Caesar Steps in…

to save his dear good friend Mammon.  I was *so* worried that the uber-wealthiest, fresh from getting our bailout money, might have to contribute to the common good, but thanks to Caesar they are spared the hundred billion they might have owed.

I’ll bet the hungry homeless guy doing a 15 year stay in prison for taking a hundred dollars and then returning it is relieved at this wonderful act of mercy from a just and wise state that, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread–unless the bread is in the form of subsidies and tax breaks.

"No. I used "God-damned" with exacting theological precision to refer to God-damned sins, not sinners. ..."

Not coincidentally….
"Robert Woodman is claiming that Mark has been cursing and using God's name in vain ..."

Not coincidentally….
"So much for hating the sin and loving the sinner. Boy was Augustine dumb."

Not coincidentally….
"You know, I feel like you need to be more careful with your word choice. ..."

Not coincidentally….

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  • Marthe Lépine

    Correcting that loophole might go a long way to reduce the deficit, and it’s not as if the people affected would have to go without food.

    • Dan F.

      it wouldn’t really – If the loophole has “cost” the government $100 Billion (of money that had already been taxed and taxed again) over 10 years that would amount to an average of $10 Billion a year. Real money but in terms of the deficit, miniscule – on average about 1-2% of the annual deficit.

  • Even Covey says the practice, which involves rapidly churning assets into and out of trusts, makes a mockery of the tax code. “You can certainly say we can’t let this keep going if we’re going to have a sound system,” he says with a shrug.

    With a shrug! I have a hard time restraining my hatred for these attitudes. I know absolutely upstanding Christian men whose attitude towards the government and taxes is exactly this: “If I can find a way to game the system, why not? There’s no such thing as a ‘fair share’, and the government’s just trying to get as much out of me as it can.”

    • Dan F.

      I’m going to suggest that that quote is likely out of context as well as the editorialized “shrug” – not because I have any stake in defending Covey (I don’t even know who he is) but because the rest of the article, as well as the description of how a “GRAT” works is complete bunk and reveals an unsophisticated understanding of the questions and challenges surrounding estate planning (see my comment above).

  • jaybird1951

    I am way way distant from those people in my own net worth but I started out from zero assets as a working class boy who paid his own way through college and grad school. I scrimped and saved over the years and made some judicious investments to the point of having an estate value close enough to the tax trigger. My question: Why should anyone have to pay the government a tax for accumulating assets through hard work and good fortune? The federal government didn’t help me set aside those savings (my upbringing helped) and it didn’t share in the risks of those investments I made. Those savings are accumulated after tax income; the government (state and federal) has already gotten its claws into my income steam and will receive taxes on my IRA distributions while alive. I plan to leave most of my estate to various Catholic charities and institutions in addition to my siblings. Anything the feds suck away will mean that much less for my heirs and those charities. I don’t feel compassion for or solidarity with those (or any) billionaires and can only shake my head at the sloppy ways that such laws are fashioned. There are always loopholes that smart lawyers and accountants can find. Maybe the threshold for estate taxation should be set at a far higher level than the case. The law as is only inspires creative ways to avoid the taxation. As a matter of principle, I do not think the government has any right to what the individual has saved and built through his lifetime.

    • As a matter of principle, the community absolutely has a right to some of what an individual has saved and built through his lifetime. You simply cannot discount the advantages that were given to you by the society in which you live. You have been given a lot. You owe a lot back.

      Furthermore, the property you have been given – by God, no matter how much work you put into it – has been given to you for the common good, not for your own benefit. The only reason it’s “private” is because we recognize that giving to each man care over his own estate is the best way of guarding the property so that it may be used for the common good.

      • Nordog6561

        “I am a democrat because I believe in the Fall of Man.

        “I think most people are democrats for the opposite reason. A great deal of democratic enthusiasm descends from the ideas of people like Rousseau, who believed in democracy because they thought mankind so wise and good that every one deserved a share in the government.

        “The danger of defending democracy on those grounds is that they’re not true. . . . I find that they’re not true without looking further than myself. I don’t deserve a share in governing a hen-roost. Much less a nation. . . .

        “The real reason for democracy is just the reverse. Mankind is so fallen that no man can be trusted with unchecked power over his fellows. Aristotle said that some people were only fit to be slaves. I do not contradict him. But I reject slavery because I see no men fit to be masters.”

        ~ C. S. Lewis

      • Faithr

        Thou shalt not steal. It is one of the big ten. I think right there we our basis in why we believe in private property; God assumes it right there in the 10 Commandments and he tells us it is a sin if we violate it. Of course taxes are as old as civilization, but some are just and some unjust. I know my taxes go to the defense of my country and a lot of other good things. They also goes for for a lot of bad stuff too that are morally wrong. The real question is who determines the common good? If you are an abortion loving, euthanasia pushing, same sex marriage supporting person who likes making drone attacks and backing terrorist groups, and you decide that’s for the common good, well, I don’t want you taking my money. I don’t agree with what you think is for the common good. Reasonable men may differ. You may think the welfare state is the best thing since sliced bread. I may disagree and think people need incentive to pull themselves up in the world. We are both thinking in terms of the common good – the best way for society to deal with things like poverty. This is one reason why a lot of folks like limited government, because governments, in case you hadn’t noticed, can do a lot of bad stuff for the ‘common good.’ My dh was just reading the Congressional Budget Office’s report on tax distribution (up to 2010) and something like the top 20% in income pay 96% of our taxes.

        • introvert_prof

          Do the analysis sometime. If the top 20% in income pay 96% of the taxes, it’s because they’re taking home somewhere north of 90% of the taxable income.

          • Dan F.

            not quite true. Here is some data (a bit old – 2008 but still relevant to the math):

            “Because average federal tax rates rise with income, the share of federal taxes paid by higher-income households exceeded their share of before-tax income, and the opposite was true for lower-income households. In 2009, households in the highest quintile received 50.8 percent of before-tax income and paid 67.9 percent of federal taxes; households in the top 1 percent received 13.4 percent of income and paid 22.3 percent of taxes (see Figure 2 on page 9). In all other quintiles, the share of federal taxes paid was smaller than the share of before-tax income: Households in the bottom quintile received 5.1 percent of income and paid 0.3 percent of taxes, and households in the middle quintile received 14.7 percent of income and paid 9.4 percent of taxes.”


            page 3.

            More importantly, I think that it is a drastic mistake to equate “Taxes paid” with “the common good”. I’m in the business of helping people with their estate planning (among other things) and while the techniques are complicated, the planning is not. You have 3 options as to where your estate is going to go when you pass away – either to your family, to charity, or to government. The question for most people is what portion of your assets (that have been taxed already on your income and then on your growth in most cases) do you want to be taxed yet again or would you rather those same dollars be used in a manner of your own choosing (i.e. give to charity). I can name, just off the top of my head easily a dozen charities just in CT that will make better use of those dollars than the federal government.

            Also, the analysis of how a GRAT works in the article is complete bunk and written to deliberately stoke the “1% vs. the rest of us narrative”.

            A quick edit – the article doesn’t mention that the beneficiaries of the ‘GRAT’ don’t receive a step-up in basis on the assets. This means that when they go to turn their now appreciated stock into cash (in order to use it) they will have to pay capital gains taxes on whatever the growth was (and since all they received was the growth, the entire amount is then taxable). This is still preferable to paying a 40% tax on the asset (since long-term capital gains tax is currently at 20%) but doesn’t mean they are receiving the asset tax free.

            • introvert_prof

              Thanks for the adjustment. My numbers are not quite right; the previous poster’s, to whom I was replying, was not either — the top 20% do not pay 96% of the taxes. If we look at the top 60% of income earners, they take in 85% of the national income and pay 96% of federal income taxes, That may have been the source of the 96% number.

              “Taxes paid” does not equate to “common good,” but any analysis of what we actually spend tax monies on says to me that either we are paying far too much to retirees and the military-industrial complex, or we need to raise taxes.

              • Dan F.

                I would vote for option 1.b of that either or. What we are paying to retirees is an issue but we could make some quick progress by addressing the second half of that “and”.

                Instead of raising taxes, I think we should eliminate corporate loopholes while reducing the corporate tax rate (such as the one that allowed GE to pay 0 tax on a $100Billion of profit). This would have the effect of getting the major corporations to actually pay taxes while reducing the burden on small(er) businesses (who usually end up paying closer to 35% on the profit) resulting in better competition and overall economic growth. The problem is that it is often difficult to get the congressmen(or women) from GE/GM/Goldman Sachs/etc. to vote to eliminate their own constituents loopholes.

                • introvert_prof

                  I’m not sure that a sole reliance on option 1b will do it, especially given that the arguments for not touching 1a are the same as those for not touching about 60% of 1b: we owe it to the people. That leaves option 2, since we could cut everything in the rest of the budget and not fix the deficit.

                  • Dan F.

                    I think that an elimination of much of the inefficiencies in the tax code would make a significant difference in terms of actual revenue generated by significantly growing the economy. Historically (post-income tax), the federal government has taken in about 18-19 % of GDP regardless of what the tax rates were which would suggest that if we need to increase government revenues (in terms of real dollars) the most effective way to do that would be to take actions that would improve the growth of the economy. Again, historically, that has come from a flattened and more efficient tax regime.

                    I think making the tax system more efficient could be done (using static economic numbers) “revenue neutral” but would result long-term in a more healthy economy and better government revenues. The major difficulty of course would be getting our various elected representatives to not spend those additional dollars on new programs or big expansions to current (and again inefficient) programs but to actually paying down our national debt.

                    Anyway, we’ve veered pretty far off course from the initial post/article

  • We should bar anyone who holds office from accumulating any more than a small amount of assets during his or her lifetime. If you hold any federal elected office at any time during your life, you get no loopholes. You are allowed to pass on only a small amount. Everything else, the government takes.

    • ivan_the_mad

      I rather like medians for elected officials. They ought to be paid no more than the median household income of their district, and own no more than the median net worth and assets of the same. Any excess can kindly be donated to balance their district’s budgets or be applied directly to social services. Time to get serious about the phrase public servant.

      • said she

        Yes! I’ve always thought that is how our elected officials’ incomes should be determined. Not only the elected! How about judges? And the city administrator, police chief, fire chief, school principal, etc. Basically any public servant who has a position of authority over a public service organization that is spending taxpaer’s dollars. And, of course, their underlings can’t be paid any more than that, either.

        Such a law would eliminate the gold-diggers, and encouarge every public servant to do what is economically best for their constituents. It might be a detriment to the poorer districts, unless there are some honestly good people – with the necessary skills – willing to work really cheap. Maybe none should be paid less than the median in the county (creating a lower limit)?

  • Elmwood

    100’s of Billions! Truly a festivus miracle.

  • Michael

    There should be no estate tax. My two cents.

  • Mark S. (not for Shea)

    All the Property that is necessary to a man is his natural Right, which none may justly deprive him of, but all Property superfluous to such Purposes is the property of the Public who, by their Laws have created it and who may, by other Laws dispose of it. –Benjamin Franklin

  • You wonder about the guy who got 15 years for $100. It seems like there must be more to the story. He is 54 years old but it does not talk about his record. Still it seems excessive if the man is really just stealing money for food. Most addicts would take at least enough to get high for a few days.