Are you saying that the estate is valued at over $ 7,000,000; because if it isn’t then what are you worried about. any estate is exempt up to that amount.

Uncle Sam is not interested in your six room house; unless it is sitting on an awesomely valuable piece of beach or a 0.05 acre lot in midtown Manhattan, it is not likely to be worth enough to trigger a federal estate tax. And, if it does, the value is mostly in the land, not in the 6 rooms. Your fellow human beings made that land valuable; you didn’t!

oterjo,

When a lot in the central business district (CBD) gets to be too expensive, the lot on the fringe may or may not make sense. If you’re running a fast food joint, and any employees will do, and your rent is dependent on the foot traffic, you may put in a Subway shop rather than, say, a BK. But if your business depends on a skilled labor pool, you’ll want to draw from a 360 degree radius. And if your business is specialized, not the sort of place people visit on a daily basis, you probably need to be downtown, where people from all sides of town can reach you. So if you can’t get a CBD location close to the best foot traffic, you may not pursue your business plan. But if the incentives are such that the owners of such prime sites are motivated to replace the diner with a midrise that has space for a coffeeshop on the first floor and other businesses on the next few floors and housing above, many more people will be accommodated on that 0.05 acre lot.

Lotteries, if I understand the history properly, were designed to replace the private sector “numbers,” and were promoted as a way to aid education. I think I read recently that per-capita lottery ticket sales in Massachusetts amount to $607 per person per year! That’s appalling! The notion that people feel that their chances are better with the lottery — to the tune of nearly $2 per person per day — than with their labor in the marketplace, is a scary one. It either says terrible things about our education system - what is the line? lotteries are a tax on the innumerate? - or about people’s perceptions of their chances in our economy. I don’t know which is more troubling!

I guess lottery winnings should be taxed as ordinary income; I don’t think they should be favored, as, say, “capital” gains are. But it seems odd to me to tax wages so heavily, and tax rent so lightly. We ought to be taxing land rent (not building rent) heavily — and wages and sales lightly, if at all.

Remember Leona Helmsley, and the famous quote? “We don’t pay taxes, only the little people pay taxes.” Most people think she was talking about tax evasion. But I think she might have been speaking a much larger truth: that we permit special interests to privatize the economic value of land, and foist the costs of providing the services which make this a great country and make our best land extremely valuable onto ordinary workers and consumers.

Here’s a last year’s blog post on Leona, and us: http://lvtfan.typepad.com/lvtfans_blog/2008/07/leona-helmsleys.html

Leona Helmsley’s luxury hotels would not make it outside of midtown Manhattan. Her husband’s office buildings ditto. But they didn’t make those sites valuable; we all did. Via public investment, yes; via the tax breaks we provided them, yes; via our presence as a market for them; via our tax breaks to the folks who could afford 5 start hotel rooms. Via the taxes — local, state and federal — that financed the subways and the interstates and the airports and the bridges. The list is long … and the benefits are rather concentrated in landholders!

See also http://lvtfan.typepad.com/lvtfans_blog/2008/07/we-all-pay-for.html