The Instigator
Advocate123
Pro (for)
Winning
61 Points
The Contender
MoonDragon613
Con (against)
Losing
15 Points

The Estate Tax Should Be Abolished.

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Voting Style: Open Point System: 7 Point
Started: 2/10/2008 Category: Politics
Updated: 9 years ago Status: Voting Period
Viewed: 4,495 times Debate No: 2531
Debate Rounds (2)
Comments (29)
Votes (24)

 

Advocate123

Pro

PLEASE READ THIS BEFORE YOU VOTE.

The Estate Tax is a tax at the point of a person's death when the person's assets are transferred to family members. It should be abolished for the following reasons:

1) If someone owns a family business and dies, that family business will be transferred to family members. However, at the point of the transfer, the government taxes the assets at close to 50%. Like most small family businesses, they do not have half of their assets in cash. This has the result of the family having to sell the family business, fire all the workers who were formerly employed, and use the proceeds to pay the tax. No reasonable person could possible want this to happen;

2) Many people work hard even in the last few years of their life with the hope of passing what they earned to their loved ones. This has the effect of consoling those who are often left with a huge financial loss if the "breadwinner" dies;

3) The only argument against the Estate Tax is that rich people can give a ton of money to their little rich kids. The truth is that this is the exception to the rule. Reducing the number of Paris Hiltons in the world is not worth the number of family-owned businesses destroyed by the Estate Tax.
MoonDragon613

Con

Its good you know what the Estate Tax is meant to do. Which makes this much simpler. There are two reasons why the Estate Tax should be preserved, if not increased.

1) The Estate Tax does not apply universally
2) It is critical to the health and success of Democracy

1) Despite your alarming statements warning of the horrible estate tax which destroys small business everywhere, the Estate tax only applies when someone tries to pass on an estate of something around 4 or 5 million dollar net worth. So no, the Estate tax does not wreck small business nationwide. Secondly, the Estate tax does not apply to the passing of property from husband to wife. (this also nullifies your second point about the "breadwinner") So once again, if someone dies, the business does not necessarily get taxed. And third, it does not apply to corporations. Corporations do not have to be publicly traded or engage in multi million dollar transactions. Any two or three individuals can establish a corporation wherefore the estate tax no longer applies. So small business would only have to incorporate.

2) Even if the estate tax wrecks a few small businesses, the vitality of a democracy depends heavily on the estate tax. If there was no estate tax, wealth stays within the family. Nothing generates money quite like money and without an estate tax, after a few generations, we would begin having dynasties. Wealthy families that last for generations will necessarily exert undue and tremendous influence on the government. This then transforms America slowly from a democracy into an oligarchy of a few rich families that marry to unite wealth which then remains in the family. Only by redistributing tremendous amounts of their vast wealth could we ensure some kind of equality and maintain the equilibrium of power.
Debate Round No. 1
Advocate123

Pro

You made this too easy, and you even invented facts along the way.

1) You argument that estates that pass from husband to the wife are not taxed is baseless because when the wife dies, the estate is taxed. It will always get taxed eventually no matter what. But, many states have elective shares where a spouse does not get the entire estate, and some passes to the children, which would be covered under the Estate tax. And who is to say that the wife didn't start the business and left it to the husband?;

2) Moreover, the money of the estate was already taxed when it was earned because it was once income. Think about it. If you earned $80,000 a year, you paid tax on it on April 15th. Then when you die, why should the government tax it again?;

3) Your argument that the Estate Tax only covers people who own estates at 4 million dollars or higher is just incorrect. You lose total credibility when you just make statistics up to suit your argument. The following chart demonstrates the exclusion rate (everything above this is taxed), and the rate for that amount.

Year Exclusion Top rate
2001 $675,000 55%
2002 $1,000,000 50%
2003 $1,000,000 49%
2004 $1,500,000 48%
2005 $1,500,000 47%
2006 $2,000,000 46%
2007 $2,000,000 45%
2008 $2,000,000 45%
2009 $3,500,000 45%

The fact of the matter is that even modest businesses that make very small profits often are worth well over 2 million dollars if it hires more than 20 people. If there isn't cash on hand, the family then needs to take out a massive loan in the millions of dollars just to keep the business going to pay the tax, or like I said, they fire the workforce, which is more likely.

What is the saddest thing of all is that the longer the business has been in existence, the greater the chance it will be destroyed by the estate tax, and the greater the chance that more people will be fired. Large family businesses also help the local community, and the death of one person should not cause this absurd result of massive layoffs;

4) The Estate Tax certainly does apply to corporations. You again are just making up facts! If a family owned all the shares of the company, or are a majority shareholder, the total value of the shares are calculated as assets and are taxed. This means the shares of the company must be sold, leading to liquidation of the company;

5) Your statement that a few small businesses should be destroyed to save democracy is absurd on its face. Small businesses make up the fabric of this Country. In fact, the problem is much more common then you give credit (actually, you just made up facts). Your hatred of people keeping wealth in the family does not justify this at all.

Overall, not only are you just wrong, but I pointed out two instances where you just made up fact: 1) The exclusion rate on the estate tax; 2) You stated that if a family owns stock in a non-publicly traded entity it would be immune from the Estate tax. That is just wrong, destroying all credibility you had when you entered the debate.

If I may paraphrase your argument: The Estate Tax is good for Democracy. But, you did nothing whatsoever to demonstrate that. In fact, you dug your own grave.
MoonDragon613

Con

Love a contentious debater. None of that "thank you for taking this debate" garbage. And about my "making up facts", you wish.

Let's begin with my second unchallenged argument:
The Estate Tax is vital for democracy.
"after a few generations, we would begin having dynasties"
"wealthy families that last for generations will necessarily exert undue and tremendous influence on the government."
Clearly my explanation was not transparent enough for you. And out of the generosity of my heart, I'm willing to indulge the vacuum that is your mind and go at it again.

Let's imagine a number of families that are exceptionally wealthy. And then let's imagine there is no estate tax. What happens to the wealth? Well basically it stays within that family. Over the course of generations, WITHOUT THE ESTATE TAX, WEALTH INCREASE. The family grows more wealthy and more powerful. The increased political clout of course results in again more wealth and more political influence.

America being one of the countries with a relatively low Estate tax (for a Western Democracy and I dare you to claim I made this up) already has the beginnings of Oligarchy for example the Bush Family. You would think the ramifications of wholesale family transfer of wealth over generations would be obvious, but since it is not (to you) I tried to make it more obvious. Hope it helps.

Now as to the so called detrimental effects of the estate tax (the one where I supposedly made up figures):
1. The Estate Tax only applies to estates of $4 Million for couples according to the almighty Wikipedia. (I <3 Wiki)
2. Corporations allow you to escape the Estate Tax because unlike sole proprietorships, you can legally and gradually transfer ownership through the transfer of shares while still alive.
3. Don't give me "the fabric of this Country" BS. They are not the "fabric" of this country. It's a stupid phrase with all these pleasant connotations without any serious underpinnings. Calling it "the fabric of this country" is basically making nice sounding phrases to support an empty point
4. If you think the Estate Tax is too onerous then the appropriate solution is to raise the minimum point to estates of 8 or 9 million and raising the amount taxed to compensate. Not the wholesale elimination.

I hope you paid especially close attention to 4. Your entire argument, digested, is advocating estate tax reform to exempt small businesses and farmers. Not one argument you've made so far could better be applied to estate tax elimination than to estate tax reform.
Debate Round No. 2
29 comments have been posted on this debate. Showing 1 through 10 records.
Posted by HandsOff 9 years ago
HandsOff
Moondragon,
We don't get eachother. I'll let Advocate handle this. It looks like he's doing a pretty good job with you.
Posted by Advocate123 9 years ago
Advocate123
1) I cited the deductions as clear as day;

2) You made up the facts about corporation shares not being subject to the Estate tax;

3) You clearly have never seen the balance sheet of a company have you? Many are worth close to 20 million;

4) The income is already taxed and now you want to tax it again.
Posted by MoonDragon613 9 years ago
MoonDragon613
1. I cited Wikipedia because it correctly states the necessary size of the estate before it is subject to the death tax. I also pointed out how ultimately it is IRRELEVANT since if your issue is with the size of the estate, the solution is to modify the estate tax to require larger estates.

2. Wikipedia is not wrong because it is Wikipedia. There is no source inherently wrong because it is a source. Only when there are different sources providing different figures on a material fact can you then make an argument such as Wikipedia is not the most reliable source because due to the sheer quantity of entries the moderators of Wikipedia do not have the resources to ensure the authority of all sources cited.
Posted by dloughlin 9 years ago
dloughlin
MoonDrager lost my support when he/she cites Wikipedia as an authoritative source; Advocate cites the correct numbers from reliable sources. IMHO, the Death Tax is pure and simple wealth redistribution – take from those that have worked hard to build a legacy and give it to those that have not.
Posted by Advocate123 9 years ago
Advocate123
You state without providing any justification that your arguments are rational.

Moreover, FDR's social welfare programs by all objective standards prolonged the great depression, and the Federal Reserve "Big Government" created the great depression in the first place.

Lastly, the fact that the police failed in certain instances is not an argument against it.

You really are terrible at making arguments.
Posted by MoonDragon613 9 years ago
MoonDragon613
To Handsoff:
My point is (if you once again bothered to read the post before responding) is that the slippery slope argument used by Advocate123 could just as easily be used in reverse. Certainly freedom is a good thing, and so is safety. The key is to strike a good balance point, not to discard one for another entirely. Thus the slippery slope argument is retarded and the only people who would use it would be idiots or anarchists or people who don't care to use rational arguments.

To Advoate123:
"The government's job is to protect individual liberty."
Sometimes (usually) you are just truly blind. Ever heard of the Shay's Rebellion? And why do you think FDR established all these social welfare policies during the Great Depression? I love how you assume the simplest method "to protect people from physical force between the citizenry" is a police force. If that was so, how did the revolution in Iran take place? Wasn't the police force there to protect people from physical force between the citizenry? In times of tremendous imbalance or too large of distinctions in social stratum, it becomes MORE DIFFICULT to keep peace. (Definitely need a general debate on social government policies). Apparently your solution for keeping peace is to smash the discontent with the military and the police force while I advocate a combination of the social welfare to keep the citizenry mildly content and of course a police force.
Posted by HandsOff 9 years ago
HandsOff
MD,
Sorry, this last post was for comments on our debate "Welfare plays a positive role in America."
Posted by HandsOff 9 years ago
HandsOff
Moondrag,
You got me. I hardly fit into the catagory of republiican. It's just the best realistic avenue for libertarian ideas to actually become policy. We've had to band together with the religious right and the neo-cons just to get some stage time. It's because we are so outnumbered by the masses who vote to take the easy way out.

The ideas you back are very popular, as they should be. It is tempting for society to live off the work of others and to freely spend the money of others. Popularity is the key to politics in a democracy. You guys are doing a great job. You will soon be in complete control. I've always said that.
Posted by HandsOff 9 years ago
HandsOff
Moondragon,
Would you say that Advocate's comments about limiting government to a minor role make him an anarchist? I'll admit, socialism is probably better than pure anarchy. But minimal government involvement by which freedoms are not trampled is best for the individual. The affects of minimal government on society as a whole happen to be good, but those affects are incidental and secondary to the principle of preserving one's liberties.
Posted by Advocate123 9 years ago
Advocate123
Noam Chomsky and Howard Zinn are Anarchists. No conservative/ libertarian are looking for what they want.

The government's job is to protect individual liberty. This requires a military to protect the country from outside forces, a police force to protect people from physical force between the citizenry, and courts of law to enforce contracts and provide people with due process.

When the government steps out of that role, it ends up destroying the individual liberty of a select minority at the expense of the majority.

By the way, it is really sad that you do not even understand the purpose of the Right to bare arms.
24 votes have been placed for this debate. Showing 1 through 10 records.
Vote Placed by dylancatlow 4 years ago
dylancatlow
Advocate123MoonDragon613Tied
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Reasons for voting decision: Con was a brat and made no actual arguments except for the fact that taxes are good in general.
Vote Placed by TonyX311 9 years ago
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