Uh. The debts are paid with the riches before any inheritance is passed on. That’s part of the process.
https://www.dummies.com/personal-finance/estate-planning/how...
My children are not entitled to my estate. My wealth is my private property, not theirs; I am free to direct its disposition as (my spouse and) I see fit. That's the essence of private property rights for the net-positive case.
For the net-negative case, it's a matter of practicality. Your personal debts die with you (they are settled as part of the estate settlement process and if the estate runs out of money, some creditors go without).
If you think inter-generational wealth continuity is a problem now, just imagine how much worse it would be if debt were passed along via negative inheritance.
The kids of Bill Gates and Warren Buffet are getting a miniscule amount of their fathers' wealth - how is that possible if supposedly they have a right to it?
So you have it all backwards. The descendent are not entitled to the wealth of their parents or ancestors. The right to property (including disbursement through inheritance) is given to those that own it! The dollar I earn, I can do as a please with and has already been taxed.
Just chiming in for the 'has already been taxed' thing, as it is often brought up in opposition to taxing inheritance. No dollar is ever taxed 'finally', it's a continuous process that involves taxes in most steps. Say you earn a dollar, it gets taxed and 70 cents remain. You go to a store and want to use those 70 cents to buy something. You don't actually get 70 cents worth of product because of sales tax. (See also VAT.)
> German succession law orders that all lifetime gifts made by the testator within a period of ten years prior to their death is added to the value of the estate. Such gifts are thus also basis for calculation of the forced share.
and a provision like that seems like a clear necessity to prevent people from working around the compulsory-share legislation by just giving their money away before dying. And yes, my understanding (which could be totally wrong!) is that this means that there's effectively a clawback provision on gifts in Germany.
So it's neither "fraction of the estate" nor "fraction of total wealth generated" but a compromise "fraction of what the estate would have been if not for certain actions on the part of the parents".
According to https://works.bepress.com/aaron_schwabach/3/download/ there are in fact such clawback provisions in various European countries (as of 2011, but I don't think that much has changed since then) with different details: time periods, whether you can claw back non-fungible goods from someone who purchased them in good faith from the gift recipient, whether children can officially sign away their rights to gifts at the time of the gift so they later cannot invoke the clawback provisions, etc, etc.
Yes, from a US-or-UK common-law point of view this all seems fairly counter-intuitive. ;)
Define "miniscule".
> how is that possible if supposedly they have a right to it?
Tax evasion 101
Firstly anyone with a brain is gonna conveniently go broke before they die if you try and pull something like that.
Second I'm struggling to find words for just how fundamentally wrong, unethical and dystopian the assumptions that underlie your comment are. I and a hell of a lot of people don't want to live in a society where assuming malice is the default like that.
Just the wealthy. Estate taxes have (in the USA) applied only to large estates.
> on the premise that they probably wronged society
Some wealth is inherited now, but large gains (extracted from the market) are generally the result of exploitation.
> anyone with a brain is gonna conveniently go broke before they die
That's already happening, they call it The Giving Project.
Oops, too late.
I do not understand this sentiment one bit. To think that we should implement equality by pulling people down to the mean is, frankly, insane. That does nothing to help anyone - its a stance based solely on anger and jealousy. Your policy would literally decrease the average quality of life.
Would you be happy if everyone was destitute? At what point do you realize that actual quality of life matters more than perfect equality?
We achieve equality by bringing people up, not tearing them down. If you think we need more tax money to accomplish that goal, I would argue that we have much more of a budgeting problem than a tax income problem, but I understand the sentiment. But to think that the appropriate tax vehicle is to explicitly destroy lives is not an American ideal.
"It can be tough to prosecute some crimes, so let's just punish everyone without due process!"
What kind of bizarre sadism is that?
The people who lived out their days without going broke lose because their property rights are being violated. Their property and their dollars that they have already paid taxes on should be theirs to give away as they see fit.
Children aren't even entitled to their parents money in adulthood. Parents have to choose to give it to them either explicitly or by omission.
If you are against children being punished because of the economics of their parents, then surely you are in support for a strong social safety network for children (universal subsidized/free childcare, including meals, and healthcare), yes?
Which requires taxation or other funding sources.
Which means we must ponder things like: how much of Sam Walton's $100 million inheritance did his children need in order to not be punished by a higher inheritance tax? $5 million each?
The people who will be screwed are the middle class people who's only (if any) windfall in life is inheriting part of their parents house and using that to pay off their own mortgage or send their kids to college or whatever (and who's kids will likely inherit a share of the house and continue the cycle).
Because we can certainly reduce the number of complex workarounds - which were deliberately introduced to allow the rich to have those workarounds. We can increase the taxation rate for the highest tax bracket, like the 90% it once was. And we can increase the estate tax.
The current federal estate tax has an exemption of $5 million. Just how many middle class families do you think would be unable to send their kids to college if the estate tax rate after the first $5 million was increased? For that matter, how many middle class families would be unable to send their kids to college of the exemption were lowered to $2 million? Because $2 million seems like a lot to me.
Poorer people will receive no windfall in life. Since you want people to have windfall ... how do you want to support poor people? How should the children of the poor go to college or whatever?
Because otherwise what you write sounds like a standard wedge argument - get the middle class to fear for losing what little they have, in order so the rich benefit even more, while the poor get left out.
Higher pay via stronger union rights (repeal Taft-Hartley now!), universal college education. These help give your desired economic windfall for the middle class and my desired windfall for the less well off.
The rich and the children of the rich will still be rich.
It punishes those who would have had the assets otherwise. Especially when the stated reason is to punish them.
It's only punishment if you think there is a natural right to control the disposition of property after death. Otherwise, it's just a argument as to why a purely optional benefit not grounded in rights should not be extended by the state.
Not extending a benefit to which there is no entitlement is not inherently a punishment.
Countries that seize this much property don’t do too well economically.
If the children of the mom and pop shop die, and the children are preschool aged, with no other inheritors or people designated to handle the estate, then what?
Effectively no one says that "every generation must completely pull themselves up from zero".
Do you seriously think the children of working/labor class families, living in rental housing, and with no capital, completely pull themselves up from zero?
Since they don't, neither do the children you hypothesis. So what's the point of your argument other than to tug at our heartstrings about those orphans?
Oh, and if the mom and pop shop is bankrupt, or has little capital, and there isn't family or close friends able and willing to take care of the kids, then who will?
Oh, right, "some state system." So if you are so concerned about these children, perhaps we need better orphanages and better support for the foster system.
Now, how do we fund those improvements?
For the record, I don’t think the state taking away most (or all) of a person's estate after they’ve died is a punishment at all.
That is wrong by a factor of ~100. 0.2% of estates in 2017 paid an estate tax. [0]
[0] - https://www.cbpp.org/research/federal-tax/ten-facts-you-shou...
https://ballotpedia.org/Net_worth_of_United_States_Senators_...
(That was for 2011; it's a reasonably safe bet that as a group they're no poorer now.)
It was political will that created the loopholes in the first place. Getting rid of them unfortunately requires more political will than creating them did. This probably has something to do with loss-aversion.
Most certainly the ill-gotten gains must be clawed back. Are you seriously positing that you should keep illegally obtained money because you yourself didn't know?
Punishment is another story, of course it wasn't your fault, so you won't do the time, but you certainly don't get to be rich off the proceeds of the crime.
ie If I rob a bank and leave the money for my kids, they don't get to keep the money when the feds finally crack the case.
Just to be absolutely clear -- it's not reasonable, and what you're suggesting is literally how North Korea handles crime.
"Oh but you know here it's different" -- you're setting a precedent which, if allowed, would mean your family members could face jail time for crimes YOU commit.
FYI this does happen for companies. It's not that wild. Businesses like Lloyds of London and Greene King are paying slavery reparations today despite the fact that no one in the company had anything directly to do with that part of the business. I guess if you had stock that had been passed down through generations you would indirectly lose out on some money if the share price fell as a result.
You're being very emotional about what seems like a pretty clear case of recovering ill-gotten gains.
If somebody sells me a television they burgled from your house, I'd consider the transaction settled once the exchange was made and we'd parted ways. You would probably disagree.
Unknowingly buying stolen property still comes with a risk that if LE ever find it, they can take it away from you without compensating you.
I had my TV stolen and sold to a pawn shop. Detectives found it at local pawn shop and they recovered it for me. These laws exist so that when one is engaged in business, they have to do reasonable due diligence that they are not dealing with stolen or illegal goods.
And yes, punishing a family member for a crime perpetrated by another is, by definition, collective punishment.
Moreover, where do you draw the line? Should all the decedents of german families who got their wealth off the back of slave labor by jews also be forced to forfeit their wealth? What about the decedents of families of plantation owners? How do you go about handling that with the institutions provided? What would they be charged with?
Every law, no matter how small and well-meaning, has implicit threat of prison behind it. You can't be so naïve as to believe that this enforcement action won't result in prison for some, destroyed lives for others, and because laws and enforcement are man-made, there's also a guarantee that your dragnet will punish some innocents, and let some guilty go (maybe because they can afford great lawyers and/or bribes). And of course, because this would be a very controversial measure, it would be highly politicized.
If someone doesn't comply with the court, but that would be a crime committed by the child, not the parent.
There are plenty of laws which don't have an implicit threat of prison behind it.
Here's one: https://www.law.cornell.edu/uscode/text/4/1 . Quoting Wikipedia: "This is a U.S. federal law, but only suggests voluntary customs for handling of the American flag and was never intended to be enforceable. The code uses non-binding language like "should" and "custom" throughout and does not prescribe any penalties for failure to follow the guidelines." - https://en.wikipedia.org/wiki/United_States_Flag_Code
There are laws naming post offices and other objects. There are law recognizing people and bestowing honors on them. There are laws which cancel previous laws.
There are plenty of laws which have no threat of punishment.
But I'll set that objection aside.
Let's go back to CJefferson's comment, to be more concrete. "inheritance should not be a right, when the original money was acquired illegally."
Money (at least as CJefferson refers to) exists because of laws, and the way we think of money exists because of laws. Inheritance is a legal concept, enforced by laws. So the right to inherit millions of dollars by your definition exists because of the implicit threat of prison.
Thus, changing the law as CJefferson describes doesn't necessarily add a new threat of violence - it could change the balance of the existing threat of violence, or even reduce it.
Thus, an argument against changing the law simply because laws carry a threat of punishment is really an argument to maintain the status quo for the existing threats of violence. It is not a strong argument against changing the law, which is what I think you meant it as.
I'm not a libertarian myself, but I miss the libertarianism of Silicon Valley and HN. They are still around, but there's a lot more progressives around and there is a very real authoritarian and violent strain that runs through that movement.
Actual facts show that at this moment in time in the U.S. it's white supremacists and related extreme-right ideologies which are producing most domestic terrorism (i.e. actual violence).
https://www.csis.org/analysis/war-comes-home-evolution-domes...
In addition to the link I shared, both the Department of Homeland Security and the FBI have recently reported white-supremacist aligned groups as the major source of violent attacks (aka domestic terrorism) within the U.S. in recent years.
https://raskin.house.gov/media/press-releases/subcommittee-c...
https://www.fbi.gov/news/testimony/confronting-white-suprema...
https://www.nytimes.com/2020/10/06/us/politics/homeland-secu...
https://www.foxnews.com/us/homeland-white-supremacy-lethal-t...
Are people disputing these facts? Or are merely displeased?
Factual information is nonpartisan.
This is problematic from a variety of practical angles, though, not just mathematical ones. It seems like something the forensic accounting lobby would salivate over.
Should I be forced to defend a lawsuit because my great^6 grandfather owned slaves? (As far as I know, none did.) That’s more abhorrent than legally dumping chemicals that today’s common sense says should have been done differently.
The only think which could in anyway get close to legality would be to:
- Legally hold a case against whoever did it and win it. (Can even legally have a case against a dead person?) This requires thinks to have been illegal when done.
- Requiring that (likely dead) person to pay a fine based on existing law.
- Arguing that whoever accepted an inheritance did inherit the fine, too.
But as far as I know every point of this list has many legally questionable aspects.
But what you MUST NOT do under any circumstances in a state of law is to not base judgement on law but arbitrary "I feel like this should be done" arguments. This is also why it's of upmost importance to fast adapt laws make them general instead of specific and not put any loop holes in them. Because then you can judge people to some degree even if they do something bad even if that specific think wasn't explicitly forbidden. (E.g. based on a generic law which makes any form of causing environmental damage in a context where it's reasonable to assume it the person should have been aware illegal. Sure you need some threshold, too. Else driving your care is illegal.)
I don't see how you could have a criminal trail against a dead person in the US, without violating the sixth amendment. It would be impossible to inform the deceased of the charges, etc.
My father had his own earning, creating, and saving abilities.
Having a period after death for the government to bring charges against the estate seems reasonable. We already have this, but I could see a reasonable person arguing to make it a longer period.
I think it's unreasonable for the same reason getting rid of all statutes of limitations would be unreasonable. At some point, you have to let people stop looking over their shoulder. Society doesn't work very well when you incentivize people to dig up century old dirt on their enemies.