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As 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 reason.
To me this raises the question, why even have such a tax? If your sincere position is that it should really never be collected, and all. A tax which should never be collected I guess is therefore supposed to generate no revenue. But theoretically, the purpose of taxes is revenue. Ritholtz seems to have lost sight of that. I wonder why?
Is it good government policy to set up a tax that (a) apparently won’t be collected from people who aren’t ‘idiots’, but (b) will be collected from those who are? Is that what we want the government to do, go and grab wealth from ‘idiots’ but leave it in the hands of the savvy? Where ‘savvy’ means ‘jumped through a bunch of government-prescribed hoops’? Are we comfortable with a government that sets up a bunch of rules forcing you to be ‘savvy’ in various aspects of your life? How many aspects? Is there a limit? Wouldn’t it be better for all concerned if the government just, like, left us alone unless there were a really good reason?
Do we like hoops? Do we want more of them? Ritholtz seems to.
To get to the heart of the matter, the main effect of the tax, defended on these grounds, seems to be to incentivize the money-management industry. Sure, ‘idiots’ won’t use their services (and so, will get hit with the tax), but apparently everyone at slightly-above-idiot level is supposed to go use a fancy-pants money manager, paying him a bunch of fees to do a bunch of paperwork, ‘arrange’ their estate, set up ‘foundations’ or ‘trusts’ or some bullcrap (seriously, that shit is TOTAL BULLCRAP, why do we want to incentivize it?), and thereby shield their estate from this tax. So here’s the million-dollar question (literally): why on earth would Barry Ritholtz keep defending a tax whose main effect is to artificially-incentivize, to the point of practically making it mandatory, the pervasive use of money mana….by everyone with a lot of mon….
Oh. Oh. Oh, wait. Oh. Never mind.
UPDATE: See, Ritholtz explains, you can shield yourself from this tax with
Nothing cutting edge or daring, just put a few well-paid lawyers, accountants, and financial planners…
And of course, incentivizing the use of ‘well-paid lawyers, accountants, and financial planners’ is the very purpose of the tax code. So stop complaining, everyone! Your government has a job to do, and that job is, to make sure that lawyers, accountants, and financial planners are well-paid.
Er, for the people, of course.
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