Bruno and I had a (too) rare opportunity Wednesday to share a couple pitchers with a friend from Better Donkey.
After a few drinks, we got talking about ways to incentivize corporate owners to insist that their econo-baubbles take a long view on things like the economy. The problem being, as Bruno pointed out, that while corporations can theoretically exist for generations, people are naturally term-limited.
In that delicious glow that follows the second beer (but too often disappears after the third), we had a lightbulb moment. Ensure corporate owners take the long view by — gasp! — making sure that they are able to easily pass on their assets to subsequent generations.
And so we have the germ of a progressive argument for elimination of estate taxes.
To be honest, this is not an issue that much exercises me (largely because there are very few circumstances under which I can see myself needing to worry about the estate tax). The purpose of the estate tax, ultimately, is to ensure that wealth not get too concentrated in too few hands — it’s intended to solve the “first to market” problem that’s inherent in capitalism. But surely we can figure out other ways to redistribute wealth.
Discuss.
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I agree with you on the mortgage interest deduction. Either take it away, or let people deduct credit card interest, installment payments for their Ronco (“set it and forget it!”) rotisserie ovens, and other forms of debt payment….just like corporations can!
Of course, you will be able to directly connect the crash in the housing market to the party responsible for taking away the mortgage deduction, so I don’t think we’ll see that anytime soon from any elected official.
On the other hand (not to become a proponent of Shrub, mission 1), does it make sense to tax corporate profits and then tax them again when distributed to the owners? This whole 15% dividend tax is a real bullshit compromise. Keep the corporate tax rate where it is, and stop taxing dividends.
Amen.