Yes, The Scott Trust.
You can read more about it here:
You can read more about it here:
The original founder of the guardian, Taylor, ran it like a business. While today journalism struggles to make money, in the 1800s news was lucrative.
In his will, Taylor carved out a sweetheart deal (right of first refusal) to sell the paper to CP Scott, a progressive Liberal politician, and also his nephew.
After running the paper for many years, CP Scott's will named his two sons to inherit. Both of whom worked as editors on the daily.
In a freak turn of events, both CP Scott and one of the sons died within a few months. The remaining son was concerned about paying double for the hefty inheritance tax at the time ("death tax").
The death tax could be so large as to force a sale of the paper, to create liquidity to cover the tax. I guess it was a tax on unrealized gains!
The remaining son, John, cleverly found a workaround to avoid the silly death tax: by renouncing his ownership and transferring the business to a Trust. Since he worked at the paper as editor, giving up ownership was a clever tradoff that actually gave him de facto tenure as editor, by making his day job more stable.
This is all to say: the guardian became a nonprofit-like trust at a point in time it was already a stable business, with capital to self-finance.
This was not a case of a independently wealthy businessman creating a foundation to create a paper from scratch (like many created universities).
The Scott trust was created by journalists for journalists, at a unique point in time where journalists had money to self-finance. Motivated not by some idealistic vision but by a more practical desire to avoid a hefty tax on unrealized gains.
Where is the trust created by coders for coders at a time uniquely profitable for coders?
Something similar happened in a history podcast I heard about Porche, which is still owned by the original family. At one point, germany told them their tax on ownership gains is 90%. So instead, they decided they would just re-invest into the business R&D to write off the taxes instead. That gave us the invention of Porche's Racing team. source: https://www.acquired.fm/episodes/porsche-with-doug-demuro
How? You keep the kids in management, you encourage lots of cross holdings between corporations so that even though the kids’ share falls, you enforce power through social contracts in the upper strata of classes that is horrible for shareholders and innovation as a society.
That said Porsche indeed is an exceptional company in many ways in both the innovative end as well as their holdings structure.
> you enforce power through social contracts in the upper strata of classes
Do you have any links that explain this?
I'm planning to visit South Korea so understanding some of the politics is interesting...
Elliott's activist letter to Samsung: http://sevalueproposals.com/assets/downloads/SEC-Press-Relea...
Elliott's presentation: http://sevalueproposals.com/assets/downloads/SEC-Presentatio...
Elliott famously disapproved of the Samsung C&T merger, which ultimately went through. The Korean media demonized Elliott for trying to reform the company. It was an eye-opening experience seeing how Samsung effectively captured Korea both politically and through the media.
McKinsey Report (ctrl-f: "korea discount") https://www.mckinsey.com/kr/~/media/mckinsey/locations/asia/...
Bloomberg report on the Korea discount: https://archive.md/eBJdl
FT Report about cross shareholding: https://archive.md/eYXGM
For all claims of Korea's dynamism, it's still seen as investment rat poison and it's telling that it's still considered an "emerging market" by MSCI. Public markets aside, SK's venture capital scene is, for all intents and purposes, non-existent.
Investors have undervalued South Korea's company stocks compared to other countries, leading to the term "the Korea discount."
This "discount" is in part attributed to corporate governance in South Korea where some companies may have less incentive to grow their share price to pay less tax when gifting or inheriting financial assets.
with analysts saying poor corporate governance is one factor behind what is known as the “Korea Discount.”
But investors often price [Korean shares] below their book value
[Another] explanation is the risk discount because of nuclear-armed North Korea.
To maintain control across generations despite South Korea’s unusually high 50 per cent inheritance tax, they have resorted to elaborate solutions that depress the country’s stock valuations.
At Samsung, heir apparent Lee was sold equity at well below fair value to the detriment of other shareholders. Lee's equity value went from ₩9.5 billion to ₩6.7 trillion
[The Hyundai family owners syphoned value] largely at the expense of shareholders in other Hyundai companies, according to court and regulatory findings that affiliates unfairly supported a company through noncompetitive contract awards at inflated prices.
In general, it's fairly clear that jobs for open source developers is generally more effective than charity of various kinds which is subject to change at any time. (OK, jobs are too but that tends to be less related to political, etc. winds.)
However, is Mozilla a money oriented coder trust?
If you've had any experience with small trusts, they often get captured by self-interested people. The Scott Trust seems to stand out from others with its outcomes.
(I do find some irony in the fact that a majority of Guardian readers these days would abhor attempts by rich businessmen to dodge taxes.)
Isn’t it money that should have gone to the State here, rather than the children? They didn’t do the trust not to give money to their children, but rather to avoid taxes.
It rather depends on what you mean by journalism. I suspect your definition is true to the Guardian's apparent aims, publishing well researched truths to an interested population. What was being published in the 1800s was most certainly not that; instead, being very similar to the current forms of "opinion journalism" that are exceptionally lucrative today.
They are lucrative, but I don't think exceptionally so.
Probably not as lucrative as the despicable academic publisher parasites.
The incongruity of this never crossed your mind?
It’s clear from his post that we need higher inheritance tax, and wealth tax in general, especially on unrealised gains.
Right, absolutely brilliant idea. You live prudently, save some money every month and invest it (stocks, bonds, whatever). Due to factors entirely outside your control like a stock market bubble or an interest rate drop, the $50k portfolio you built over 30 years is now worth $70k. Your unrealized $20k gain is taxed at 10% for easier math. You don't have $2k cash on hand and are forced to sell some of your portfolio to pay the tax.
Next year, there is a crash. You now have just $40k in assets. But there is a gradual recovery, and the year after it's back to $50k. You now owe another $1k. Sound good?
Inheritance taxes invariably are. The recent UK controversy around farm land inheritance was the same.
I feel like a lot of these cases could be avoided if people wanted to structure their family business like a business and gradually transfer control to their children, rather than keep it as personal property right until the very last minute.
I don't know if you're using the word "silly" sarcastically here, but if not, isn't this an example of this type of tax working exactly as intended? John still greatly benefited from his parents' work, and so did society at large to this very day.
That said, having to pay inheritance tax twice over an organisation like this in a short span of time is rather unusual, and arguably, a bit "silly".
But of course, it is not death and loss that it taxed, it is rather the accumulated wealth being redistributed over both society at large and the heirs, in some kind of ratio. In favor of inheritance tax: the wealth somebody amassed has also been thanks to its participation in society, so it is only fair some portion of it goes back to society. The heirs played no part in it, so why should they get any, let alone all of it? Furthermore, inheriting wealth goes against the idea of meritocracy, and maintains inequality in an unfair way in modern societies. Why should inheritance tax not be 100%?
Children often grow attached to the 'stuff' their parents have collected, be it things or land, houses or money. It seems unfair to take it all away from them, as they feel they already 'own it' merely by being their children. So inheritance tax is some kind of compromise.
However, as each generation these days tend to fully 'break' with their parents, in a way (economically, spiritually), inheritance itself seems more and more like a thing of our tribal pasts. I imagine a future where there is no inheritance tax anymore, because the whole concept of inheritance will go away.
Imagine having nothing, your parents dying, you, an eg. broke college student inheriting a 2 bedroom apartment, which is somehow worth $1mio, and you owe so much tax (that you can't pay) that you're forced to sell the apartment, the only place you've ever known.
With 100% inheritance tax, i'd literally stop working as soon as i reached enough money to retire. Why work harder if it all vanishes when I die, and my hypothetical kids gain nothig? Or, more realistically, i'd convert stuff to cash and give it to them without the government knowing.
Tax the income, close the loopholes, once the tax for something is paid, the rest should go to the person, the government has got its share, it has enough.
And i'm saying this as someone who already lives in a country without inheritance tax (in most usualy cases).
Everyone that inherits fortunes from their parents get to live life on easy mode while every one else is poorer, with less assets and barring winning a lottery ticket, no way to ever catch up. Wealth creates a feedback loop that if gone unchecked will hoard all assets from everyone else.
We can't have both meritocracy and inheritance as they are mutually exclusive. If we want to keep telling people there's any modicum of truth to meritocracy, we have to stop all this inheritance bullshit. The particulars of it can be discussed with caps based on amounts, for example, but that's not the point.
There's a reason that most wealthy people from the past are still wealthy today and I can guarantee you it's not through their own merit.
Tax wealth, not work. There should be no billionaires.
NB. This does not mean that Inheritance should be a taxable event! There would be less need to have inheritance tax if we had a consistent wealth tax.
It remains obvious to me that inheritance drives social inequality, and similarly it is obvious that parents are going to resent not giving their children as much help as they can.
But it's one of the very few wealth taxes we actually have today...
Yeah, there are a few very well defined loopholes - gifting early, pension wrappers, some trusts, agricultural land, non-dom etc etc - some are being closed. In general the richer you are the more likely you are to be able to minimise and avoid the tax.
These moral judgements aren't great ways to make economic decisions. A billionaire can just be someone who owns a lot of shares in a company that's currently valuable. A company's value (in this sense) is just the total number of shares multiplied by the last share sale price.
It doesn't mean they have a billion dollars in cash. The billions don't even exist. They're just a value based on the last transaction value of the company's share dealing.
I can borrow money for a house even though I don't have money to buy a house.
In my experience, a lot of people who make these kinds of extreme claims (no billionaires, no inheritance, etc.) do not seek plausible economic solutions, they only want the moral high ground.
That statement is in no way moral. Not sure why GP assumes that. It's simply not beneficial to society for small groups to accumulate disproportionate amounts of power.
But as always, we have some "future billionaires" rushing to defend them.
Power and money aren't the same thing. Someone who can throw you in jail or stop you getting on a flight can be on a very low wage indeed.
> But as always, we have some "future billionaires" rushing to defend them.
This would be considered one of those attacks you just mentioned.
Kind of are in a capitalist society. Sure you need extra steps but it's still power. No need to go far... Elon is living proof of that. Other billionaires do the same but they don't need all the attention.
You're arguing you don't necessarily need money to have power but if you have money you absolutely do have power, which is my point.
> This would be considered one of those attacks you just mentioned.
I know... I couldn't help myself to hit back at a useless comment.
Normally the monarch or the Socialist dictator or the lord of the land controls the money and the power.
> A capitalist democratic society is about the only type I know of that tries to separate money and power.
But when I read this I can't help but think the same utopia is under capitalism.
In theory there's a separation. In reality billionaires can purchase politicians, media, etc. and get power through those means. I have never seen an example of this not happening.
If there were any effective ways of stopping money from meddling with power I'd agree with you but reality always smacks theories in the face. You say it tries to separate them but then you have lobbying (or the non-legal version of it) in every government as an example. It's an utopia just the same.
Whether they're kings from "divine right", corrupt nepo babies or even legitimate geniuses. Nobody should have that much power.
There's a big difference between money: voluntarily trading value for services and goods, some of which might negatively affect you, and power: trading nothing for direct control of aspects of your life.
[0] Not inappropriate power, or not in theory
But what is wealth? And when should you tax it?
Let's say I take a piece of duct tape and a banana and ducttape the banana to a wall.... how much tax should I pay for that? I mean... how much could a banana cost?
If i sell that "art", for example for $6.2M (yes, it sold for that much), then sure, i did my "work", earned $6.2M, and in the current system i'm taxed for my "work" (well.. income for my work).
So, by your logic, when should I get taxed? And for what value? The net worth of that banana on the wall is $1, so should I be taxed on that value? But if someone wants to pay $6.2M for that, should my tax change, even before it's bought? Do I get my taxes back if he changes his mind?
What if instead I start a small company named Sava (a river nearby) that sells books. Do I get taxed now, when the value of the company is $10k in books in the warehouse? What if someone believes in my company so much, he wats to buy 1 millionth of my company for $1000, should I be taxed on the theoretic value of my company (1B now)? Or should I be taxed only when I actually sell that stock and earn the money?
Yes, life is not fair, kids of rich parents start with a lot of money. My parents were not rich, but believed in the future of computing and bought me (a kid back then) a computer in the time when you had to take out a loan to get one. My friends parents bought him a motorcycle. I'm an above-average paid 'developer' now and he works minimum wage in a factory. So, should i lose something or have to pay something back, because my parents made better decisions than his?
Instead of focusing on taking away stuff where the taxes were already paid, lets rather focus on people like bezos paying the same amount of taxes as other businesses do, like mom and pop book stores (i'm talking percentages, not net values), and to stop the abuse of every goddamn tax loophole they abuse now.
I don't deny it's very tricky and people will absolutely do their best to dodge as much as possible, but that doesn't invalidate the purpose they serve. You can't claim those hundreds of properties you have are worth $1.
I'm by no means an expert but my idea would be to tax rich people yearly after a cap. We don't want to tax workers but the whole swath of parasites that simply extract from society.
Your company example is odd. Can you lend based on your theoretical valuation of $1B? Then perhaps we tax if you do. I don't know all the answers off the top of my head and neither should I.
That doesn't mean we let people accumulate wealth infinitely. It's a problem and there's no way to ignore it. The more wealth is accumulated, the more they accumulate and for a lot of assets it is literally a zero sum game. If they own everything, we own nothing.
Posing edge cases and possible dodge scenarios like you did is exactly what a politician should be spending their time on when proposing these.
> I'm an above-average paid 'developer' now and he works minimum wage in a factory. So, should i lose something or have to pay something back, because my parents made better decisions than his?
Not more than what's fair. Unless you're secretly a multi-millionaire, this wouldn't ever affect you. I don't understand people's fears of taxation on the super rich when they aren't even close to that.
These taxes are not for working people. If you don't live off a trust fund from daddy you probably don't have to worry. Well, if we're being honest, this will never happen because they own the politicians too... but a man can dream.
Perhaps. However an extremely high inheritance tax is an irrational way to do that. It would incentivize everyone to spend all their money/wealth before they die e.g. directly or just by selling all their property and buying an annuity.
A massive increase in consumption wouldn't necessarily be the best outcome. Though I do see some benefits.
> we have to stop all this inheritance bullshit.
That would only work if you ban parents from giving any gifts or financial support to their children. Which is a very slippery slope...
Governments look holistically at their tax revenue. If there is an inheritance tax, and they expect to get a certain amount of revenue from it, then other taxes will be lower to compensate.
And vice versa: if an inheritance tax is producing revenue, eliminating it will result in higher taxes elsewhere. This is one reason such a tax continues to exist. Inheritance taxes tend to have very high exclusions so most people don’t pay them. And getting rid of them looks like charging everyone else more in order to lower taxes on the rich.
I just wish there was as much scrutiny on how the funds are used and as much creativity on getting as much as possible for them as there is scrutiny on how much each of us should pay and creativity around how to tax us more.
It’s not only perverse but completely anti-human.
Presumably this 100% tax would also apply to gifts cause otherwise it wouldn't really work but where does it stop? Parents can't pay for college? Buy their children a car? Go on vacation with them? Spend any money on them at all so that they would "stand on their own two feet"? Be banned from giving any financial support to their children when they reach 18?
I mean... it's an obviously not a good idea.
Also the most optimal strategy would be to spend all the money you have in addition to getting a reverse mortgages on any property so that by the time you die your net worth would be as close to 0 as possible. Or just selling everything and buying an annuity.
A lot more volatility, without a (or much smaller one) buffer most economic shocks would have a bigger impact on the economy.
Also there would still be a lot of inequality it would just be intra-generational.
Then again.. all the annuity money has have to go somewhere. So maybe the insurance companies would become the primary sources of investment capital (which wouldn't be great). A lot of uncertainty though i.e. buying a house if you have a family would become much riskier..
I also don't see why buying a house would be much riskier? If you buy a house for your family it's because you either prefer the lifestyle or think it provides economic advantages over renting. Given you only need housing when your alive, I think what happens after you pass is not as major a concern as presented.
A source like what? I don't think there are many studies refuting bizarre not well thought out policies. Also it's pretty hard for me to argue against a suggestion that's so ill defined.
Albeit a massive increase in consumption and a reduction in savings would be the most obvious outcome (with all the implications of that).
> after you pass is not as major a concern as presented
Therefore there is no point for you to own your house. When you get older you either get a reverse mortgage or don't buy property in the first place. There would be no rational reason to own property beyond a certain age.
So what if there is no reason to own property beyond a certain age? Even if we take this claim as true... that doesn't explain if this is a good or bad thing.
I don't, because this argument is nonsensical (I mean your point about source specifically). Unless you disagree with some of the core principles of modern economics (not saying that you have to agree with them..) that would be the most obvious outcome.
> So what if there is no reason to own property beyond a certain age?
Well that would mean that the savings rate would go down (for better or for worse).
For example, you are asserting there would be 'no reason to own property beyond a certain age'... which isn't supported, and then jumping to the conclusion that that would lower savigns rates.
None of this is clearly true, just supposition.
The general consensus amongst most economists is that humans behave in a rational way? Not spending all the wealth you before you die would be irrational if your children won't inherit it.
Of course in reality that's often not the case especially these days so it might not be sufficient enough.
> clearly true, just supposition.
Well by such standards every discussion on any policy that hasn't been tried is meaningless because there isn't any empirical evidence.
Sure, but that's only one small aspect of the economy.
Maybe younger generations would earn more with all the spending and save more knowing there is no inheritance coming.
You only look at one aspect, claim you know what would happen, and the proclaim yourself right.
I can want my children capable of providing for themselves.
I can also want improve their situation beyond that.
Because that is completely unworkable IMO, for several reasons:
1) Unless you introduce comparable "wealth transfer"/gift taxes, it becomes completely meaningless for the average case.
2) This would be insanely harmful in cases of unexpected deaths; inheritance is a really bad compensation already when someone close dies, this would make it even worse. And dealing with any kind of shared assets would be a nightmare, too (father dies, mother has to pay tax on half the house?)
Could be workable with large allowances though, but I don't hink you would ever get this pushed through in a democracy because it is too easy to put negative spin on it (even if it was in the majorities economical best interest).
I don't think that inheritance tax is a bad concept, but setting it higher than the gift tax rate is actively harmful and would not achieve anything.
My main point is that setting it higher than gift tax rates is effectively pointless, and basically just punishes people for dying unexpectedly (and/or not planning ahead for their own death), and neither is desirable.
Like US$13M ? That is the current situation in the United States.
I still think this would have mainly negative effects if the gift tax rate is lower than inheritance tax anyway.
It is hard to take this seriously. Are you seriously suggesting that the threshold is set at this level because of unpopularity rather than the power of the extremely wealthy? Have you looked at how the threshold has changed over time, and why?
How does that make sense? In theory only the extremely wealthy have to pay the tax (not that they necessarily do that). In what way would it being so high benefit them?
That said, sure, you're right. But why are you right? I would suggest it is because we live (in the USA, among other places) in a culture that strongly emphasizes the right to pass along generational wealth. But this is not universally true across time and space, and our culture took a different tack (say, by quoting august Republican figures from the late 19th and early 20th centuries), the popularity or otherwise would likely be entirely different.
A flat 50% rate still extract much more value from the rich, but apply equally to the poor.
My perception is that hereditary wealth transfer is about as universal and it's phenomenon get when it comes to humans. Not 100%, but close to it.
I absolutely think that significant estate tax is an unpopular concept-- significantly more so than income taxation. A big factor is perceived "double-dipping"; there is some additional justification though because it seems very unlikely to me that less wealthy people could avoid this tax with the same effectiveness as 1%ers (who in many cases probably avoid paying it completely).
I fully agree though that the extremely wealthy leverage their power very effectively to prevent legislation that would affect them negatively-- a very clear example would be basically all of Trumps past and present tax policy, which you could IMO summarize as "tax cuts for the rich" without being too disingenuous, but which is absolutely NOT portrayed like that in mass media (and not perceived accordingly by most of his voters, which get diverted with "no more tax on overtime!" instead).
What? That is completely wrong.
If you gave the populace the option of massively lowering their income tax by slightly upping taxes on anyone with assets exceeding.. say.. $15 million, and massively taxing anyone with assets exceeding $100 million, do you think they'll cheer for the status quo or for lowered income taxes?
Inheritance taxes don't sit well for many reasons that are actually interesting to discuss
+ People's desire to support friends, families and personal interests is a core reason for an individual to work beyond individual self sufficiency. This makes it very easy to empathize with the millionaire impacted by gift / inheritance taxes that may never be applied to you.
+ Taxes have already been paid on this money - double dipping is very easy to cast as unfair.
+ Clumsy implementations of these types of taxes create situations where small family owned farms and businesses need to be liquidated to cover taxes causing more pain and disruption for families.
+ The constant slippery slope of taxes initially targeted at 'the rich' but over time effecting more and more people due to combinations of inflation and revenue seeking.
+ The simple fact that if the US just seized all the wealth of 800+ billionaires today - it would only be worth 6.2 trillion dollars [1], which doesn't even cover the 6.8 trillion dollars the government spent in 2024. So what do we do next year?
Do we need more revenue? Are we getting the revenue the right way (aka is everyone paying their fair share)? Maybe... But there is certainly a spending problem too.
1: https://inequality.org/article/billionaire-wealth-keeps-grow...
The US estate tax specifically got basically bigger exemptions every time it was touched (even adjusting for inflation), and returns have been falling precipitously for basically the last 25 years. If you own less than $13M at death, it does not affect you at all right now.
> The simple fact that if the US just seized all the wealth of 800+ billionaires today - it would only be worth 6.2 trillion dollars
Sure-- but I think this is a bit of a strawman. To me, and a lot of people that argue in favor of wealth/estate taxation, the purpose is not to substitute income taxes (like what Trump wants to achieve with tariffs)-- the goal is to get wealth inequality back under control, not to balance the government budget with those tax returns.
Another perspective on wealth distribution is that the top 1% own a third of the country. In my opinion, if you have enough wealth (and liquid enough wealth) to outright buy an average home at sticker price, then you are part of the problem;
I absolutely don't want to compete with people like that on the housing market, and I don't want them to extract excessive rents from people like me (i.e. not-1%ers) either, but thats exactly what happens right now.
> But there is certainly a spending problem too.
I don't really agree with this. I think (expected) government responsibilities have grown tremendously over the last century (mainly for good reason).
I'm confident in saying the the American-favored approach to healthcare ("everyone takes care of it on their own, and negotiates/pays for it by himself") has completely failed for IMO very clear reasons (demand for healthcare is inelastic and only government can force pricing transparency, prevent collusion and a generally fair provider-market in the first place-- obviously).
I'm also confident that shifting back more pension responsibilities onto citizens themselves is also a bad idea, because it creates extremely bad potential outcomes in case of an economic crash. Government providing a survivable social security baseline is just a very clearly good idea to me.
Those two points (healthcare + social security) account for the vast majority of government budget, I think they are basically a good idea, and cutting costs with foreign aid, research funding, environmental regulation/enforcement etc. has IMO neither the potential to save significantly in the first place, nor is it beneficial to do so by itself (I'd even go so far and call the whole doge initiative a thinly veiled propaganda department for the current administration).
The fact that the income being taxed is "beyond individual self sufficiency," actually makes it easier to justify taxing. This isn't someone's food budget--it's the extra on top after one's life is fully funded.
> Taxes have already been paid on this money - double dipping is very easy to cast as unfair.
This argument has never made sense. Money gets taxed over and over. It's not like a dollar bill gets taxed once and then you mark it with a pen so it never gets taxed again. Money typically gets taxed when it changes hands: Your company pays you money, it gets taxed. You buy something from a store, that money gets taxed. The store owner issues a dividend to shareholders, it gets taxed. The shareholders get bank interest from that money, it gets taxed. There's nothing unusual about taxing a dollar over and over.
> Clumsy implementations of these types of taxes create situations where small family owned farms and businesses need to be liquidated to cover taxes causing more pain and disruption for families.
This is a sentimental-sounding trope that doesn't really happen in practice. In the USA, inheritance income under $13M doesn't even get taxed at all. This is well outside of the scope of "small farms and businesses." Inheritance, in fact, tends to benefit recipients tax-wise: An heir is allowed to adjust the cost basis of an inherited asset to its market value on the day of the previous owner's death, so that all the previous owner's unrealized capital gains never get taxed. Sitting on $1M of capital gains from your meme stock that you don't want to pay taxes on? Just leave it to your kid in your will--those gains won't be taxed!
The other commenter addressed your other two issues.
And media is typically not controlled by people owning <$15M.
If you wrap things nicely in populist rethoric and act in the best interests of media owners (i.e. the rich) then detrimental (for the median voter) changes to tax code are trivial to push through. Just compare the 2017 TCJA act, or the current lunacy-in-progress (essentially replacing progressive tax rates with regressive tariffs).
Sure, it would be easy to make people cheer for additional significant taxes for 1-percenters, but that does not really matter because its not gonna happen.
Or get them stuck in a permanent debt cycle.
> the inheritance tax would be the only tax if it was total; there would be no other tax burden in one's entire life.
Wouldn't everyone be incentivized to spend as much as they feasibly can before they die and not accumulate too much wealth?
I guess it depends on the specific implementation but the optimal approach would be to take on as much debt as you can to keep your effective net worth close to 0. So even a 100% tax on that might not result in a lot of revenue...
All the rest is quibbling about logistics. Yes, we know rich people are very good at hiding their money.
However, I think the grandparent post refered to Great Britain since the paper in question is english.
"Your view about each generation tending to fully 'break' with their parents, in a way *strikes me as particularly narrow*. "
I then added examples of vast populations where sons don't isolate from their parents.
That's fair in principle. Yet in this case but his brother didn't really have enough time to accumulate that much additional wealth after inhering it from his father so it's a bit of a lottery.
Also inheritance taxes are quite tricky to enforce and it's very hard to close all the loopholes (also the revenue isn't exactly reliable). IMHO a wealth tax seems like a better idea (then again there are quite a few complications as well as Norway's recent attempt has shown...).
> because the whole concept of inheritance will go away.
I fear the opposite. As property prices continue increasing and middle and lower class incomes stagnate inheritance might again become one of the few ways that are left for the majority of the population to attain and any significant wealth (I mean middle class level i.e. a hour or two). Birth rates also being so low might make it even more significant.
The value of that property increases when others in the society prosper. Government programs funded by “taking people’s money” (aka taxes) very often make “private” property more valuable.
People with the “f*ck you, got mine” mindset either don’t get this or selfishly don’t care (sometimes for understandable reasons, e.g. they come from a low trust area).
Of course, there are lots of nuances and complex implementation details. Like how much exactly does a specific program affect different groups and on what time scales. But the fundamental principle is straightforward and essential to a healthy society.
But claiming the government has to force people into this is low-trust to the extreme. It's saying "we're going to take these things we already taxed you on, because you can't be trusted to use them responsibly and we can."
You can't regulate your way into everything. Good government can only exist alongside the unwritten rules that made people like Carnegie decide that the right answer was to give their wealth away to the public.
Where do you delineate this worldview from a simple extortion shakedown? e.g. your house is more valuable when it isnt on fire and your family isn't dead.
It still leaves the question of what is an appropriate tax to pay for social order? is it 100%?
And it also argues that some sort of governance structure is always present — official and explicit or implicit and unintentional - so we might as well try to make it a good one.
The details can and should be debated and discussed. The project is never over.
- Roy Jenkins MP
So similar to current situation in many places - if you are rich enough, you basically exist outside of tax system, be it capital gains, investments, inheritance etc. Obscure tax structures spanning whole globe as ie Panama papers showed. Its the middle class that gets hammered out of existence, ie in France its around 40% for inheritance tax, and trusts are AFAIK forbidden / treated very punitively. Very rich still bypass this and everybody knows this, everybody below not so much. Its not even effective there, the amount extracted yearly in such way is minuscule, but it pleases crowds with 'social justice' so they don't protest so much and burn more cars on streets.
As I said in the comment you're responding to, this seems like an example of how this type of tax worked correctly for a very rich person, so the thread you're responding to is already a counterexample to your argument.
I agree that inheritance taxes can be implemented poorly. Still, the concept of an inheritance tax is good, and poorly implemented inheritance taxes should be fixed by improving them, not removing them.
https://www.gov.uk/government/news/what-are-the-changes-to-a...
The reason farms are worth so much at present, despite low margins, is because of the inheritance tax loophole that was introduced in the 80's, at the behest of the landed backers of the Conservative Party. This turned farmland into a prime investment vehicle as a way to shelter assets from inheritance tax.
Is the proposed change (and thresholds, plus half rate with interest free payments spread over 10 years) perfect? No - it'll still catch some small family farms - but it's telling that the highest level of opposition has come from some very wealthy landowners, such as those using their "farmland" for grouse hunting, rather than making food.
The tax break in the 80's was a textbook market distortion, if we believe in the power of free markets, the value of the farmland will now fall, which means fewer family farmers will need to pay inheritance tax.
In truth, my concerns are primarily around business property relief, since I think it is there that the damage will be both more significant and less visible. Many businesses carefully built up over years will have no option but to sell off a chunk to private equity to pay the tax liability. Is it a surprise that the gov come up with such policies when Rachel Reeves thinks that the finance industry is going to fire up growth [1], when they are the rent seeking parasites that are suppressing it. The fox has been invited into the hen house and getting to dictate policy.
[1] https://www.gov.uk/government/news/chancellor-backs-britains...
If the business is going to be a going concern for many years, then proper estate planning should be part of any careful running of a business. Passing it on 7 years before death is the most obvious play; yes, actuarially there will be some people who die before the 7 years have passed, so doing it early is important if continuity of the business is important.
These amounts are per-child, which means you can double them up if there are two children.
Median patrimony in France is 175 000€ per household, so your typical middle class family with two children ends up paying no inheritance tax, without having done donations in advance.
I have an unmarried aunt with no kids. Most of her estate is land (that has passed through centuries in the family and is almost illiquid because the European Union has killed agriculture) and some stock (that cannot be used to pay the taxes because it's not yours until you pay the taxes). I just checked and when she dies, my mom (her only sister) will have to pay 45% of that in death tax. We may need to turn down the estate when she dies because we cannot pay the tax. And you think that's fair? Grow up.
My parents are upper-middle class, and I've profited from their wealth all my life. My inheritance will be taxed, and I don't find that unfair at all. I was born on second base and had an advantage over others at every stage of my life; it would be fatuous to complain about an inheritance tax.
https://medicine.yale.edu/news-article/how-genes-shape-perso... https://human-intelligence.org/intelligence-is-genetic/ https://www.technologynetworks.com/genomics/news/beauty-may-... https://pubmed.ncbi.nlm.nih.gov/23925498/
I'm sorry, I don't think I understand the exact point you're making.
I follow the premise of your argument. You're saying genes are a birth advantage, just like money is. I absolutely agree with that. But I don't understand how this ends in "just the guy who's dumb, ugly, always ill" being "hammered if he or she happens to make some real cash."
FWIW, in many Western countries, healthy people are already functionally "taxed" (although it's often not technically a tax) more than unhealthy people because both pay similar amounts into healthcare but derive different benefits from it.
I also think that's good, just like taxing inheritance is.
Also, taxation isn't stealing. But if you genuinely feel that it is, you have the option of moving to a country with no functioning government. The Somali government, for example, has effectively no ability to collect taxes in most regions.
Also - at the end of the day, someone is still getting something that they "didn't earn" - why allow it at all? Tax everything at 100% on death - why give people who didn't "earn it" something?
Obviously I'm being fascicious about this now, but if the argument that it's "unfair" for people who "didn't earn it" to get something, why allow this at all?
And also, personally - I think the argument is flipped on its head. It's not about people getting the inheritance - it's about people "giving" it - I paid taxes on my money throughout my entire life, why should the state take any more just because I'm leaving it to my children?
(and, on a side note, where do you get that you can give unlimited tax-free money to your children in almost every country of the world? I checked the US, France, UK, Spain, Morocco, South Africa and Brazil, and all have limits after which tax apply. China and the Philippines don't, but neither do they have inheritance tax.)
I'm Polish and Poland doesn't have any inheritance tax for children, not sure what US has to do with this.
>>I checked the US, France, UK, Spain, Morocco, South Africa and Brazil
Did you really? Here a UK page about this, there is no limitation on how much you can give your children tax free, tax only applies if you die within 7 years after gifting it:
https://www.gov.uk/inheritance-tax/gifts
And
Raisin UK https://www.raisin.co.uk Gifting money to children explained (2025)
>>Limiting the snowball effect of the wealthy getting wealthier generation after generation through no contribution of their own is considered a societal good
Again, so please tell me why you don't think we should be taxing it at 100%, to maximise the societal good?
I already pay effective rate of 40% of tax on all my earnings - am I not doing enough for "societal good"?
Also, again, the thresholds are ridiculously low. They don't even cover the cost of the deceased's house. Stop the theory, start the reality.
I am sure the average 99%-er American would love to be back in medieval Europe, where kings and queens, and lords and dukes cared so much for their offspring! Wealth by birthright, that's so progressive!
If you don't want to pay taxes, don't be a part of society, don't use public roads, public schools, public hospitals, and public education.
If you do want to be a part of society, accept that it's a give-and-take situation, and move on. Some people give more than they take, and some people do take more than they have given, and that's alright with me.
Side rant:
It's no wonder that a show like Breaking Bad, where a teacher gets cancer and has to become a drug kingpin to finance his healthcare, has to be situated in the US. The plot simply wouldn't hold in any other civilized country.
It's no also wonder that the name Luigi is no longer only the name of Mario's brother but synonymous with something else, and again something that happened in the US.
Agreed with you! A progressive tax (the more you earn, the higher % you get taxed) makes sense as a fair thing to me.
Where I am from, it's 52%, and that's a reasonable price to pay for having bike paths, greening, parks, good roads, affordable public transport, great public schools, and paid time off and maternity/paternity leave.
Once there was a strike of the public sanitation workers in my city due to their low wages. You know what happened? In 2 weeks it changed from a beautiful place to live to a cesspool. Don't know about you but I was happy to spend some of my $$ so I didn't have to fight rats, rabid dogs and mountains of garbage to take my kids from school.
As a matter of fact, once somebody reaches a certain amount of wealth, I'd be very much in favor that it should be 70%, 80%, 90% and 99%. And, of course, then you get the prize "you won capitalism, now relax".
No, that's not how any of this works.
https://scienceexchange.caltech.edu/topics/voting-elections/...
Politicians' campaigns are usually funded by large corporations and individual donors, not by public money.
> Not so long ago, people paid the tithe (10%) and if any lord,
The current right wing governments are trying to bring us to that time, it seems.
> There's many countries in the world with smaller taxes and still great service
Name a couple.
https://worldpopulationreview.com/country-rankings/standard-...
Luxembourg - 42%
Netherlands - 49%
Denmark - 42%
Should I go on?
There are cases that can be imagined (a child inheriting an old house in a high-COL location) where it feels unfair, but in this case it sounds like free money. Surely the government is not asking for more money than the land is worth, or something like that?
One thing I can assure you: the moment you get a job, a house, a family, that's the moment you'll realize you are being systematically robbed by taxes that end up eating 70% of your income. If you are not socialist when you are young, you haven't got a heart; if you are not conservative when you grow up, you haven't got a brain.
It's funny to me that you both think that "benefitting society" is "communist propaganda" and that others need to start thinking for themselves. Who are these communists spreading this duplicitous propaganda of considering the well-being of others and the betterment of our community? I need to find them to thank them for their service and also scold them for being bad at communism.
>One thing I can assure you: the moment you get a job, a house, a family, that's the moment you'll realize you are being systematically robbed by taxes
I have all that, and I still care for people other than myself and my family.
Where does the water from your tap come from?
Where did you or your children go to study?
Did you make your own road, that you use to go to work?
Do you have a pension built up?
Do you fight your own fires and fight your own crime?
If these organisations were private, waste would be equivalent, but they would lose the mentality of acting in the public interest, and there would be a profit margin taken off. I'm pretty sure it would not be an improvement overall, purely from a viewpoint of efficiency.
If you don't artificially curb wealth accumulation with laws, taxes and wealth limits, you will always and inevitably end up having an accumulation of wealth that allows the rich to stay rich forever, and keep the rest perpetually in poverty. I have consistently been in the highest taxable bracket in my country, and am happy to contribute even a bigger % of my wealth towards the betterment of the living conditions of my country and city.
Sauce:
- https://ifs.org.uk/articles/inherited-wealth-course-be-much-...
- https://www.weforum.org/stories/2018/08/moving-up-the-income...
> The gap was most pronounced in the US: less than 10% of sons with low-earning fathers made it into the richest 25% of the population, while almost 50% of those with top-earning fathers grew up to become high earners themselves
Talk about "self-made". History has shown again and again that this can only go on as long until the poor and oppressed rise up, seize the wealth, and in the process, harm their "oppressors".
The rich through times always have had the delusion that their wealth will protect them and isolate them from society, with their private armies, private healthcare, private tutors and expensive villas. But if anyone looks at history, it always ends up the same way. Based on that knowledge, it's the rich that should be actively supporting equality and progress in society as if their lives depend on it.
I'm more than happy to pay my taxes and ensure everybody else has a good life, too. I don't want to find out first-hand how long a head survives without its body still attached to it.
e.g. https://en.wikipedia.org/wiki/Andrew_Cavendish,_11th_Duke_of... "Devonshire inherited the estate but also an inheritance tax bill of £7 million (£303 million in 2023), nearly 80 per cent of the value of the estate. To meet this, the Duke had to sell off many art objects and antiques, including several Rembrandts, Van Dycks and Raffaello Santis, as well as thousands of acres of land"
Maybe it could have been easily circumvented, but it wasn't circumvented in this case. It obstructed direct inheritance, thus, worked as intended for the rich.
In the tax year 2021 to 2022, 4.39% of UK deaths resulted in an Inheritance Tax
Inheritance tax only kicks in above £325K of assets. If inheriting your parents home the threshold increases to £500K (and increases again to £1M if both parents die).
That's hardly hammering the little people.
https://www.gov.uk/inheritance-tax
https://www.gov.uk/government/statistics/inheritance-tax-lia...
Agree. It hits the (upper) middle, as with most of the tax code afaict.
I rarely resent paying tax until I see how little people earning multiples of me get away with paying.
In the case of inheritance tax, it has resulted in a lot of British cultural treasures being shipped to the US to be auctioned.
weasel words if ever there was.
OTOH... Elon and Donald had gobs of cash drop in their laps, what's not to like about reasonable taxes on it ? Split it (say) 50-50 with society. Unless you have found an infant with a track record of accomplishment - and an investment strategy to match.
The same kind of logic was applied to two french newspapers:
- Le canard enchaîné, created in 1915, specific status preventing sale of capital made in 1958. Motive was foiling an attempted takeover by another company.
- Mediapart, created in 2004, trust made in 2019. They made the change deliberately in order to protect the newspaper's future.
Both newspapers are doing well today, so I'm not sure this kind of thing is a product of its time and impossible to copy nowadays. However, both newspapers are producing quality investigative journalism, which most news media don't these days.
It's a tax levied on those who get a completely free/undeserved sudden windfall; in the sense that they did not do anything to obtain it and didn't even have to expose risk or pay for a chance.
Most nations put pretty serious taxes on earnings from lotteries, and an inheritance is like a lottery where you didn't even have to pay for a ticket.
There's no obvious objective truth about the idea of taxing inheritance. But calling it "silly death tax" is, oof. Idiotic. Cut it out.
Declare the pennies on your eyes
One of the punchier Beatles songs, good riff.
Huffing and Puffing about paying taxes when you do a thing _just_ because the thing you are doing, you do with money you already paid taxes on - is a crazy idea. So crazy, nobody does it even though that happens all the time. Except, apparently, inheritance tax.
You must really hate taxes on fuel or cigarettes too, and sales tax of course.
Similarly, this:
> but you decide that you have more of a right to direct those assets for them.
Is quite the statement. That is what governments do all the time. You want to do a thing, they tell you: No, you cannot do that. If you fail to comply, we will punish you. For some countries, all the way up to and including murdering you.
Government dictates and you agree. That whole 'monopoly on violence' thing.
In this case, government has some thoughts on how you should spend your money as you are shuffling off your mortal coil. It suggests you spend some of that on general things the country as a whole wants funded. It very strongly suggests it. Insists, really. Kinda like how it insists you wear a seatbelt.
Yes. I'm not against taxes in general, but I think our tax system is a monstrosity. No, I don't have some kind of alternative, I just grab my ankles and grit my teeth like everyone else.
> That is what governments do all the time
Oh, well I guess it must be fine then. Is this supposed to be an argument?
https://en.wikipedia.org/wiki/Scott_Trust_Limited
Bozo could easily establish a similar trust to support the Wash Post in perpetuity. But clearly he has other motives.