By now, you must have heard about Tom Perkins’ letter to the Wall Street Journal (Progressive Kristallnacht Coming?), where he made a foolish comparison to the “parallels of fascist Nazi Germany to its war on its ‘one percent,’ namely its Jews, to the progressive war on the American one percent, namely the ‘rich.’ ”

The PR disaster Perkins ignited – yeah, he is that Perkins from venture capital firm Kleiner Perkins – ignited a firestorm. The reaction was so intense he had to go on Bloomberg TV to sort of, but not quite, apologize. In the course of his comments, he said something several other really dumb things (you may be detecting a pattern here) on unrelated subjects.

But the thing which really stood out to me was his plea for lower taxes. Perkins said: “Upon my death the government will take 45%” of my estate.

To which I am compelled to respond: Only if you are an idiot.

Or, perhaps, if you were on the way to your lawyer’s office when you got hit by a bus, and died intestate (without a will), then that makes sense as well. Short of those things occurring, no one in America actually pays 45% in estate taxes. It is simply too easy to avoid paying estate taxes.

Continues here


Category: Investing, Taxes and Policy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

20 Responses to “Who Pays a 45% Estate Tax? Idiots Do.”

  1. wally says:

    There is a sound reason why, in nature, all species use a system where individuals die as the species goes on. It insures that one individual will not come to dominate the species and then do something stupid, such as failing to adapt to the changing world, and thus wipe the whole thing out.
    The same concept applies in human spheres such as economics, politics and business. Mr. Perkins’ estate ought to be taxed at about 90 percent.

  2. [...] he has before, Barry Ritholtz is still defending the estate tax on the grounds that no one pays it except ‘idiots’. I guess he just feels really really strongly about this issue for some [...]

  3. ComradeAnon says:

    He must be using Phil Mickelson’s tax planner.

  4. Wally is absolutely correct!

    Dynastic wealth accumulation is a recurring cancer in human civilization.

    Sooner-or-later… if the species is to survive… we’ll pay attention to the scaling problem in human societies.

    Issues in Scaling Civilization: The Altruism Dilemma

    The rich will never be able to adequately represent the poor over the life of a civilization. Though ironically they may need to serve that purpose to begin a civilization. While I understand many won’t agree… I consider this not a philosophic or political opinion… but rather an objective fact based on problems arising with scale.

    America came closer than most to solving the problem. But all solutions may be temporary with changing circumstances. We can always hope there will be something to shift the balance.

    Characteristics of the Monied “Like” Button

  5. BennyProfane says:

    He’s older, but, I find it worrisome that the smartest kids today have and are going to make their livings in the den of thieves that the financial industry is, and the other planet that Silicon Valley has become. This guy, and others like Marc Andreessen, are the lucrative intersection of both, and probably looked up to in the Valley. I fear for our political future when the smart nerds walk down this path. Hell, some have talked about separating themselves from our society physically and politically. Apple’s offshore cash hoard is certainly a start. Snap back will be a bitch if they continue in this direction. We already have a ton of educated kids out of work. Idle hands…………

  6. farmera1 says:

    Whenever I think about estate taxes and dynastic wealth there is no better example than the Walton’s, yes the family of Wal-Mart founder Sam. The four Walton children are among the top ten wealthiest people in the world. And just exactly what did they do to earn that wealth, not sure but I can believe they are wealthy because of the luck of birth, nothing else and oh yes they are huge drain on society, forcing many of their hundreds of thousands of employees into welfare. So these people might think of themselves as job creators but in reality they are welfare exploiters and producers of poor people in the US but they have made lots of money for the Chinese manufactures.

    Ranking Net Worth Source
    6. Christy Walton $35,400,000,000 Wal-Mart
    7. Jim Walton $33,800,000,000 Wal-Mart
    8. Alice Walton $33,500,000,000 Wal-Mart
    9. S Robson Walton $33,300,000,000 Wal-Mart

  7. WFTA says:

    The top 1% earned 20% of the $13 trillions earned by all Americans last year or approximately $2.6 trillions. If we increased their federal income tax by 10% we would gain $260 billions for public purposes (my personal preference would see it spent for infrastructure investment, both for its immediate impact on jobs and consumption and its long term benefits for industry and agriculture.)

    The top 1% would still be the top 1% and would still have more money than they can shake a stick at. The country would be much better off.

    So when I hear politicians and pundits saying that taxing the rich can’t make a significant difference in improving our future, I conclude that they are either liars or idiots or both.

  8. WFTA says:

    Sorry. That was not addressing estate taxes, but wealth inequality is probably greater than income inequality. So I would favor capturing more from estate taxes also.

  9. DeDude says:

    Does anybody really deserve something they did not create by their own effort? What exactly is the moral argument for allowing inherited wealth?

    • TerryC says:

      So if your parents built up a farm, ranch or small business worth, say $10 million, when they die you and your brothers and sisters don’t deserve any of it, and it is OK for the government to take it all from you? I think you are living in the wrong country. At the end of Fiddler on the Roof, the Russian government (of the Czar) comes in, kicks all the Jews out of their homes they have built up, and takes the village away from them.

      This sounds like a much more reasonable moral argument to me. Work hard and die so the government can take it all from you.

      • This is a very different debate than the one I was having

      • ComradeAnon says:

        Well, you certainly have no legal right to it. But let’s tie children to their parent’s financial situation. Say those same parents left behind debt totaling $10 million. You’re happy to take that on?

      • As you know, the debt dies with the debtor . . .

      • Wade says:

        Hi, Terry.
        Please consider this:
        If the amount that a person can inherit from their family is reduced, that family might have an incentive to support policies which allow their kids (and, incidentally, other kids) to get rich on their own merits. The family would also have an incentive to ensure that their own kids were actually productive. The country would benefit by rewarding people who work hard and who have talent, rather than accidental or contrived associations. The kids would benefit by knowing that they made it, not because they inherited, but because they worked hard.
        Many people would like to simply be given a pile of money, but these are not people you would want to associate with.
        A man who inherits a business may be the best company president in the world, but he’ll never be sure if he’s the best, because he was never given a chance to prove it. That’s the real reason most companies have policies against nepotism. It is corrosive to the individuals and to the organization. Inheritance is similarly corrosive to the principle of rewarding productive work.

      • DeDude says:

        I don’t believe in inherited aristocracy; economic or otherwise. Your place in society should not be determined by how lucky you were with who gave birth to you, but rather by how much effort you have put into creating something. Trust fund babies are useless leaches on a society and they need to get their lazy but in gear and earn a living – that would be good for them and good for society. They just need a good incentive like a lack of ability to just live of rent-seeking.

  10. 4whatitsworth says:

    This is how the United States political system functions. Create a law that where people can make any statement they want from it.. If you are a republican “I am taxed all the time even at death bla bla” if you’re a democrat “Rich people never pay their fair share because of all the loop holes blab bla blab”. Then we all argue of a bunch on nonsense I am so freaking tired of all the hypocrisy.

  11. Skriz says:

    Here is my reaction to conservatives, who think the estate tax is so “unfair” – If you are such strong believers in the “free market system” and so convinced that we live in a meritocracy, let’s set the estate tax at 100%! Then, we will see how well spoiled rich brats like Paris Hilton, Steve Forbes and George W. Bush do when they start their lives poor. I’ll bet George W. Bush would still be pumping gas at a Texaco station in Midland, Texas!

  12. James Shannon says:

    Extreme wealth is the cause of ALL corruption.
    Tax ALL Income and Net Worth above $10,000,000 at 100% and we won’t have to deal with these arrogant narcissists who clearly have contempt for all who are not RICH. Ultra High Net Worth individuals really do believe they deserve what they have because they are better than everyone else in every way possible. The greedy take and they do not share and they won’t be taxed. The rest of us can eat shit and die as far as the RICH are concerned.
    Something that should be painfully clear to even a retard!

  13. supercorm says:

    Maybe idiots pay estate tax, but only fools think they’ll live forever.