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Comment by mrfusion | Hacker News Reader

I always wondered, why not a stronger inheritance tax instead of a wealth tax? It would seemingly accomplish the same thing but seems fairer since the heirs didn’t earn the money in the first place.

To head off the main critique. I think either tax could be equally gamed by the rich.

I don’t necessarily support either but I’ve been wondering why Inheritance taxes aren’t really being considered.

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There was an interesting example of this when I took a course modern Middle East history in college.

I forget the exact time period, but basically in pre-modern times Islamic law said that you weren't allowed to pass wealth onto your children. To get around this, the wealthy would found charities and give their kids cushy jobs running them. Even though a lot of the charity's money was presumably routed to giving the kids a lavish lifestyle, this system still resulted in the Middle East having the best social welfare system of the time period.

> To head off the main critique. I think either tax could be equally gamed by the rich.

That is not the main critique. The main critique (IMO at least) is that people earn money to, among other things, give it to their children. Taxing that is, in some people's view of the world, a) a disincentive to work and b) morally wrong.

To borrow and paraphrase Bertrand Russell's argument on the topic:

Why do we see inherited titles as plainly unjust and undemocratic, but entertain inherited fortunes as just and compatible with democratic ideals?

It is incompatible with our human rights to eliminate inherited fortunes. The only way we can achieve that goal is by separating children from their parents from birth and letting them live in randomly chosen boarding schools until they become adults and even then we must forbid them from ever meeting their parents lest they inherit an unfair advantage. There is also a technical limitation: Children always inherit the DNA of their parents so even with the utmost care it is inherently impossible to correct this injustice.

By the way there is a reason why my answer is so extreme: inheritance starts as soon as you are born, not just when your parents die

Australia is an interesting example of the politics of inheritance taxes. We used to have them until a conservative state government abolished them in 1978, which triggered a race to the bottom – abolition in all other states. It’s easier to move states than countries, especially if you have no job or children in school, and the federal government does not have the constitutional authority to impose an inheritance tax of its own. The abolition campaign was assisted by using the term “death duties” and framing the tax as a punishment for those grieving the loss of a family member. I think the idea is still extremely unpopular as a result.

I would love an inheritance tax. Even a 100% inheritance tax, on anything more than zero dollars.

Of course I don't really stand to inherit anything significant, so it's super easy for me to support.

Inheritance is one of those areas where people's values and what they'd support in practice tend to diverge, according to their incentives. (Same goes for California Proposition 13, incidentally).

It seems a very anti-human thing to say that what you have worked for your whole life, that you've already paid tax on all along the way, cannot be given to your own offspring.

It strikes at the heart of what it is to be alive, and the relationship of the individual and the state.

What we need is an inheritance tax on all of the wealth that people didn’t work for. Unearned wealth in the form of real estate and capital appreciation. It’s fine for the hard-working middle class person to pass on their hard-earned home to their child. It’s not so fine if the house has gone up in value 10000% since the time they purchased it.

I don't get it. If you problem is too low capital gains taxes then just say that outright instead of hiding behind an inheritance tax that doesn't even achieve your goals.

This would classify the work of all company founders as "unearned"

There's a big difference between putting your money on the line with a startup you founded and just having the house you live in appreciate over several decades.

As a human, this doesn’t resonate with me at all. I know that many people disagree with inheritance taxes, but I would prefer if my views weren’t characterised as inhuman, since they are motivated by a desire to help people who inherit nothing.

You are talking about trying to interpose in the passing of the fruits of one's labours over a lifetime to one's offspring. Trying to do the best for your offspring is a very deep drive and, while one can make perfectly good logical and cerebral arguments against inheritance at a societal level, you're going to run up against deep and very natural human (and animal) feelings.

You can ask people to transcend those, but don't be surprised when you find people object on an emotional level.

And the level of state ownership of the individual that such a tax implies is very uncomfortable too. I am happy to contribute to the state, but it neither owns me, nor is more important than my own family.

It’s strange that people seem to have assumed that I want to confiscate all inheritances. I just think inheritance taxes should form some part of an efficient and fair tax system, as they do in many countries, but not mine. Do you feel that inheritance taxation implies a greater form of “state ownership” than the compulsory taxes on labour imposed during your lifetime? For me, it feels like the opposite.

> It’s strange that people seem to have assumed that I want to confiscate all inheritances.

Not really in the context of the post I replied to up-thread -

> "I would love an inheritance tax. Even a 100% inheritance tax, on anything more than zero dollars"

I know that wasn't you, but the subject of 100% inheritance tax was definitely raised.

> Do you feel that inheritance taxation implies a greater form of “state ownership” than the compulsory taxes on labour imposed during your lifetime?

Yes, very much. I pay my way during my life, but what I build with what's left should be mine to disperse to my heirs, if any.

I'm not completely opposed to all inheritance taxes either, I think there's probably a balance somewhere, and it's in society's interest to (for example) break multi-generational acquisition of vast amounts of land that result in effective aristocracy.

It's just the 100% crew I object to.

>if my views weren’t characterised as inhuman, since they are motivated by a desire to help people who inherit nothing.

Is this some kind of joke? Who on earth inherits nothing? You've received a body and genetic material from your parents. You have inherited a geographic location from your parents. You have most likely inherited food from your parents. You have most likely inherited an education from your parents. Your parents have passed on so many things onto you before they have died and you call that nothing? Your views are clearly inhuman because they are considering some sort of pseudo life form that exists in a vacuum with no support from anything. The reality is that you start inheriting things from your parents the moment you are born.

If you are truly worried about someone inheriting money while others get nothing why are you complaining about something that usually happens when people are in their 40s and 50s and have already received a substantial advantage from their parents during childhood? You can't undo that injustice after the fact. It's too late, the rich kids who are now middle aged are already ahead of you with 100% inheritance tax or without.

If all of those things are “inheritance,” I’m talking about something more specific – the legal process of reassigning the property rights of deceased people. The state is necessarily involved in this, since it defines and enforces property rights. Different states have different policies ranging from no inheritance tax, to the status quo in the US and the UK, to punitive taxes intended to radically redistribute wealth, to the total abolition of inheritances. We can have a reasonable discussion about changing the status quo at the margin without assuming the implementation of full communism.

They are inhuman, because you want to impose your will and your morality onto others. You are free to help as many people you want with your own wealth.

I guess the fact that you can just call it a “death tax” can easily rally popular opposition even if people would otherwise support it.

It’s my theory that the less words you can use to make an argument, the more powerful it is.

What would really rally popular opposition is the massive massive amounts of spending on propaganda (advertising, etc whatever you want to call it) to galvanize the American public to oppose something like this.

We live in a democracy, but elites still have enough say that something like an 100% inheritance tax is effectively off the table.

A 100% inheritance tax would be a nightmare in practice. Grandma died? Cool, go sell her house now.

Selling the house of a deceased relative seems to be a common existing ritual, no? This objection might be stronger if it were more fleshed out.

I think the problem could arise in the case of things like heirlooms or homes that have been in the family for years.

I think you might also need to write the law so that people could choose to inherit debt on the same terms as their parents. Otherwise, couldn't the bank demand a higher interest rate as a way to force someone off of their property? How does this sort of thing work currently?

Realistically, a law like this (though it would never happen) would be something along the lines of 100% tax on inheritances over 10 million dollars.

> I think you might also need to write the law so that people could choose to inherit debt on the same terms as their parents.

I assumed that this was already the case.

quick e: Yeah, seems like this is already law "Under federal law, lenders must allow family members to take over a mortgage when they inherit residential property"

[0] https://www.thebalance.com/what-happens-to-your-mortgage-whe...

Or go sell the family farm, or family business, etc.

An inheritance tax feels like heaping extra punishment on those who die young or their families. A wealth tax feels fairer.

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