comments opened up by me (cue devious laughter)…

You want whining, you won’t get it. I know this is how society works and if anyone deserves absurd amounts of money, may it be a fellow eph (or a member of my immediate family…)

Your comparison group is with others with williams degrees. Come on! That’s not complaining about income inequality across society. And yet you switch to comments about income inequality. So we both agree this is not about income inequality in a society, but about non-profits not paying enough (for example) while others are overpaid.

But that’s not an argument that is being made–the argument doesn’t just let you chop off 50% of the society and say “here, complain about income inequality only about the top 50% forgetting the bottom 50%!” that’s not fair to critics of income inequality.

What is wrong with a world in which rich sophisticated investors want to pay Coleman so much? The fact that they can and continue to do so. Why does anyone really need anything beyond, say $20 million (to pick a random but extremely high number)? Does it really matter that much that someone’s wealth expands from $200 million to $230 million instead of $210 million? At some point, doesn’t the accumulation of wealth become a cycle of greed that has no real value except as a game for the wealthy while others could do great things with that money? What do those extra $20 million in my hypothetical get for someone? its just all so extravagent. Wouldn’t it be okay to go up to $210 million and give the other $20 million to pay the military better? or teachers? Hell, how much would it hurt to give $180 million to them?

that cliche about to those with great power should be replaced with “to those with great wealth” in our society. i don’t know if that’s better or worse.

I have no problem with Chase’s salary in a purely private venture like Tiger. My only regret is never knowing the man in college … maybe I could have hopped on board the gravy train. If he ran a public company with thousands of employees and shareholders, that would be a different story.

What I do have a problem with is elimination of one of the greatest incentives our society has for redistribution of true excess wealth to places it is badly needed: the inheritance tax. Certainly, without that tax, some people, like Bill Gates and Warren Buffett, will give most of their assets to good causes. But there is no doubt that charities will take a huge hit with elimination of this tax. And if any tax is justified, it is that one: why should the privileged sons and daughters of the wealthy, who have already received enormous benefits by virtue of their birth, inherit $100 million from mom and dad? They sure as heck didn’t earn it. Isn’t 50 percent of that, or even 10 percent of that, enough to get by? I think democrats have become too cowardly to challege the misleading (if not outright false) GOP rhetoric on this point. Very few Americans realize that the inheritance tax affects only a tiny sliver of society, the sliver that is already unbelievably well-off. If you’re in a position to leave your kids over two million, almost surely, you’ve provided them with tremendous opportunities prior to passing away. If they blew those opportunities, tough luck. And even with the inheritance tax at 50 percent or even 75 percent, hell even 90 percent, of anything over two million, most of those slacker kids are pretty much set for life.

I think the inheritance tax is a pretty good idea, but the pre-2001 implementation was not very good. I would think that raising the exemption amount, limiting the deductions, and capping the marginal rate somewhere in the 35-45% range would provide the best mix of benefits to society and “fairness” to the taxed.

As far as Jeff’s comments go, the kids of the “wealthy” (however defined) didn’t earn the right to the money, but the parents, who’s money it is, surely should have the right to decide where the bulk of it goes. At least in my view.

By the way, congrats to Chase. I hope he’s happy with whatever he does with his money.

David: Of course, you hedge fund managers surely provide a refund to your clients when you produce a loss year.

Jeff: The good use to which Paris Hilton is putting her inherited wealth certainly defeats your argument.

It’s pretty amazing and rare for a 45-50 year old to have that position, let alone a 31 year old with far fewer years in the business (and apparently no MBA or CFA). Hats off! Would love to hear the story on how he landed in that seat.

Regardless of the turmoil at Tiger over the years(I fondly remember the high level phone calls that would come into the trading desk when a huge spec position went south on them)the fact that a 31 year is in control of a fund there might speak highly of the place. There are some places on the street where a young talent like Coleman might be seen as a threat by more established people at the firm.

I have no problem with big money paid to Coleman here, or any other Wall Street exec, if the returns to the investors or shareholders are delivered. Some of my qualms surface when the executive pay is unreasonably high when shareholders or investors lose money or underperform the market. I don’t expect hedge fund managers to work for free, even in down years, but some of the eye opening payments of recent vintage to bad fund managers are difficult to justify. (I’ll save my rant about executive pay in the face of large layoffs at an investment bank for another time!)

Generally youth tends to be overly optimistic and ill prepared for the denouement while old age tends to be too conservative, thereby missing the bull run.

I also think Jeff Z. makes some good comments on the estate tax, but I do diagree with him slightly on one small point, although this disagreement actually serves to support his opinion on the larger effect of the repeal of the tax.

“Certainly, without that tax, some people, like Bill Gates and Warren Buffett, will give most of their assets to good causes.”

I don’t think that is the case. I actually agree with the notion espoused by some that the inheritance/estate tax actually is the driving force in the creation of trusts such as the Bill and Melinda Gates Foundation. Gates may well be just as generous (or even more so) if the estate tax did not exist, but I think some of these large trusts are created in order for the wealthy individual to retain some control over how his earnings are spent, rather than just having them used to pare down the national debt. I think, without the tax, it is equally plausible that someone like Bill Gates would donate less overall, because he would not have to consider the alternative that his moeny may be used by the government for purposes that he is not inclined to support. This, in my view, confirms and underscores Jeff’s larger point “that charities will take a huge hit with elimination of this tax.”

And I think we would be remiss if we did not acknowledge the benefit that college endowments, such as Williams’ and my alma mater’s, gain from the presence of an estate tax.

In order to maximally benefit Williams and its like let’s have a 100% tax on all gifts and bequests except for those to charities, which will be tax exempt.

What Coleman earns is not your business.

The prospectus informs their investors as to his compensation. If they do not appreciate his return to their investment, they can opt out.

Egalitarianism is a disease of the revolutionary pathological mind.

Inequality differentiates. This is the beauty of nature and natural processes. It is what accounts for evolution. Only static totalitarian and egalitarian notions wish to tax creativity and productivity for the unwashed.

Taxes are liens against property and productivity so that static governments mayt maintain fairness doctrines to quell mob democracies.

Inheritance taxes debase family, nation, state. Inheritance taxes do not disadvantage men of means. It devastates farmers, the middle class, and people of moderate corporate and legal expertise.

With regards Gates, he and his father spoke about taxing at 100% all inheritance. Understand that Bill has salted away billions in a foundation that will protect his family in eternity. What regard does he hold for the common man? He rewards the economic slave with nostrums concerning his/her well-being.

We need individuals that empower individuals, institutions, and environments that add value to society.

Understand that life is about risk management. Understand that proper management secures the interests of each and every one of us.

Inheritance tax is the dumbest idea on the face of the Earth.

Exceeding participating on this blog?

Inheritance tax “devastating” small farms and the middle class is a fiction sold by the GOP to protect their ultra rich constituents. We’re talking about taxing a PORTION of inheritances OVER TWO MILLION DOLLARS. I think pretty much any “middle class” Americans would happily take a two million dollar inheritance. Inheritance tax is by far the most justifiable of any tax because (a) it in almost all cases only affects the ultra rich and (b) it’s taking money away from people who didn’t earn it in the first place. Think of it under a veil of ignorance. We need to raise x tax dollars. Would you rather (a) have more of your salary, that you worked for and have some control over, taxed, or (b) have more of your inheritance, which is completely fortuitous and random, taken away? Remember, this is a zero sum game. If you don’t like inheritance taxes, you have to justify why you prefer higher income or property taxes instead.

And actually, it’s less than a zero sum game, since this administration has needlessly wasted hundreds of billions on Iraq at the same time it has eliminated the inheritance tax. Basically, by saying the inheritance tax is dumb, you are saying it is better to pay for this war with raising taxes on middle class Americans (who are, not the rich, also the ones actually fighting the war) instead of the rich. That, to me, is dumb.

Of course, we could cut entitlements.

“Needlessly wasted hundreds of billions on Iraq” is, of course, a matter of opinion (albeit one which most Americans would likely agree. Jeff, I’m sure you know that the inheritance tax has not been “eliminated” yet, and will actually, under current law, only be gone for one year. (I wouldn’t want to be a frail, very wealthy person in 2010). I think you are right that the claim that the tax devastates small farms and businesses and guts middle class estates (however defined) is demonstrably false. However, I believe that the pre-2002 version of the tax would certainly have hit many upper-middle class (only slightly rich?) families, particularly on the coasts, as housing price appreciation dramatically ramped up the value of people’s estates.

Fair points, Whitney. I guess I would be on safer ground saying that government spending, in general, continues to rapidly increase (with no end in sight) no matter who is in charge of government, and that money to pay for that increased spending has to come from somewhere … given that reality, I’d say the inheritance tax is the fairest tax there is, and the last place I’d look to cut revenues.

Anon@11:54, thanks for that breath of fresh air.

Are you a current student? If so, consider taking PoEc 301 next semester. It’ll be fun!

I think you are right that the claim that the tax devastates small farms and businesses and guts middle class estates (however defined) is demonstrably false.

Looks like only approx. 18K estates/yr. reached the $1M mark in ‘04, of which only about 500 derived more than 50% of their value from farm/business proceeds.

Inflation adjust, index for altered costs of primary goods and services (housing and health care etc), … one wonders where the “rich” in America are.

P.S.: In GOP parlance, it’s the “death” tax. I’d be very interested to see if the housing market irrationality has affected estate value substantially; I doubt it given the same (persistent) bubble phenomenon on the West Coast and the concurrent lack of expansion in real wealth.

Isn’t this whole death/inheritance/estate tax matter about the greedy proposition of one deserving/indolent group’s attempt to lay its hot hands on another group’s hard earned/ill-gotten money and the second group’s sticky fingeredly stiffarming of the attempt? Very uplifting politics!

Education, like wealth, is the transformation of knowledge and practice that enables the individual to develop his or her specific self-interests. Highly regulated societies ensures that wealth aggregates to the very few. It is highly desirable that you focus your energies, not on taxing, but on deregulation. Highly regulated societies transfer wealth to the very few. Regulation protects special interests at the expense of all interests. Highly differentiated societies are the most productive.

Do not focus on greed or other emotionally charged verbiage. Change the structure. Do not focus on content, as that is a distraction. Distractions are unseen taxes that deletes your person of energy, honor, strength and vitality. Work towards greater goals. Understand the power of forms.

anonymous may want to look into comparative wealth inequality across times and societies a tad bit more before writing nice sounding claims that don’t hold water.

anonymous may also want to read some of the academic work that shows the inefficiencies of inequality, as sociology and other social sciences have moved well beyond such functionalist arguments that “highly differentiated societies are the most productive”.

its also hard to argue that an estate tax transfers wealth to the few, considering that’s exactly what it is design to do and accomplishes.

Why you gotta get up in wealthy ephs’ faces? Mind your own business.

[...] Eph made the most money in 2007? Excellent question. My guess for 2006 was Chase Coleman ‘97. Last December I thought for that Mike Swenson ‘89 might have a [...]