‘Death elasticity’ and more scenes from the class war

CNBC’s John Carney discusses “death elasticity” in response to changes in the estate tax.

“Death elasticity,” Carney writes, “does not necessarily mean that greedy relatives are pulling the plug on the dying or forcing the sickly to extend their lives into a lower taxed period.”

“Not necessarily,” but apparently this happens. The rich really are different.

Carney says “death elasticity” in response to estate-tax changes is measurable:

Economists Wojciech Kopczuk of Columbia University and Joel Slemrod of the University of Michigan studied how mortality rates in the United States were changed by falling estate taxes. They note that while the evidence of “death elasticity” is “not overwhelming,” every $10,000 in available tax savings increases the chance of dying in the low-tax period by 1.6 percent. This is true both when taxes are falling, so that people are surviving longer to achieve the tax savings, and when they are rising, so that people are dying earlier, according to Kopczuk and Slemrod.

If I understand that correctly, “every $10,000 in available tax savings increases the chance of dying in the low-tax period by 1.6 percent” and thus every $10,000 in additional tax costs decreases the change of dying in the high-tax period by 1.6 percent.

So all we need to do is raise the estate tax by $625,000, and rich people will never die.

* * * * * * * * *

I only know what I hear on Fox News and what I hear on radio.”

“For Santorum and the conservative media, however, the question was not who would win or lose, but rather, how might they generate the most revenue.”

“I think when you define people who look differently than you as illegal aliens, and use that term over and over again, and talk about self-deporting them, that’s a tolerance issue.”

“Pardon me, madam, but I have been in your country of Australia for ten days and the only Aborigines I’ve seen have been drunk on the street, and at least if we were in my country they would be serving the drinks at this conference!”

“I’d still be leeching resources from a healthy body if I’d behaved myself.”

“The senators of the Mid-Atlantic did not vote against disaster relief for the Gulf Coast or for the people of Joplin, Missouri or for dealing with the Colorado wildfires or for flood victims along the Mississippi River.”

“If there are things we can do with the cheap money the world is flinging at us that would make the U.S. economy more competitive in the longer run, we should take advantage.”

The best plan for reducing the debt is full employment.”

“Come Dec. 31, Washington’s inaction could push the country’s milk prices to as much as $6 to $8 per gallon unless Congress passes a farm bill renewing federal support for agriculture programs.”

“The Senate version of the farm bill passed with relative ease over the summer, but House Republicans haven’t even brought a competing proposal to the floor for a vote.”

“As the defined benefit pension paradigm fades away, the natural and proper thing would be to rely more on Social Security as a vehicle for ensuring adequate living standards for senior citizens.”

“For 200 years the existence of the union movement has been wedded to the rise of democracy.”

“GiveDirectly remains an outlier in the development arena, perhaps the only organization that distributes private donations, made online, directly to the poor with no strings attached.”

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    Adam Smith had things to say about people being selective in condemning the evils of labor unions as a form of monopoly while failing to condem business monopolies or oligopolies.

    He also had good things to say about progressive income taxes.

    In short, he said a lot of things people like Chris Hadrick love to ignore in their simplistic belief that if things were set up just so then the world would be perfect.

    I find it unbelievable that the USA, which had a functioning inheritance tax regime for decades prior to 2001, and high marginal income tax rates on the wealthy at times in the past, is having such trouble conceptualizing that these things are possible today.

    The blame for that can be laid squarely at the feet of Ronald Reagan and people like Chris Hadrick who swallow uncritically fatuous loads of crap like: “I’m from the government and I’m here to solve your problem.”

    Reagan should have stuck with acting.

  • Consumer Unit 5012

     So we should burn all a person’s assets when they die?

    Of course not.  That would be silly. 

    Rich people need to be buried in a pyramid with all their worldly wealth and slaves, so they can continue to reign in the afterlife.  The rest of us will continue to be their serfs, in accordance with the Divine Plan.  :-P

  • Consumer Unit 5012

     Reagan should have stuck with acting.

    He did.

  • Tricksterson

    Tell that to Walt Disney ;D

  • http://blog.trenchcoatsoft.com Ross

     

    Ellie= I get the argument for the estate tax, that junior should make
    his own fortune, but  I think the money belongs to the person who earned
    it and simply transferring it to another person is not a logical thing
    to tax.

    I am not entirely unsympathetic to this argument. That said, “simply transferring [money] to another person” is how all taxes work.

  • Tricksterson

    Or their family could throw a massive http://en.wikipedia.org/wiki/Potlatch Potlatch

  • Mark Z.

    So we should burn all a person’s assets when they die?

    Build a pyramid!

  • Mark Z.

     You bastard, you beat me to it.

  • EllieMurasaki

    According to the hawk god Horus, our most regal invalid is not that much longer for us–build another pyramid! He must have a vault that’s grand by any standards, floor to lid–put five thousand slaves on standby! Build another pyramid!

  • http://twitter.com/FearlessSon FearlessSon

    See, I tend to think of all my money as already belonging to the government.  They printed it, and they are the ones backing up its value.  To the extent that the money is “mine” it is because they trust me to shuffle it around to other actors in the systems, occasionally removing a percentage (while trusting me with the rest) to shuffle it around on orders of scale I could never manage as an individual.  I am more like someone who rent’s the government’s service.  The accommodations are “mine” but only at the sufferance of the party from which I am receiving service.  

    “All the worlds’ an MMO, and all the men and women merely players.”  

  • http://lliira.dreamwidth.org/ Lliira

    Y’all? Why are you bothering to argue with a rah rah capitalist who claims “Carnegie was wrong and so was Adam Smith”?

    I’m not saying you shouldn’t do it. But I don’t really understand the point. This is how every thread Chris Hadrick posts in goes: they all become entirely about the extremely weird stuff Chris Hadrick says. 

  • BaseDeltaZero

    Exactly.

  • http://lliira.dreamwidth.org/ Lliira

    Nah. MMORPGSs actually work on largely objectivist terms. The more you put in, the more you get out. No one is disabled or sick or too old or too young to get rich. Everyone has the natural ability to smack around dragons so long as they’ve practiced enough. Heck, no one even dies permanently. Everyone pays you what they promised to pay you. No one needs money to pay the rent — well, in EQ2 you do (last I knew), but it’s a tiny amount of your income. If you lose your home, it’s because you didn’t bother to play the game, and you can get it back merely by playing the game a bit.

    I never give any money to (player character) beggars in MMORPGSs, ever. I always charge the most I possibly can and still sell the items at auction houses, and get annoyed with people who do not. It’s fun to play in a fantasy where what I get really does equal what I put in. I don’t think anything in the real world works that way.

  • Lori

     

    That said, “simply transferring [money] to another person” is how all taxes work.   

    This is a fact which a surprising number of estate tax haters fail to grasp. There’s no “onesie” rule on taxation and the estate tax is not “doubling dipping”. I have known more than one otherwise intelligent person who was totally unable to wrap their head around this, so it’s not really a surprise that someone whose thinking is a generally muddled as Chris Hadrick’s is can’t get it.

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    Like I said above, I think it really is pot-of-gold fantasyland thinking and harshing their buzz.

  • Carstonio

    I might be showing my age (mid-40s) when I say that my usual comparison of that ideology is not to RPGs but to Monopoly. 

  • http://lliira.dreamwidth.org/ Lliira

    But in Monopoly, the banker always cheats (in my experience), and you are dependent on luck for getting good die rolls. Skill and guile also have something to do with it.

    MMORPGs reward time expended. And that is IT. While if you have a certain skill set, you may be able to get certain shinies before others can, those others can get the exact same shinies eventually too.

  • Lori

    Yes, I guess so. I knew one otherwise intelligent person who actually
    believed that people were losing family businesses and farms because of
    the estate tax. She was sure that her family was going to have to sell
    her grandmother’s house to pay the taxes when she died.

    First I pointed out that even with the real estate boom it was highly unlikely that her grandmother’s house was worth enough to create an onerous tax burden. I then pointed out that very few actual family businesses or farms are effected by the estate tax at all and that for those that are the proximate cause of any losses is not the estate tax but a criminally stupid failure to do basic estate planning. She just looked at me like I was speaking Urdu or something.

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    Funny you mention time spent… at one point ISTR the Canadian or US militaries would promote on a very strict X number of years schedule. So you put in your 20 years and you pretty much automatically got your retirement and military pension at the rank of Colonel or summat.

    (Talk about being socialist! :P )

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    For Chris Hadrick:

    Some taxes and fees are going up in BC and in Canada.

    Newsflash: We are not seeing a totally dysfunctional government full of jerks who can’t countenance the possibility lest they hold a mass faint-a-thon in the legislature.

    Some provincial marginal tax rates are going up for the richest.

    SHOCK OMG….er, no. The sky hasn’t fallen in.

    Chris Hadrick, I mean it in all seriousness when I say that you and your ilk are  like fucking five-year-old kids having a squalling temper tantrum because you’re not getting your way on taxes. Why someone hasn’t taken the collective you across the knee and given you a smack on the ass is beyond me.

  • PatBannon

    Not exactly. Some MMORPGs reward effort expended at a certain time. In World of WarCraft, many expansions ago, there was an event called the Opening of the Gates of Ahn’Qiraj, and people who were there at that specific time were able to get a special item. If you were not there at that specific time, no amount of time expended would ever get you that item. You couldn’t even get it from someone else who had it, items like this are “soulbound” (cannot be traded). That’s just one example of many.

  • EdinburghEye

    Chris: I get the argument for the estate tax, that junior should make his own
    fortune, but  I think the money belongs to the person who earned it and
    simply transferring it to another person is not a logical thing to tax.

    It is perfectly logical: it avoids setting up a permanent oligarchical aristocracy.

    I don’t see something being “good for society” as a reason to force
    someone to do it.  Respecting peoples private property is better for
    society.

    Estate tax is not in any way intrusive on “private property”. A dead person owns no property. The estate is taxed before it becomes someone else’s private property.

    I am, however, fairly convinced that the kind of person who objects to all taxes is the kind of libertarian who would only really be happy in a medieval state where he could be king of it: and a king generally has no objection to setting up an aristocracy to be his support in his monarchy.

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    I think it was Asimov who quipped that all the people who moon over the pastoral era of the Middle Ages forget the fact that there is a 90% chance they’d wind up as a serf or a lowly guild apprentice rather than as some kind of manorial lord.

    I think he was particularly sensitized to that because his ancestry goes back to Eastern European Jews, who were not exactly welcomed in that era.

    Libertarians seem to have a similar blind spot.

  • http://lliira.dreamwidth.org/ Lliira

    Yes, sometimes you have to be in the right place at the right time. And sometimes the psuedo-random number generator seems to hate you. But nothing like that makes the game easier to play in the long run; and “in the long run” means a couple months in this kind of game.

    I played WoW from pre-Burning Crusade until early-mid Cataclysm, with a break during the lull of WotLK. Before and during the lull, I played EQ2. I’ve played Rift and Lord of the Rings online (both good), and am now playing Star Wars: ToR (Bioware, I hate you as much as I love you). So… yeah. Lots of experience with this stuff. Lots of experience with purples I expended tons of time getting being worthless once an expansion pack came out. Lots of experience with “HOW much time did I just spend to get this shiny/help others get the shiny/listening to other people being yelled at in order to get shinies?” Enough that I’ve decided not to ever join a raiding guild again.

    And the great thing about it is, I don’t have to. I won’t starve if I don’t join a raiding guild in-game. No one will be hurt. I can just keep bopping along, making money my own way, roleplaying with my husband (I also will not join another roleplaying guild as the way 95% of people in these games roleplay makes my teeth hurt), doing quests, having fun with the story, writing my own headcanon fanfic, working for stuff that looks neat rather than worrying about its stats, etc. No drudgery necessary. Such wonderful escapism.

  • http://lliira.dreamwidth.org/ Lliira

    a king generally has no objection to setting up an aristocracy to be his support in his monarchy

    Historically speaking, monarchies and their aristocracies, in Europe at least, do not get along very well. The smart monarchs make common cause with the people against the aristocracy, while treating the aristocracy with a certain amount of respect because that’s the way society works. But the monarchy and the aristocracy are natural enemies. 

    The people expected monarchs to protect them against their local aristocrats. The crown’s law being above the local aristocrat’s law was a hard-fought battle. When the monarchs instead were seen by the people as taking the aristocracy’s side, it often ended in said monarchs losing their thrones and, in a certain memorable case, their heads.

  • EllieMurasaki

    Pretty sure Asimov was one of the people who said that. Dunno if he was the first. And I wish I could remember where to find the study to the effect of, ask people to design an ideal society, the results track the designers’ political views, but ask the same people to design an ideal society where their place in it is assigned at random, the results are much more equitable.

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    I know Rawls is famous for his “Veil of Ignorance” construct which leads to people naturally proposing a welfare state and other such protections because they have no prior knowledge of what their station in life will be.

  • http://blog.trenchcoatsoft.com Ross

    I think the people involved would reject Asimov’s observation — they believe that there is some skill involved in being the lord rather than a serf, and that it is the very qualities which make them moon over the middle ages that would have made them rise to the top in the feudal system.

    They don’t believe that there’s a 90% chance of “anyone” being a serf –they believe that 90% of people are fit only to be serfs, and that they are in the remaining 10%

  • EllieMurasaki

    Which boils down to patting themselves on the back for having the wisdom to choose the right parents.

  • Lori

    There was skill involved in being a good lord, but skill had very little to do with becoming a lord or remaining one. People didn’t do much “rising to the top” in a feudal system. People weren’t serfs because they were unfit for anything else, they were serfs because their parents were serfs.

    This is a libertarian blind spot.

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    I’ve also heard the IRS is very accommodative of payment plans on estate taxes, as well.

  • http://blog.trenchcoatsoft.com Ross

    I did have a libertarian friend years back who claimed that all people were poor because of laziness, but that “sometimes it’s the inherited laziness of their ancestors.” He went on to explain that if, as he believed, it was normal and proper for a child to inherit the benefits of their parents’ hard work, it was also fitting and proper for them to inherit the disadvantages of their parents’ laziness.

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    Did he read too much Lamarck, or something?

  • EllieMurasaki

    *headdesk*

  • Lori

    The IRS, for all that people loath them, is actually pretty accommodative on payment plans for most people who don’t owe because they were actively trying to cheat on their taxes. (The problem with the IRS isn’t that they treat most people badly, it’s that they treat some innocent people unbelievably badly and once they turn on you it’s really hard to escape.)

  • Lori

    Gawd, some people are such assholes.

  • hidden_urchin

    SHOCK OMG….er, no. The sky hasn’t fallen in.

    Really?  Really? 

    If that’s true then what is this, eh?  We’re onto you, Invisible Neutrino.  Look at the video: the sky is all over the ground.

    (I’m just teasing you a bit.  The last time we had snow down here I completely forgot what to call it and settled on “that white stuff falling from the sky.”  I hope all y’all stay safe up there now that winter’s really kicking in.)

  • AnonymousSam

    Only the huge ones.

  • Carstonio

    I mean that the Just World folks imagine that real life operates like Monopoly, conveniently leaving out the role of luck. 

  • EllieMurasaki

    Or the ‘if you give/sell me Park Place to go with my Boardwalk and my green trio, you’ll never have to pay rent on a green or blue property’ factor. Good for the person who thereby escapes rent on the most expensive side of the board. Better for the person who owns that side of the board. Sucks ass for all the other players.

  • PatBannon

    There we are in agreement. I made the same decision to stop joining raiding guilds about a year before I finally quit MMOs proper, both for lack of time and, well, for this.

    http://penny-arcade.com/comic/2012/12/05

    The ability to just do whatever the hell you want and do as well for yourself as the people who treat it like a job is a signature feature of MMOs’ escapism, I think you hit the nail on the head there. I remember, for a period of three weeks or so, I had the market on Mithril Bars cornered on an entire World of Warcraft server. I would stalk the AH, and I even had two minions helping me, buying up all the Mithril as fast as people would put it on and relisting it at my vastly higher prices. There was a ton of complaint, and people personally trading it back and forth in front of me to spite me, but I successfully screwed the market for the most part and made an enormous profit.

    But…I didn’t cause anyone to lose their job.* I didn’t take money out of starving people’s pockets. I didn’t cause sick people  not to get medicine. Sure, I crashed an economy and laughed at the wreckage from atop of the huge pile of money I made from it, but, y’know, it was virtual. I wasn’t actually hurting anyone. It’s a great way to get out those kinds of urges.

    * Maybe some Chinese gold farmers, now that I think about it. But I doubt it, it wasn’t a major server.

  • EllieMurasaki

    Though the economy does seem, in one crucial respect, to be like playing Monopoly with my kid brother (until several years ago when he finally grew out of this). If it started looking like there wasn’t any way he could win, he’d overturn the board. Which is exactly what the whole debt-ceiling fiscal-cliff crisis is: certain players aren’t winning (for given values of ‘winning’), so they don’t want anyone to be able to play.

  • Turcano

    Feh, going for the blue properties is a sucker’s game.  The ones you really want are the orange and red properties.  And buy as many houses as you can, but don’t buy hotels, which prevents the houses from going back into circulation and allowing other players to develop.

  • http://www.aqualgidus.org/ Michael Chui

    The correct analogy isn’t kingship, as Lliira pointed out. It’s a cult with a leader and an inner circle. The main reason they haven’t formed cults is largely a lack of ideas and a lack of charisma.

    …and apparently logging in means that the Reply link doesn’t hook up. Bah.

  • http://twitter.com/lesterhalfjr Chris Hadrick

    Wendy- the railroads were massively overbuilt as a result of subsidies. People loved being able to travel there was no reason for Washington to get involved at all.  they sold themselves, like crack

    cminus -I meant he was wrong on that issue. Obviously I believe he was correct in the general. i’m fine for taxing people for what they use. gas tax i have no problem with it pays for roads. income tax is wrong.  1913 : begining of income tax and federal reserve system. dumb year. 

    I’m not an objectivist just fyi.  I ‘ve never read Ayn Rand. I watch CNBC and read “Defending the Undefendable” and Mises and stuff like that.  

    “The blame for that can be laid squarely at the feet of Ronald Reagan and people like Chris Hadrick”

    I accept the blame  http://www.youtube.com/watch?v=qGwp-9mCKC0

    The Estate tax is morbid. “We’re very sorry for your loss, can we have our share of the money now?” .  Is it so important to squeeze every last drop out of the population?

  • EllieMurasaki

    Do you want to levy individual taxes for education, police protection, military, anti-poverty programs, national parks, inspecting your goddamn fucking chicken to ensure it contains no goddamn fucking chicken shit–
    Wait, I’m talking to Chris Hadrick. There’s got to be more productive ways to spend New Year’s.

  • Lori

     

    The Estate tax is morbid. “We’re very sorry for your loss, can we have
    our share of the money now?” .  Is it so important to squeeze every last
    drop out of the population?   

    This is quite possibly the most ridiculous statement that I’ve ever seen about the estate tax, and that’s saying something.

    You’re touching concern for the poor delicate feelings of the deceased wealthy is terribly touching, especially couple with your total lack of concern for the living non-wealthy.

  • P J Evans

    Do you have actual sources for your assertions, or are you pulling them off some Libertarian/Randian site somewhere?

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    The Estate tax is morbid. “We’re very sorry for your loss, can we have
    our share of the money now?” .  Is it so important to squeeze every last
    drop out of the population?

    You…. do know that the estate transfer tax doesn’t even touch the majority of people?

    What part of “the first $5,000,000 (5 million) of an estate is not taxed” do you not understand?

  • http://twitter.com/lesterhalfjr Chris Hadrick

    Ellie- It would be a good way to insure the money is actually spent on those things instead of diverted to military and weird subsidies.  

    PJ- http://www.youtube.com/watch?v=Pi1UbezqYII 


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