Death Tax, Paying for What You Use, Comment Foolishness

There was some pushback on yesterday’s rather tame suggestion that the U.S. properly finance the fund that pays to maintain and repair our roads. Much of the correspondence was surprising. Then again, I am continually flabbergasted by the cognitive errors that the human brain can make. It’s a marvelously designed piece of wetware that does a great job at its intended purpose: keeping you alive on the savannah. Its flaws are easily revealed when applied to off-label tasks.

Let’s go over some of the criticisms from yesterday in declining order based on their lack of credibility.

Death Taxes: I suggested renaming the gasoline tax as a “usage fees on America’s transportation network,” observing that it wasn’t as catchy or misleading as the use of the phrase “death tax” to describe the levy on the estates of deceased multimillionaires.

Several of you wrote to complain that my characterization of the phrase “death tax” was an act of linguistic subterfuge. So let’s look at the data to see what it suggests.

In 2013, 2,596,993 Americans died, according to the Centers for Disease Control and Prevention.

About 5,000 of them paid a tax after that mortal event. To be more accurate, their estates paid whatever tax was owed. That means 2,591,993 Americans died that year without paying any tax.

In other words, just 0.19 percent of all deaths in 2013 resulted in a tax. When 99.81 percent of all deaths don’t create a taxable event, calling it a death tax is mathematically nonsensical.

What is the actual trigger for this taxable event? If your estate is worth less than $5.43 million dollars in 2015 (or $10.86 million dollars for a couple), you are exempt from the federal estate tax.

Over that and your estate pays, which by the way is why the Internal Revenue Service calls it an estate tax. Unlike the gasoline user fees that pay for bridge and highway maintenance and construction, the estate tax is indexed for inflation.

Why would someone use the phrase “death tax” when more than 99 percent of deaths don’t result in a tax? Because he is either a) innumerate, b) ignorant or c) trying to deceive you. There are no other possibilities.

Usage Fees: You want roads and bridges? You want them repaired and in good condition? Well, somebody has to pay for that. In most civilized societies, it should be the people who use or benefit from them.

Alternatively, we don’t have to have roads. We can go back to the 19th century with rutted dirt pathways. That seems to be the route some parts of the country are heading.  You might think this is acceptable. I don’t.

Taxes and Big Versus Small Government: I must admit that some of the pushback was beyond comprehension. “What you are arguing for is a tax increase, and I am against that” wrote someone who could type but not think.

Look, not every single thing in the universe is a debate about the size of government. You are free to debate waste and inefficiency — but the scope of government is simply not what every conversation must be about. The trash has to be picked up, kids need to be educated and the roads must be paved. Simply screeching “No” to every single governmental function isn’t a meaningful or enlightening  way to further this debate.

Comments, Where Intelligence Goes to Die: Have a look at the reader comments at the end of yesterday’s post. There is no comprehension, insight or analysis involved. Instead, it is merely a parade of warmed-over slogans, tired talking points and worthless rhetorical jabs.

This isn’t how comments used to be, or at least how I remember them. I wrote “Bailout Nation” with a huge assist from readers of my blog. I would post short commentary and ask for feedback. It was an amazing experience in the midst of the financial crisis. That approach seems like it would be almost impossible today. And that’s a shame, because the crowd can be an invaluable resource, although today it more often feels as if it provides nothing of value.

Damn Democrats: People are always surprised when I disclose my political affiliation.

I call myself an ex-Republican. When I was coming of age, Jacob Javitz was my senator. A Republican, Javitz backed balanced budgets, low taxes, no unnecessary overseas adventures and keeping government out of the bedroom. I agreed with all of that.

Why ex-Republican? Because the modern GOP has tacked so hard and far to the right, and it has gotten into bed with religious zealots who have no use for science. I simply have no reason to want to be associated with that sort of ideology. Even though I am socially progressive, I am still fiscally conservative.

When I lived in Nassau County on Long Island, then controlled by a Republican political machine, I was a registered Republican. When I lived in New York City under a Democratic machine, I was a registered Democrat. In both instances, the primary functioned as the general election. Today, I am a registered independent. I voted Libertarian last election.

And I still want my roads paved.



Originally: The Death Tax Deception




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    • VennData commented on Apr 28

      I just make my own energy at home: personal nukes. And drink rainwater collected from my non-to-code roof.

      Gives me piece of mind when I protest at the local ER that people think they have the right to go there.

    • catclub commented on Apr 28

      Apparently it is illegal in some places (some cities in California?) to collect rainwater from your roof – i.e. block the flow of rainwater. Somebody else has a claim on that water when it gets to a river.

    • Whammer commented on Apr 28

      @rd, I don’t know where you live, but here in Northern California we have seen the consequences of that urban natural gas line explosion in dramatic fashion. And now, the “regulatory capture” of the PUC is coming to light and is horrifying.

      Regulatory capture is, of course, a well understood problem in governance, and it is tough to solve. That doesn’t mean it should be solved by eliminating all regulations all together, and hoping the frigging “free market” will somehow solve for it for no reason.

      I am beyond sick and tired of hearing people make arguments based on the first 2 weeks of Econ 101.

  1. diogeron commented on Apr 28

    My problem with today’s Libertarians is they are too often like the very people you criticize, e.g., all taxes are evil, government should outsource education, in love with vouchers etc. Also, as looney as Ayn Rand was, she supported separation of church and state and a woman’s right to reproductive choice, unlike a lot of self-identified Libertarians, like Rand Paul (on alternate Tuesdays and Thursdays anyway.) Of course, your vote in 2012 in NY was as insignificant as mine was for Obama here in Indiana. Oh, yeah, and we elected Mike Pence and THIS legislature. We all saw how THAT turned out.

  2. Slash commented on Apr 28

    Oh, Barry. Don’t you know, we’re supposed to auction off all our important stuff to the highest bidder so we can get the same efficiency and excellent service that customers of cable TV companies, phone companies, insurance companies, the financial services industry, the tech industry (Facebook, Twitter and the like), and Walmart enjoy? Don’t you know that being overcharged for crappy service is OK when a business does it, like how Time Warner is charging me $90 a month for basic cable now?

    I mean, after Walmart is running our healthcare system and Facebook and Twitter have merged with Time Warner and AT&T to run all of our telecommunications and all of our banking is done through whatever soulless behemoth ends up running that show (because who better to be in charge of all that than the people who ushered us through the Financial Ruin of 2008?), and our police departments are all run by Omni Consumer Products, we’ll have achieved the ultimate dream of Galt acolytes everywhere.

    I think the thing that bothers me most about these people is they force me to defend the federal government, which I don’t love doing. But if I have to choose between the monstrous, unchecked greed and self-interest of giant corporations or the (mostly) benevolent incompetence of the federal government, well, I guess I’m gonna have to choose benevolent incompetence. It’d be nice to have a third, better choice, but apparently we’re not going to get that anytime soon, because so many people’s livelihoods depend on not having a better choice. We’re sure as hell not going to get it if Republicans are in charge. We’re seeing now what their idea of governance has already done to Kansas, and in record time, too. Apparently the only proper role for the power of government the Republicans can imagine is micromanaging our private lives.

    • DeDude commented on Apr 28

      Yes it is kind of absurd that so many people think that if they get rid of gobinment they will be more free – are they serious???? I think we need to send them to gobinment free havens like Somalia, so they can be re-edumacated. A country without a government is a country tyrannized by thugs (corporate and/or street level).

    • ottnott commented on Apr 29

      Those worshipers of private property fail to understand that, without government, they can only possess property, not own it.

  3. VennData commented on Apr 28

    Obama’s new executive order:

    Anyone who complains about taxes gets no Social Security, VA or Medicare. Cops and FBI visit are off limits. We send your house, GoogleMaps-starred to ISIS and you get all your meat and produce off Barry’s savanna free from government interference.

    Feel free to drive on any side of the road you want to hear Rand Paul backpeddle on his prior ideological claims (sorry, no gov’t regulated telecoms or internet for you) you will however be subject to traffic ordinances and can complain from prison, a Russian Prions if you choose like your hero Snowden.

    You can of course keep your cowboy hat

  4. curmudgeon2000 commented on Apr 28

    There’s a country that collects little to no taxes, where there’s essentially no pesky government
    regulations to hamper innovative entrepeneurs, and everybody can own all the guns they want.
    The name of this libertarian paradise? Somalia!

    • econ1 commented on Apr 29

      I think it is a matter of degree. You can have too much government…think Russia, or less extreme France or Greece. Some folks think the US has moved too close to say France, others not so much. Is government’s role to protect the country and the rule of law, or more to rule the citizens. Many people came to the US historically to get away from oppressive governments, and some because the government form…say thugs in Somalia or Cuba or Venezuela…was unattractive. Maybe we have a good balance.

  5. 4whatitsworth commented on Apr 28

    There is no question that our infrastructure needs help and a gas tax is a good way to fund it. I think that mist Americans would agree with this despite the name “Gas Tax, Death Tax” whatever you want to call it. We Americans are largely a generous lot and providing funds where they work this is really not the issue. The issue is how can we be sure that these funds would actually be used for what they are indented for? (BTW I think we have given up on the oxymoron “government efficiency” add that to “Death Benefit” and “Jumbo Shrimp” as amusing but useless marketing tag lines!

    Here is a very real and good example of why I distrust the government. We live in an older residential neighborhood (and pay plenty of taxes) our streets look third world, pot holes everywhere, there has been no resurfacing work done in 20 years. We finally had the pothole crew out fixing a few holes almost the size of cars. I asked why they don’t resurface our roads and one of the guys had been with the City for 30 years said that around 20 years ago the city learned a financial trick where they could just “defer the maintenance” then use the available cash for other purposes so that what they do.

  6. willid3 commented on Apr 28

    kinda fits with some foolish memes i have heard, like not wanting to pay for roads they dont use. never mind that the food they eat, or just about every thing else they buy comes from some place, by road. course their taxes dont pay for the roads use by themselves.sort of like insurance. they seem to think their premium pays for their claims all by it self. not unless your premium is more than your claim, it doesnt

  7. alexanderdelarge commented on Apr 28

    ” benevolent incompetence ”

    benevolent : adjective – : kind and generous : organized to do good things for other people
    incompetence : noun – in·com·pe·tence : lack of the ability to do something well : the quality or state of not being competent

  8. curmudgeon2000 commented on Apr 28

    There’s a country that collects almost no taxes, where there is essentially no government regulations impeding innovative entrepreneurs, and everybody can own as many guns as they want.

    The name of this libertarian paradise?


  9. GoBigRed commented on Apr 28

    “I don’t see why a man shouldn’t pay inheritance tax. If a country is good enough to pay taxes to while you’re living, it’s good enough to pay in after you die. By the time you die, you should be so used to paying taxes that it would be almost second nature anyway.”
    WIll Rogers

  10. jbegan commented on Apr 28

    Cut our absurd military spending and rebuild our infrastructure. Simple. It creates jobs.

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