Ask HN: What if there is no inheritance?

I really like Warren Buffet's description of the ovarian lottery, below. I think about this question a lot now that I'm a (relatively wealthy) parent with two small children. If I have the opportunity, is it acceptable for me to provide them with a privileged life. Maybe so, if I can also teach them to be grateful for what they have received and understand that it's their job (as well as mine) to make a more fair world.

Warren Buffet: "My political views were formed by this process. Just imagine that it is 24 hours before you are born. A genie comes and says to you in the womb, “You look like an extraordinarily responsible, intelligent, potential human being. [You're] going to emerge in 24 hours and it is an enormous responsibility I am going to assign to you — determination of the political, economic and social system into which you are going to emerge. You set the rules, any political system, democracy, parliamentary, anything you wish — you can set the economic structure, communistic, capitalistic, set anything in motion and I guarantee you that when you emerge this world will exist for you, your children and grandchildren.

What’s the catch? One catch — just before you emerge you have to go through a huge bucket with 7 billion slips, one for each human. Dip your hand in and that is what you get — you could be born intelligent or not intelligent, born healthy or disabled, born black or white, born in the US or in Bangladesh, etc. You have no idea which slip you will get. Not knowing which slip you are going to get, how would you design the world? Do you want men to push around females? It’s a 50/50 chance you get female. If you think about the political world, you want a system that gets what people want. You want more and more output because you’ll have more wealth to share around."

Milton Friedman on a 100% inheritance tax:

https://youtu.be/MRpEV2tmYz4

The argument is basically that it would encourage very wasteful behavior. If you think about it, people often work to make the lives of their children better off to a large extent. My grandfather who lives in a poor country living on a pension still sends me $100 he saved up periodically despite the fact that I'm wealthier than him by many factors.

Without the ability to pass on wealth to future generations, empires would not be built in some cases, end of life would include many wasteful lavish purchases and the black market for wealth transfer services would balloon

I'm 30 and I luckily still haven't collected inheritance. If and when I do, it will come too late in life to make much difference. The head start I was given was down to the way I was raised by my parents, including the things they paid for. So unless you're suggesting making it illegal to buy your children clothes, food, education, etc, (an extreme form of communism?) I'm not sure inheritance has much bearing on social inequality. Only the very wealthy have so much inheritance that it impacts the way they conduct their life from birth.

Even without inheritance, not everybody would have the same start, because of how they are raised. For instance, rich parents can afford more expensive toys and tutoring.

To make education more equal, you would have to separate children from parents and give them all the same quality of education. But radical changes to society would be required to do that.

Then you'll just see more aggressive versions of the tactics the rich already use, like setting up charities that employ their children, etc. And the middle class will get screwed again.

Absolutely not.

Working to enrich the lives of our children is a fundamental drive. You can't eliminate that with a law.

What we traditionally think of inheritance is only part of the picture of what makes life unfair, but abolishing it would certainly help stop the top 0.1% controlling massive dynastic wealth for generations.

The only way to do this is to have a 100% death tax and to have an open bidding system for all assets. Otherwise you'll see deathbed $1 transfers of wealth. The open bidding system for any transfer at any point in life.

The problem with this whole concept is the number of people who received some kind of wealth transfer from their parents. Pretty much everyone I know has received financial assistance from their parents and are terrified of the idea of not having that leg up. Even amounts as small as $5,000 is far more than most people get. A lot of people don't realize how much their parents gave them.

That would mean all posessions need be taxed at ones death. So governements would be in competition for those taxes. Most likely by offering tax benefits ;-)

Yes, inheritance is fundamentally immoral. An obsession with one's genetic output is simply primitive tribalism.

My kid has had enough benefits already, and frankly if he can't make it as an adult that's his problem.

Some people of course can't make it as an adult for reasons beyond their control (disabilities, extraordinary bad luck, et al) and society would be better off providing a viable baseline for everyone. For example: good roads benefit everyone. Universal health care benefits everyone and helps small businesses. This problem will only get more extreme as robots take over more and more labor.

BTW my kid's only problem with my approach is that I joke that the assets are going to the home for homeless cats. He doesn't consider cats a good enough cause :-)

How about you can leave no inheritance to your kids if you want to, but you keep your hands off the rest of us's stuff? If you want to talk about "fairness", freedom is fair. Stealing from others (even if done through the mechanism of government) cannot be.

How exactly would you do this?

Certainly by the point a parent dies, the child has already reaped many benefits. Education, networking, travel, exposure the finer things money can buy...

Furthermore, isn't there some benefit to having people who are ambitious with built-in safety nets? What if Bill Gates hadn't been able to go to Lakeside? And would we still have Microsoft if he wasn't comfortable dropping out of college?

Not everyone starts in the same place... some people have more money, some are taller, smarter, prettier, stronger, faster, etc. We have to make sure the rules reflect this and constantly work towards keeping the playing field as level as it can be for those starting out.

What if all inheritance was collected and evenly distributed? - at a rate of X assigned at birth based on existing pool to be awarded at age Z or by medical need... In general, people do not value governmental transparency so we always have corruption that would subvert this, but it's the solution that I would select (in some fashion).

Taxing property, rather than income, can have this effect.

Yes! Composition over inheritance!