea that we should go back to?

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Written by Admin

November 14, 2006 at 11:05 pm

Posted in Uncategorized

65 Responses

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  1. I do v much like the point that death is unavoidable, which suggests you cannot distort much by taxing death. But actually you’re not taxing death, but rather wealth, including accummulated income.

    There are two problems with this. The first is that people who don’t have a desire for behests wouldn’t keep aside 25% of their income over the years accummulating wealth, so come death, there would be a lot less to collect. In fact, if you knew when you were going to die, you’d spend so there was nothing left at that moment.

    2nd, to the extent that people have a desire for behests, that is, wish to leave money behind to others when they die, they’ll go to great lengths to give this away before they die to avoid the tax. I think trying to legislate to prevent this could prove tricky.

    Kodjo

    November 15, 2006 at 12:11 am

  2. “All men are born equal”.

    Noble sentiment, but utter bullshit. Of course we should have an inheritance tax.

    melaleuca

    November 15, 2006 at 2:53 am

  3. What Kodjo said.

    You have to ask the basic question, what is the money for? And if you move in the direction of the minimum state you simply don’t need more revenue.

    The problem of poverty for able bodied people lies with the values that they have learned and the incentives that they are offered. It is not a revenue problem.

    Another reason to allow people to pass on their wealth – there used to be a class of idle rich who may have been mostly useless bores, I don’t know, but it was a class that produced some valuable eccentrics, explorers, innovators and independent thinkers who could speak out without fear or favour and we are desperately short of people in that situation nowadays.

    Rafe Champion

    November 15, 2006 at 5:37 am

  4. Why treat windfall gains received as the result of death differently from other gains, such as people giving their money away (as Kodjo points out that they will anyway if there is a death tax) or gambling wins?

    Andrew Norton

    November 15, 2006 at 5:46 am

  5. Tax competition is why we don’t have an de jure inheritance tax. Although I understand some capital gains taxation may apply when the estate is realised. So turning Steve’s question around, “Why don’t we have a death tax?”, we have a good libertarian answer – competition. Why do the Americans have a death tax – tax cartel in Federalism. Federalism as a political system is meant to ensure diversification (after yesterdays High Court decision, I really don’t think anyone can continue to claim Australia has a viable form of federalism), but it do lead to a lack of fiscal competition – especially when the states and federal governments collude to levy tax at the Federal level.

    Sinclair Davidson

    November 15, 2006 at 6:27 am

  6. Like Kodjo I like the idea very much and have advocated it in the past. But I’ve been repeatedly told it doesn’t work very well in practice. For instance we know that the US and UK have had them and they used to be pretty heavy in the UK. But have they actually necessarily led to more dynamic tax systems? Have they played much part in facilitating cuts to other less efficient (in theory) taxes?

    Jason Soon

    November 15, 2006 at 7:04 am

  7. Sinclair is right, CGT does apply to the sale of assets you inherit, other than the family home and some personal use assets. That is enough. It means that when you get the real windfall, ie the capital gain from the sale of the property, and have the liquid cash to pay, you can pay.

    Anyway, inheritance tax is a typical left wing, envious, excremental idea. What are we all working for if not to leave our hard-earned pelf to our heirs. The State is shite: it is my servant not my master, and dickheads who want to tax me better have a better reason than the load of old bollocks served up by the proponents of a death tax.

    In any case as a tax expert, I’d gleefully help people get around such a stupid tax with straight abandon.

    Rococo Liberal

    November 15, 2006 at 7:17 am

  8. Thanks for all the comments.

    I wasn’t envisaging a 100% tax on inheritance, so I don’t see that a say 25% tax would stop the incentives for accumulating wealth, any more than a 40% tax rates on income stops you working.

    With regard Rafe’s point about what’s the money for? Its for tax cuts to other more inefficient taxes (if any). As we are not coming off a zero tax base we should be comparing between alternatives not talking about raising additional revenue.

    As for Andrew’s point about windfall gains, it would seem that a gift tax would be necessary if you had an inheritance tax, which probably makes a strike against it. As for Gambling I don’t accept its a windfall, you are taking on risk, and generally getting a crap return for it, but either way its not a windfall.

    Still I can accept the idea that it doesn’t work very well in practice particularly since you need clamp down on gifts and Sinclair’s point regarding tax competiton.

    Steve Edney

    November 15, 2006 at 8:00 am

  9. RL is completely wrong.
    It is actually a right wing idea.
    the market will only allocate resources properly by people who have actually grown the assets themselves bot been given it.

    Sparta was a good example of this!!

    It won’t give the State a lot of money but it is invaluable in countering tax avoidance.

    Bring Back CL's Blog

    November 15, 2006 at 9:31 am

  10. It all depends on the threshhold. Set it too low and you’re stealing bread from the mouths of widows and children. Set it too high and it becomes irrelevant – does anyone seriously expect that the estates of, say, Frank Lowy/Richard Pratt/Harry Triguboff would pay anything like the legally specified rate?

    More trouble than it’s worth, despite the moral suasion of unearned wealth. Far better to have the regulators comb through the estates of dead spivs and confiscate that which can’t be accounted for, to finally reap that which said spivs were playing ducks-and-drakes with when alive.

    Andrew Elder

    November 15, 2006 at 10:37 am

  11. Death taxes are a tax on capital. Any tax on capital lowers living standards and the economic well being of the country by having a negative effect on the captal structure of the economy.

    Want lots of investment capital? don’t tax it. Want to reduce capital accumulation? tax it.

    JC.

    November 15, 2006 at 12:36 pm

  12. Steve (Rafe—see v end)

    Think about it this way. Assume an average tax rate on your income over the course of your life of 20% accounting for evasion etc.

    Now ask yourself, would you raise the same amount with a an identical tax on people’s accummulated wealth, assuming a similar evasion rate (so I’m not allowing for the fact that it is probably easier to give away one’s wealth in anticipation of death than it is to evade tax on income).

    The answer is surely no because people smooth their income flows over their lives. To see the effect of this in a v simple context, assume I have no wish to leave any money behind to anyone. If I knew exactly when I was going to die I’d simply die penniless. The tax the government would earn on what I left behind would be 20% of zero.

    Of course, people don’t know when they are going to die, and some would die young with more wealth to tax than they’d have liked, but more often folk will die within a reasonable range of their estimate and have run their wealth down on account of that.

    Rafe—the relevant question is not whether a better government would require lower taxes, but whether you could devise an estate tax that would raise much revenue at all. Maybe it would raise enough, but I’m skeptical. Put another way, for most levels of taxation, an estate tax would simply be unable to raise the same revenues as more common taxes.

    Kodjo

    November 15, 2006 at 12:48 pm

  13. can anyone give me a good reasons for not having an inheritance tax in exchange for lower income tax

    simple – it’d have to be a hell of a tax to give much relief from income tax.

    I’m in favour of inheritance taxes in principle, but Steve’s right – they can never be great money-spinners.

    Do some rough maths. About 250k Australians die each year, with an estate worth on average say $100k (remember we have to include those that die young, including at birth, in this average). That makes a potential base of $25 billion (if we include private houses). Compare that with a potential income or expenditure tax base of about $600 billion.

    They fall into the category of minor taxes – worth having, but not the main game.

    derrida derider

    November 15, 2006 at 1:09 pm

  14. So why would you be favour of an “inheritance tax in principle”, DD and then contradict that statement with rest of your missive.

    Another example of Kerry induced lefty speak. I voted for it and voted against it.
    Lefties never make sense.

    JC.

    November 15, 2006 at 1:42 pm

  15. let’s start from the working premise that all taxes are bad. Taxes are friggin evil. There are degrees of evilness, however..The worst form of evilness is a capital tax as it DOES totally screw up the capital markets and capital accumulation.

    The least damaging form of tax is a tax that’s based on an income formula. Even less damaging would be an expenditure tax as it does promote savings in a sort of perverse way.

    JC.

    November 15, 2006 at 1:47 pm

  16. JC–I think DD is saying something fairly straightforward—that he likes inheritance taxes, perhaps as a matter of principle, but doesn’t think they’d raise the kind of money a tax has to raise, and by a long way. Consequently, he thinks other taxes would be good too.

    Kodjo

    November 15, 2006 at 3:12 pm

  17. JC, go back to basics.Capital goes to those who by their own physical and/or intellectual labours gain the stuff.
    In that way resources are allocated efficiently.

    On the other hand people who inherit wealth are unlikely to understand the risk involved or the need for a decent return on capital.

    Look no further than the land.
    Way back when ABARE or its earlier name showed a vast difference on ROEs between those on the land that has purchased their farm and those who had inherited theirs.

    Get back to understanding the basics of capitalism

    Bring Back CL's Blog

    November 15, 2006 at 3:13 pm

  18. Can’t do it Steve.

    Its a direct tax on capital. It will harm the low-paid workers even more then the income tax does.

    It seems like justice. I know it seems like justice to add inheritance tax and lift the income tax free threshold. But the income tax free threshold ought to be lifted anyway.

    And this is not justice. The only reason it appears to be justice is that we have rampant counterfeiting.

    Which means some rich slobs with a lot of time on their hands can buy Residex’s services and figure out which suburbs will find their land-price going up. And they can hoard land like Smorg hoards gold. And make millions for doing next-to-fuck-all.

    Well thats an unfair characterisation.

    But more generally with monetary policy high and unstable that gives an edge to the already rich and slants the investments by which they make more money.

    And its only us living all our lives under such wanton printing-press macromancy that leads us to imagine that inheritance tax could even possibly be just.

    In fact it could not be more hateful. There you are and your pops dead. And these tax-eaters are rifling through your papers while you are still grieving. Along with the funeral and all that you have to start selling stuff off.

    Not only that in some cases the old bloke will feel forced to divide his legacy between Regan and Goneril ahead of time.

    And we all know what this sort of thing can do to an old buggers status in the family.

    In fact you would want it the other way. You would want young wealthy blokes to be able to avoid a TOTAL ASSETS TAX by deeding it WITHOUT CAVEATS to some fellow of retirment age.

    You’d wind up with a lot of people respecting the elderly lest some big-titty blonde show up and coax the house you thought was yours off the old man.

    Its bad just from a revenue-raising point of view. Why rip a family fortune apart if instead you could hit them for 1% total assets tax with an extra loading for real estate for the next 100 years.

    One doesn’t want to encourage thieving of course. But even from the point of view of theiving. The least you can do is be a smart thief.

    And plus more and more I’m thinking you need these family fortunes for when we get rid of state-funded science.

    We need to convince these receivers of large inheritances that its up to THEM to drive pure research and cultural output with some of the things that the old man left them.

    Because we seem to have reached a stage where state funding of science doesn’t work anymore.

    GMB

    November 15, 2006 at 3:22 pm

  19. “Way back when ABARE or its earlier name showed a vast difference on ROEs between those on the land that has purchased their farm and those who had inherited theirs.”

    Well we would have to check the tax-eaters figures of course.

    And for that matter your own claim. Got that link fella?

    And that shows how good capitalism is. If the kids aren’t up to it then they will have to sell out eventually.

    But then again was there an inheritance tax when this ABARE deal was researched.

    If so that would be typical.

    Blood-sucker-central comes in at the funeral, steals all the working capital, makes it hard to get back on track for years.

    And then runs a survey saying the victims were unworthy.

    GMB

    November 15, 2006 at 3:27 pm

  20. In fact it could not be more hateful. There you are and your pops dead. And these tax-eaters are rifling through your papers while you are still grieving. Along with the funeral and all that you have to start selling stuff off.

    From a political point of view this would seem to be the most telling argument against one and trumping any idea of economic efficiency.

    Steve Edney

    November 15, 2006 at 3:40 pm

  21. Well its stupid politically. An outrage morally. And from an efficiency point of view its just a disaster.

    GMB

    November 15, 2006 at 3:46 pm

  22. Steve
    Can you explain why a capital tax is a good thing.

    JC.

    November 15, 2006 at 4:18 pm

  23. because it’s not just a capital tax, JC. It’s a capital tax that only targets one very specialised disposal of one’s capital.

    Jason Soon

    November 15, 2006 at 4:21 pm

  24. No.

    I agree that discouraging people from accumulating capital is bad. My point was that in taxing income we are restricting people’s ability to accumulate capital, and we are doing it most to the people earning the highest and able to do it fastest.

    However as several people have pointed out, it doesn’t turn out that way, it has a number of problems from the point of collection, the effect it has on people accumulating wealth and the unusually cruel timing of the collection for relatives. Additionally as DD pointed out it won’t raise all that much to decrease income tax without being fairly punitive.

    Which is all what I wanted to find out. A fairly useful dicussion I thought.

    Steve Edney

    November 15, 2006 at 4:34 pm

  25. Way back then Birdy means a long time ago which was well before the Internet.

    When we had to look up APAIS and others to look for Journal articles.

    Bring Back CL's Blog

    November 15, 2006 at 4:36 pm

  26. “I agree that discouraging people from accumulating capital is bad. My point was that in taxing income we are restricting people’s ability to accumulate capital…”

    Well thats true of course. But the vice versa is true also.

    But taxing capital you are destroying peoples ability to earn income. Not just the people with capital but for those without.

    And just as directly or more directly then the other way around.

    So there’s just no cure for it. People simply have to be quits with their fantasy that they are doing any good having a bunch of spending.

    GMB

    November 15, 2006 at 5:19 pm

  27. “Way back then Birdy means a long time ago which was well before the Internet.”

    Was there an inheritance tax in place at the time?

    GMB

    November 15, 2006 at 5:22 pm

  28. The other problem with inheritance tax is that the main inheritance most people would receive is the family home.

    If they are then required to pay a tax in cash then they will often be required to sell the home in order to pay it, because most people don’t have $150,000 in cash laying around (assuming the tax is something like 25%).

    This would be enormously unpopular, especially amongst the middle class.

    yobbo

    November 15, 2006 at 5:30 pm

  29. Yobbo that can refinance through debt. but yes I agree it would be unpopular

    Steve Edney

    November 15, 2006 at 5:55 pm

  30. One of the other reasons is the lengths people go to to avoid it. The very rich manage to avoid it by clever structuring and living, for tax purposes, nowhere.
    As is usual with taxation of this sort – the rich do not pay and the poor do not benefit. All that happens is the middle class cop it.
    I remember discussing it with a woman who had lost her parents back when Australia had one. Days after her father’s death the ATO were rifling through all his property – down to his suits – to work out his wealth so they could tax it. She said it was about the most traumatic part of the death of her father.
    The only way to check on a person’s wealth after his or her death is to do this sort of thing. Sorry, guys – but this is one bad idea.

    Andrew Reynolds

    November 15, 2006 at 5:59 pm

  31. Can you guys just once show me an idea that actually increases the economic pie ( jason excluded). I have yet to see a lefty present an idea that would actually do that.

    The supporters of death taxes need to explain why you are always in favour of consumption instead of capital accumulation.
    A death tax is a transfer from capital to consumption. By doing this all you would be doing is reducing the capital to labor ratio.

    JC.

    November 15, 2006 at 8:16 pm

  32. Post #21 says it all about the administration of this tax.

    Capital is like fertiliser, JC. A potential hazard when concentrated, but highly effective when spread around (a process which actually increases the stock of fertiliser over time, so much for your dichotomy).

    Try making the claim for the retention of excess capital as the only and ultimate good after reading this.

    Andrew Elder

    November 16, 2006 at 3:20 pm

  33. “Capital is like fertiliser, JC. A potential hazard when concentrated, but highly effective when spread around (a process which actually increases the stock of fertiliser over time, so much for your dichotomy).”

    No its not like a fertiliser.

    Because a fertiliser doesn’t work until its spread around. Whereas if you steal capital and spread it around its destroyed for all time.

    Now its not so nice that so much capital is in so few hands.

    But if one didn’t want that then one wouldn’t run a policy of fast and unstable monetary debauch.

    GMB

    November 16, 2006 at 3:38 pm

  34. “Yobbo that can refinance through debt. but yes I agree it would be unpopular”

    What DON’T you agree with?

    What?

    You agree that it would be unpopular but you think it would be efficient?

    It would be a disaster on all levels.

    Now you guys just have to get used to the idea that you can’t have a big-stealing big-spending government.

    Suppose I wasn’t a RIGHTEOUS working-class man.

    Wouldn’t it be so easy for me to get all greedy and start dreaming up ways to mitigate this orgy of thieving you are day-dreaming about?

    But we all could be hurt very seriously by this.

    And whats more it will skew things in favour of these big companies and trusts as opposed to your Sole Trader.

    That means that your top executives will wind up a filthy leftist elite of conformists that follow the leftist group-think mind.

    I couldn’t think of more of a hateful tax.

    And once again. Unless you have Don’s disease the only reason you are thinking this way is you have grown up under counterfeiting. So it seems like a fair corrective. Rather then just about the worst tax there is.

    GMB

    November 16, 2006 at 3:45 pm

  35. “Way back then Birdy means a long time ago which was well before the Internet.”

    Dude. Do you know whether or not this study came out WHEN THERE WAS AN INHERITANCE TAX IN PLACE or not.

    This is important. Because this notion that the heirs are always unworthy might be part of whats keeping this thing in the air.

    GMB

    November 16, 2006 at 3:49 pm

  36. Hi everyone. Formerly commented/blogged as “Another Bloody Libertarian”.

    Why not just have a Georgist resource rent tax? The efficiency arguments are simply overwhelming.

    Even in our rather wasteful public finance climate, an annual 7% charge on the unimproved market value of real property would cover the spending of all three tiers of Government. So about 2.7% would cover a libertarian “agenda”.

    Most people couldn’t indirectly work out what they paid unless their super fund and companies they held stock in disclosed it to them, but 7% of the value of your land is firstly predictable, but much less harsh than taxing their savings or labour.

    As for Paris Hilton, the capital there helps build up the Hilton Hotel empire. What would be the point of breaking this up?

    Mark Hill

    November 16, 2006 at 4:02 pm

  37. welcome back ABL, where have you been?

    Jason Soon

    November 16, 2006 at 4:41 pm

  38. Yea

    Where have you been ABL, we missed ya.

    Lot’s has happened since you been away.

    Nabakov and Fyodor have eloped and getting married somehwere in mexico. they’re then going on a sail around the carib with an all male crew. Can you imagine what’s going to happen. That marriage is going to last. Not. Needless to say Birdy and I weren’t invited.

    What else…..

    Birdy has now become a lefty and arguing with me accusing me of being a right wing Fyodor…. just kidding.

    Homer is still obsessing about Clinton and Keating.

    Jason is still breaking up fights…. one a day on average.

    There are still so, so many taxeaters around.

    Good see you round, Mark, err i mean ABL.

    JC.

    November 16, 2006 at 5:09 pm

  39. Marks right Edney.

    Although it must be said that upon introduction a Georgist tax would be an attack on both cash-flow and capital (in terms of the net wealth of the owners…..

    That is to say the immediate effects would be to hurt that same class of people two ways at once.

    So you would have to overcompensate them with some sort of extra tax dodges for all the other depredations they face.

    So what we are saying here is all of you still have to drop this dream of a big-stealing blood-sucker government.

    GMB

    November 16, 2006 at 5:18 pm

  40. Steve, I agree – and argued as much earlier this year. All taxes have deadweight costs, but inheritance taxes are less distortionary than most. And they have other advantages too, like perhaps encouraging the super-rich to think seriously about philanthropy.

    andrewleigh

    November 16, 2006 at 5:24 pm

  41. What does it do to capital accumulation, Andrew?

    Is that something we should even worry about these days or are we past worrying about capital accumulation?

    JC.

    November 16, 2006 at 5:27 pm

  42. As an aside.

    you know what makes death taxes horrible from a free human beings perspective?

    It’s the supposition that the state owns you and your possessions. The body is yet cold before the grim reapers are rifling through things you left behind to on sell them and keep the change.

    That alone is one good reason to keep the glommers away.

    JC.

    November 16, 2006 at 5:30 pm

  43. Andrew – love your gravitar! Bleeding heart – fantastic.

    Sinclair Davidson

    November 16, 2006 at 5:37 pm

  44. Dead-Weight loss and distortion is not necessarily the same thing.

    See how you switched words mid-stream as a bit of a dodge.

    What if you had instead have said:

    “Steve, I agree – and argued as much earlier this year. All taxes have deadweight costs, but inheritance taxes a HAVE LESS DEAD-WEIGHT LOSSES THEN MOST ”

    Now if you had said that we could have called bullshit.

    Thats precisely why its an abolute no-no.

    Its because its dead-weight-losses are so high.

    What was your argument again?

    There are heaps of dead-weight losses.

    But you want it anyway?

    Not willing to let the chips fall where they may right?

    Too addicted to the idea of spending lots of money on tax-eater shit right.

    But you should be more scientific about it.

    If government that size is harmful. Its harmful.

    Just accept it.

    Why is that such a hard thing to be clear on?

    GMB

    November 16, 2006 at 5:40 pm

  45. if you steal capital and spread it around its destroyed for all time.

    Rubbish. In the post after you said this Bird, you explained (post 34) how capital is built up – precisely by spreading it around.

    As for Paris Hilton, the capital there helps build up the Hilton Hotel empire.

    It does nothing of the sort! It is frittered away on bullshit.

    perhaps encouraging the super-rich to think seriously about philanthropy.

    One of the main reasons why Costello has been such a waste of time is because he hasn’t opened the tax system to actively encourage philanthropy.

    Andrew Elder

    November 16, 2006 at 5:44 pm

  46. Andrew
    you’re not seriously suggesting that one person (Paris Hilton) has the capacity to spend away the entire Hilton hotel investment are you?

    Jason Soon

    November 16, 2006 at 5:45 pm

  47. Andrew – what makes you think Australia’s super-rich don’t already give a lot to charity?

    Sinclair Davidson

    November 16, 2006 at 5:48 pm

  48. Elder
    If you come on this thread, try and figure out what is capital accumulation and how it occurs. Next try to figure what it supports, ie a higher standard of living. When you do that come back and apologise for being an idiot.

    next. What Paris Hilton dose with her life and money is not your business or anyone elses. She’s earned more money by working than you ever wiil in your entire life probably ten times over.

    this envy shit is so corrosive. It ruins lives.

    JC.

    November 16, 2006 at 5:51 pm

  49. No Jason, I’m saying that the capital she spends could be put to better uses.

    Sinclair: crumbs fall off rich people’s plates everywhere. The system pioneered by the Carnegies, Rockefellers and Vanderbilts is one to envy – to get people to spend their money in ways that have longterm, lasting benefits.

    Andrew Elder

    November 16, 2006 at 5:52 pm

  50. JC, she has earned no money at all.

    Andrew Elder

    November 16, 2006 at 5:54 pm

  51. She earned US$10 -15mill a year through movie appearances and endorsements for the past few years.

    you up to making that kinda loot, Andy?

    In any event, did your parents ever spot you any cash?

    JC.

    November 16, 2006 at 5:58 pm

  52. No Elder, you don’t envy. you aspire, you don’t envy. That’s a fucking evil emotion that you need help with if you can’t deal with it by yourself.

    Goes for everyone else who has larcenous motives.

    JC.

    November 16, 2006 at 6:01 pm

  53. She mighht be making that amount of money – I’ll take your word for it as you follow her affairs more closely than I do. Rather than “aspire” to a condition I’m not predestined to attain, I’ll take my chances with graft and brains and, with the right capital investment, it will pay off. You mightn’t aspire to hard work, and you could clearly do with some brains JC, but sitting on or frittering away capital (no, not accumulating it) like that is just a crime.

    Andrew Elder

    November 16, 2006 at 6:11 pm

  54. Andrew(s) – from my second CIS paper on taxation:

    ‘Taxpayers earning more than $1,000,000 make up about 0.02 percent of the taxpaying population; they earn 1.28 percent of total income but pay 2.39 percent of total net income tax. They contribute 7 percent of total ‘Gifts or donations’. Based on figures such as this, it is hard to justify the notion that the wealthy need to be motivated to ‘pull their weight and give back appropriately’. Not only do high-income earners pull more than their weight in the philanthropy area, they pull more than their weight in taxation too. …
    The UK and US, however, are high-philanthropic countries. It is unsurprising Australia performs poorly compared to these two economies. By way of comparison with the US, the top 5 percent of income earners in Australia paid an average tax rate of 37.9 percent in 2001-02, the top 5 percent of US income earners paid an average income tax rate of 22.95 percent in 2002. ‘

    http://www.cis.org.au/Publications/policymonographs/pm69.pdf

    Sinclair Davidson

    November 16, 2006 at 6:12 pm

  55. Your paper deserves detailed consideration Sinclair, I’ll read it overnight.

    I don’t think it’s a simple tax rate argument. In Australia, donations with longterm benefit, such as hospital or university infrastructure or research projects, are relatively rare compared to the US. This has to be due to the structure of the tax system rather than just the rate: obviously it’s better to have a philanthropist spend $X on a public good than for the government to try and take $X+Y from them, spend Y on admin costs, then finally come through with the $X. The inheritance tax is a blunt and feeble instrument to this end, but it’s a start.

    Andrew Elder

    November 16, 2006 at 6:26 pm

  56. “She mighht be making that amount of money – I’ll take your word for it as you follow her affairs more closely than I do.”

    You raised the gal as an issue, dickhead. It’s not me that hates her for what she does. I couldn’t care less about her.

    “Rather than “aspire” to a condition I’m not predestined to attain, I’ll take my chances with graft and brains and, with the right capital investment, it will pay off.”

    No, your twisting shit around here, Elder. The market values what it values. LA clubs value her endorsement by paying her to attend openings and etc. She’s really no different than a movie actor in that sense. She entertains. She’s an entertainer who gets paid for it. you may not value what she does, but the club owners and the movie people do. If they lose out its their problem, not yours.

    As for you taking you chances with brains. i doubt it, but then again Paris Hilton has proved you wrong.

    “You mightn’t aspire to hard work, and you could clearly do with some brains JC,”

    I have worked very hard in my life, Elder, don’t prejudge and get it wrong again. I’m not one to go round comparing if I am smarter than others, but when it comes to you I reckon our old Beagle has more even when he’s asleep ….and Beagles aren’t the smartest dogs on the block.

    “but sitting on or frittering away capital (no, not accumulating it) like that is just a crime. ‘

    How the fuck do you know if she’s fritting away capital. You get stupider by the day. You have no clue.

    She’s probably living a cost free life thorugh endorsements etc. Jeans companies, fashion
    houses would be given her everything they have so she wears their brands.

    She’s probably smarter at making money than you are, Andy. She’s proven so.

    What i am saying is that your motives are totally driven by envy. Deal with it, you’ll feel better about life.

    JC.

    November 16, 2006 at 6:31 pm

  57. Just found this:

    when wildly successful businessmen start giving away their money, they usually reflect the same traits they exhibited in piling it up.

    Oh, if only.

    Andrew Elder

    November 16, 2006 at 6:31 pm

  58. I sez:

    if you steal capital and spread it around its destroyed for all time.

    Elder sez:

    Rubbish. In the post after you said this Bird, you explained (post 34) how capital is built up – precisely by spreading it around.

    So I sez.

    No I’m right and you are wrong. If you steal capital and spread it around it is destroyed forever.

    And in a world of tight and stable money, with a tiny government sector financed largely from partial-Georgist measures…..

    …..most of Paris Hiltons wealth would be eternally purchasing capital goods making workers wealthier and more highly paid.

    So you were wrong on that one as well.

    GMB

    November 16, 2006 at 6:37 pm

  59. “All men are born equal”.
    Noble sentiment, but utter bullshit. Of course we should have an inheritance tax.
    >>>>>>>>>>>>>>>

    Fucking killer argument that was Munn……

    NOT.

    Here’s the thing.

    Left-wingers are idiots and they lie all the time.

    GMB

    November 16, 2006 at 6:39 pm

  60. They don’t get GB.
    They don’t get how coverting capital to consumption will eventually make you poorer as a nation.
    They don’t get it because they too stupid, or the thieving motive blinds them to steal more and more.

    I’ll tell you if Sharia law though in this form of theft as punishable by limb loss, i ould convert just to see these wanker walking around without a hand or two.

    Elder and Don would end up being stumps with the stealing they think uup.

    JC.

    November 16, 2006 at 6:46 pm

  61. Be nice, JC. Andew E has been very reasonable and civil lately.

    Jason Soon

    November 16, 2006 at 6:50 pm

  62. Sorry posted without edit.

    They don’t get GB.
    They don’t get how converting capital to consumption will eventually make you poorer as a nation.They don’t get it because they are too stupid, or the thieving motive blinds them to steal more .

    I’ll tell you if Sharia law covered this as theft, punishable by loss of limb, it would be fun converting just to to see who’s walking round missing a hand…. or two..

    Elder and Don would end up being stumps with the stealing they think up.

    JC.

    November 16, 2006 at 6:51 pm

  63. Ok, Jase.

    JC.

    November 16, 2006 at 6:51 pm

  64. “but sitting on or frittering away capital (no, not accumulating it) like that is just a crime.”

    I want to clean this issue up. I know you didn’t mean that in the legal sense. If people choose to spend their money going on a holiday, living day to day because of their high spending habits it is no one else’s business but their own.

    What is a “crime” is when the government enacts laws to confiscate dead people’s wealth.

    It causes enormous problems stealing like this. All it is doing is steering wealth into consumption through government edict. It also ignores the fact that the money has already been taxed. Double taxation is the cruelest form of theft/tax.

    Let’s see how honorable all those who support death tax are? There is nothing to stop any of you from sending any bequeaths to the ATO when a love one passes away. In fact Elder and those of you who support death taxes, put your money where your mouths are and demonstrate you mean what you say. Lead by example and will your assets to the Australian government. There is nothing to stop you.

    Let’s start with you Andrew E. Prove to us you mean what you say.

    JC.

    November 16, 2006 at 9:34 pm

  65. Er-um, for “behest” read “bequest”. Another reason for not drinking and writing.

    Kodjo

    November 20, 2006 at 3:54 am


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