There's nothing wrong with people earning lots of money from their own work, but they shouldn't be able to pass that on to heirs who have done literally nothing to earn it.
In the most basic sense, how much should I be allowed to do what I want with my own money?
A step more complex; giving to your kids is, AFAIK, one of the biggest drivers in why people try to make money during their lifetimes.
A step more liberal: Inheritance (the accumulation of wealth by a family), again, AFAIK, is an important part of upwards mobility.
The current setup is definitely sub-optimal. 100% would also be sub optimal, and, I'd argue, worse than what we've got here, because it's another thing that rich people could dodge that not-rich people couldn't.
It's not your money once you're dead. As far as I'm concerned, dead people don't have any rights.
> A step more liberal: Inheritance (the accumulation of wealth by a family), again, AFAIK, is an important part of upwards mobility.
On the contrary, I think it hurts economic mobility a lot more than it helps. If you're competing for opportunities with people who inherited millions of dollars (without doing anything themselves), it's a lot harder to advance yourself.
Non-rich people don't generally leave enough of an estate for it to matter in the first case. We could easily exclude the first $100k for that matter.
We have an existing estate tax. It's not a novel concept.
Yes, it is novel to do that.
There's already a 40% inheritance tax. How do you think it works in the status quo?
Plenty of estates have to be liquidated to settle debts and taxes today. It's hardly unprecedented.
It would take years to sell off $50 billion of stocks without crashing the company. Even if they are patience and manage to do that, alot of people, myself included, would have trouble with the government being in de-facto control of the company.
If you dismissed either of the two reasons above, I guess I don't see a point in continuing the discussion.
I agree. It's not worth continuing this discussion if you believe that it takes 10 years to sell off $50 billion of stocks.
Russian oligarchy is an illustration of this - the inheritance tax is effectively 100%, with the understanding that the property can be taken and re-gifted away any day, so most enterprises are stripped of their cash as soon as possible with money redirected towards conspicuous consumption.
The Russian example seems to be more a testament to the danger of unstable political regimes, not the problems of a high inheritance tax.
I don't want to live in your world.
I don't particularly like living in a world where my hard work is confiscated at a high rate while someone who just has the good fortune of wealthy parents can receive millions tax free.
I have no interest in living in your dream world of justice. As it would have been a totalitarian nightmare where everybody would be worse off.
I really don't understand why you're so vehemently protective of inherited wealth. Do you think it's abhorrent that Bill Gates is voluntarily donating most of his wealth to charity instead of leaving it to his children?
Why do you think an inheritance tax is "totalitarian?" At least, why is it any worse than income taxes?
I don't care what people do with their property out of their own free will.
I do care when people are trying to instate authoritarian totalitarian governments.
I oppose inheritance tax - as that inheritance has already been taxed at least once.
I have plenty of good solid arguments on my side.
And I would advise you to put a bit more thinking into your ideas.
If you have so many "good solid arguments" on your side, I'd love to hear them. Or answer my question of why they're so much worse than income taxes.
Why do you think that an inheritance tax implies an "authoritarian totalitarian government?" It's a total non sequitur. Does Denmark have an authoritarian government because they impose a high income tax?
Your conflation of income and inheritance tax is disingenuous.
My crown argument against inheritance tax is that the property being inherited has already been taxed before.
Another would be that taxing inheritance destroys capital base, which no society really wants.
Third would be that governments are really bad at managing capital. There are plenty of issues in the nordic models, where there are already signs that their massive welfare states are going to implode in the next couple of decades.
p.s.: How is me remarking that you have poorly thought out positions an ad-hominem?
Why? What is the taxation level where the government is automatically authoritarian? 99%? 90%? 80%?
You can't just assert things and then not provide a causal chain.
What makes double taxation an unmitigated evil? Sales taxes are double taxes, as are taxes on corporate dividends. Yet I don't hear people railing about how they're symptomatic of an authoritarian regime.
> Another would be that taxing inheritance destroys capital base, which no society really wants.
How does it "destroy" capital base? Redistribution of wealth does not equal destruction of wealth.
I agree that many governments do manage their capital poorly. Instead of having government hold on to the capital, I'd say we should collect all estate taxes and channel them into an annual basic income for all citizens. Let the living decide how to use the money.
> p.s.: How is me remarking that you have poorly thought out positions an ad-hominem?
It's not attacking the merits of the argument but instead the thinking of the arguer. I have actually thought about this quite a bit.
p.s.: for readers - see what Milton Friedman had to say on the very topic, to a person that seems very much on the same level as some of the contributors to this thread: https://www.youtube.com/watch?v=MRpEV2tmYz4
Right. Like I mean, it's more complicated than a straight 100%.
For example: What if I transfer my wealth to my family BEFORE my death? What if I set up a trust to manage properties so that my descendants don't own it, but benefit from it? (What if those properties produce their own cash-flow, which goes to my descendants, but they still don't own the property?).
Let's take another example. Let's take Cliff's Variety store in the Haight. Do you think it's worth more than $100k? Do you think they bought/built it for <$100? (hint: no, it's been around in one form or another since before WWII). It's been in that family for generations; it's still in that family. Should it stay in that family? If the current owners die suddenly, before they can transfer ownership, what should happen?
What if my parent owns a company, and I work for that company adding substantial value - like, say, Dr Bronner's soap company? How much of that company's value do I deserve as inheritance, or by ownership, given my contribution?
People live a long time now. I don't have to have the millions of dollars to make you compete for opportunities against my with the benefit of that. Parents (and grandparents, and reasonably, great-great-grand parents) can pay for my education. Or buy me houses. Or not buy me houses - buy themselves houses - and then let me stay there; and this problems is just going to get worse as longevity increases.
The stability of capital is in fact a huge part of how NY/CA remain successful—if you're ambitious, you have to move towards the capital to access it.
Also, keep in mind we're in the context of a thread where people are already discussing how to soak the rich. I'd much rather tax estates than dramatically increase taxes for people who have earned their money.
For what it's worth high estate taxes don't seem to correlate with economic growth (neither are zero estate taxes, to be fair) - I am reading this graph http://taxfoundation.org/article/estate-and-inheritance-taxe... and Japan, for example, being high on the GDP ranking is kinda dead in the water as far as economic growth ranking.
I think eventually the estates succumb to "three generations" rule, so the problem might be self-correcting.
The advantage of a high estate tax is more a social one of removing unearned wealth and freeing up some money to spend on social programs.
But you're right that it might be more efficient to make the tax 95% so the beneficiary has an incentive to handle the liquidation so they can get their 5%.