Just 11 years after his death, Milton Friedman is leading an expanding campaign to persuade lawmakers to abolish the federal estate tax. And this posthumous lobbying effort by the winner of the 1976 Nobel Prize in economics couldn’t come at a better time.
Here’s the story: Workers cannot earn higher wages unless they get more productive, and the bad news is that productivity growth still hasn’t broken out of its Obama-era slump. Today the Journal reports:
Compared with a year earlier, which is how economists often look at the longer-term trend, productivity was up 1.2% in the second quarter. That was a pickup from last year, when productivity posted its first calendar-year decline since 1982. It also matched the average pace since 2007, but remained well below the post-World War II average of 2.1% annual growth.
Lacking faith in the economic future, business owners have been reluctant to invest in the equipment that makes workers more productive. And the difference for workers between productivity growing at its recent 1% per year versus the faster traditional rate is enormous:
“If labor productivity grows an average of 2% per year, average living standards for our children’s generation will be twice what we experienced,” Federal Reserve Vice Chairman Stanley Fischer said in a July speech. “If labor productivity grows an average of 1% per year, the difference is dramatic: Living standards will take two generations to double.”
In the U.S., productivity growth was slowing before the recession began in December 2007 and has been historically weak throughout the recovery that began in mid-2009. That likely restrained wage growth and overall growth in economic activity.
A great way to encourage the investment that allows workers to be more productive and to command higher wages is to increase the returns on such investment. This column recently noted the voluminous research showing that reducing corporate income tax rates encourages investment which then drives wages higher for workers. Killing the federal estate tax, currently a whopping 40% after exemptions, would also encourage more investment—specifically in privately held businesses.
“Our model estimates that if you eliminated the estate tax the business capital stock would increase by 2.6 percent, which is about $850 billion worth of productive assets,” says Kyle Pomerleau of the Tax Foundation.

HA!

The trickle doesn't work.

And besides - for the 2016 tax year, the estate tax exemption is $5.45 million. It increases to $5.49 million for 2017.

All those poor, poor rich folks...

I dunno about you, but I'm not looking at any old relatives dying where the estate tax is a big deal.

Wealth, without humility, is toxic....

One most common attribute of the wealthy is, it creates more greed.
You think, if only I could make a million a year.
You achieve it.
Then, your lifestyle changes, and you think, if only I could make 2 million dollars a year.......

People kill for less.

It sounds good Web, but it doesn't really pencil out.
If investing more capital will generate more wealth, growth, income, for a company or investor, they don't need to more incentive than what already exsist.

A company, but more specifically a publicly traded company is staffed by people who are legally obligated to make the shareholders as much money as possible. So they are legally obligated to pay their labor as little as possible within the realm of recruiting an acceptable level if talent.

And I confess to being a little disappointed in that response Locke; given what I've read of your past comments.

Business is a competition and while you don't have to win every game, you can't lose very many either. You have to move forward which entails more than just paying the lowest salary that gets you by. Certainly some companies follow that strategy and I've work for them.....but only for a short while. We're all 'free agents'.

Successful business' win by moving the bar up, not leaving it level or even taking it down a notch. And moving the bar requires effort, equipment, people etc...   That's achieving the responsibility given to you by shareholders. Look up the parable of the talents in the Bible and replace a few objects in the lesson and you'll see my point.

Dealing with manufacturers on a daily basis, I've seen first hand the higher level of activity that comes with the confidence many companies have today more than last year at this time. My company has hired two people recently in an attempt to position ourselves to take advantage of this activity.

Don't let what someone else has affect you. the only way it can is if you let it.

There's another great parable told in the Bible of a man who hired people to work in his fields at various times throughout the day; 9am, noon, 3pm and 6pm.  At 8pm he went to pay them all and gave each one $10. The ones hired early in the day started bitching because it was 'unfair' for the later ones to get paid the same.

What the man said is something we should always keep in mind.

Go look these two up for yourself. Don't spoil and put the answers on here. (Raydawg!)  they are great lessons to understand.  

Another great lesson is an essay entitled "I, Pencil" by Leonard Read.

All you need to understand about economics, work habits etc is contained within these three writings.

Speaking for myself - there's no jealousy here.  I'm very happy in my life.  I'll never be a multi-millionaire and that's cool with me.  I'm quite comfortable where I'm at.
However, IMHO - the burden needs to be the same for everyone.  Or at the very least, closer than it is now.

I don't want to tax the richest to "get them to my level" - but something like repealing the estate tax is doing just the opposite.  Corporations routinely get welfare for just doing business, the wealthy (like mitt rmoney) get to "repatriate" their money from foreign banks during "tax holidays" - I dunno about you, but I've never been given a tax holiday...

Routinely get welfare for just doing business?....   JUST DOING BUSINESS? What does that even mean in your eyes?  And you get all kinds of tax breaks. Home mortgage deductions for one thing. But I'm not going to argue the middle class doesn't over pay, they do. In fact, they are the ones who always pay. Obamacare hammered the middle class for example. but let's not get too far off track.  

As far as the trickle down economy - sorry, it just doesn't work.  We've been in that very economy since the late 80's - I have yet to see a sustained  "boom" - however, there was that time under willy c. in the 90's - but it didn't last.

Again, how can you say that? We are one of the most prosperous nations in the history of the world. Our middle class live like Kings compared to the 'middle class' in many other nations. You want middle class in India? China? Brazil? "Trickle down" has given you the ability to buy a home, car, motorcycle, computer, iPhone, access to healthcare, leisure, etc.. and you have all these things in greater abundance and variety than 90% of the globe, maybe more.

Presumably you work for a rich guy, a rich corporation. You took that money and purchased goods and services from others. If you got a big raise, you'd spend that money elsewhere, trickling it down. People who claim trickle down doesn't work are stuck on the idea that those above them are getting something they don't deserve.  

Corporations are paying a lower share of taxes in this country as compared to 30 years ago.  Yes, I know the tax rate is "high", but their effective rate is far less than that.  Same goes for the richest individuals.

Again, so what? Aren't we better off with money in the hands of corporations and individuals rather than money in the hands of government? I'm talking excessive money from taxes, not money for basic services.  

Look - I don't care what someone makes.  This Country was built on capitalism.  But capitalism run unchecked will bring it down (yes, socialism run unchecked will do the same thing).  But there has to be a better way than giving the richest even more.

Has there ever been a capitalistic society run into the ground because of capitalism run amok? FYI: don't cite the Great Depression; as that was not capitalism run amok. Find me another one.

I don't think it's unfair for the burden to be spread more evenly.

the wealthy pay far, far more than you or I do.  

justin_o_guy2 wrote on 08/10/17 at 08:10:13:


a little explanation please.

There's another great parable told in the Bible of a man who hired people to work in his fields at various times throughout the day; 9am, noon, 3pm and 6pm.  At 8pm he went to pay them all and gave each one $10. The ones hired early in the day started bitching because it was 'unfair' for the later ones to get paid the same.

What the man said is something we should always keep in mind.

Go look these two up for yourself. Don't spoil and put the answers on here. (Raydawg!)  they are great lessons to understand.


Web, that parable doesn't fit.....

Yes, as with many lessons, we are taught in the teachings, they are directed at "self" to free yourself, from our toxic self, which includes our focus.
Greed will ruin our lives, beware.

Could we not extend your reasoning and say, these companies should give to Caesar, that which is Caesars, and not complain (about) using the "fairness" argument, that they pay more (tax) because of them having invested more labor ( money, etc )......

If no, please explain why they would be exempt.
And please do not say a company is not a person, that is just too weak.

PS: I see no generosity in the companies argument, that they WILL provide more support to those in need if their burden is relaxed.
Friedman says them will/might/could, invest it back into the company, which will allow it to prosper more greatly.....
Business earns it wealth on the labor of others, you can not argue otherwise.....
That is not generosity, that is manipulation and expectations.

PS: I am not wealthy, but very blessed.
I have all my needs met, and I am thankful.
My wife and I work very hard, which has paid off way more than just money.
ALL of my children have witnessed, and adapted, wonderful work ethics.
They are ALL self supporting, and reap the rewards of self acceptance, and worth......priceless, in my book.
You can't buy that with millions.
Look back into the Bible Web, see how many were separated from Our Lord because they couldn't give up their security of wealth.

I am not jealous of them, but like the overcoming of my addiction to booze, I am thankful I am not beholden to another trap, that "can" destroy me, if I "let" it.

Web, I think you are hoodwink on this one.

PSS: I like this: "Ask not what your country can do for you, ask what you can do for your country" is a quote from John F. Kennedy in his Inaugural Address on January 20th, 1961    

That thought turns it back to "self"

I KNEW that explanation would be for nothing