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I believe this is the inevitable outcome of the following: 1. The desire to maximize personal capital and assets. 2. An individualistic mindset 3. The compou
by tabeth 9y ago
I believe this is the inevitable outcome of the following:
1. The desire to maximize personal capital and assets.
2. An individualistic mindset
3. The compounding effects of (1) and (2).
With all three, you get the current problem as described in the article. Suppose you removed (3), and somehow you could maximize assets, but upon death (or some other "big" event) all of your assets were given to the community. This would result in wealth not being concentrated. Here I'm also including the creation of foundations and other "charities", which in my view are just ways to keep your assets concentrated, and you have some tax advantages of doing so as well.
Say you removed (2). Wealth concentration without the desire to personally benefit from it would result inevitably in the helping of others, as a healthy, prosperous world would ultimately benefit you (though, again, its not the goal). After all, what's the point of money if it doesn't benefit you? You might as well make the world you live in better.
Without (1), you naturally would not see the problem described in the article.
So, what's the TLDR? Basically,
1. Create a culture where people don't need to be so prosperous themselves.
2. Encourage schemes that benefit everyone instead of someone.
3. Prevent the concentration of wealth, and all of its pseudo-forms (foundations, real estate, etc.)
- pc86 9y agoHonestly, this seems grossly un-American at the most basic levels. A 100% tax on the estate upon one's death? Legal prohibitions against the purchase of real estate past a certain point?
- tabeth 9y agoWhat do you define as "American"?
- ytNumbers 9y agoEqual opportunity. Not equal outcomes.
- adrianN 9y agoHaving rich parents counts as equal opportunity?
- ytNumbers 9y agoIt sounds to me like unequal outcomes carrying on from one generation to the next. Despite that, everyone has the opportunity to improve or worsen their situation in life.
- zip1234 9y agoWealth generally dilutes over generations naturally through spending, mismanagement, splitting among more people, or just bad luck.
- splintercell 9y agoIt is the right of the parents to provide the best for their kids, not right of the kids to receive the best from their parents. If you put a 100% estate tax, then you're preventing people from working towards one of the biggest goals they work for, i.e. their kids. Also, if a parent doesn't wanna give his wealth to his kids, no court in America would force the estate to go to the kids. In other words, nobody is born rich, it's the rich individuals who make their kids rich.
- mod 9y agoSaid another way: The wealthy individuals are choosing to spend their money as they please. That happens to be by making wealthy some non-wealthy individuals. In the case of this argument it's parents/children, but it doesn't have to be. The parents choose of their own free will. And they can choose to spend the money instead. Many do. Most, probably.
- bobwaycott 9y agoThis doesn't actually answer the parent's question, though.
- 9y ago
- yequalsx 9y agoLook up usufruct and Jefferson's views on the topic. He believed that when a person dies their property should become community owned. He didn't think the next generation ought to be bound by the previous generation's wishes. Jefferson qualifies as American.
- hvs 9y agoHow is something "community owned"? Is it owned by the state? So eventually everything is owned by the state?
- yequalsx 9y agoI'll answer by giving some examples. National Parks in the U.S. are owned by the federal government. State parks by the state government. County parks by the county government. City parks by the city. Each level of government is able to sell land from its parks to individuals or corporations. There are other examples of something being government owned. I'm assuming you are aware of all this but I've been unable to deduce either your real question or your point. Can you elaborate?
- deleted 9y ago[deleted]
- hvs 9y agoThe OP said "when a person dies their property should become community owned" so your house would become the property of the state?
- HarryHirsch 9y agoIn Germany, hunting rights are community-owned in a way. The landowners in a municipality all form the Jagdgenossenschaft, it's a civic corporation (Körperschaft des öffentlichen Rechts). An individual would lease hunting rights from it, and an individual landowner can't probibit hunting on his lands if the Genossenschaft things otherwise.
- arethuza 9y ago
- groby_b 9y agoUh, what? First, the idea of declaring this un-American is grossly un-American itself. "We, the people" and "promote the general Welfare" seems to come somewhat before "mine, mine, MINE!" in the Constitution. Second, Native Americans (and Puerto Rico) are fine with the idea of community property - which deals with your last point. I suppose you could declare them un-American, that's a very American thing to do, so you've got that going for you. If you'd like to criticise this on the merits, go ahead - there's plenty of room. (For starters, a 100% estate tax will leave dependents destitute). But I'd be happy if HN could be kept free of the unthinking flag-waving approach.
- yequalsx 9y agoIt wouldn't necessarily leave dependents destitute. Adult children generally can make their own living.
- pc86 9y agoSomeone with Down Syndrome is (un)lucky enough in your scenario to have wealthy parents and they're forced to go from a comfortable life to state housing? Someone's estate is theirs to do with what they see fit, including after their death. It is, after all, their property. If they want to donate it to the state or fund a foundation/non-profit, or give it all to their children, that is their right. The state should not take ownership of my home, my bank accounts, and my assets simply because I die.
- yequalsx 9y agoThe word 'necessairly' is not unimportant in what I wrote. Over the centuries many societies and cultures have formed various ideas about how to deal with inheritance. Presently in the U.S. inheritence is as you say it should be. It doesn't have to be this way and this way is not the only ethical or American way of dealing with inheritance. Indeed, Jefferson disagreed with what you wrote. Also, I presented no scenario and have given no indication on what my beliefs on the issue are. I just said that a 100% estate tax would not necessarily leave surviving family members destitute. This is not disputable.
- jinfiesto 9y agoI'm not sure why a 100% estate tax is un-American. It's not like anyone "earns" an inheritance (I say this as someone who would benefit from a low estate tax.)
- zip1234 9y agoBecause of personal liberty. If you want all of your money to go to your kids, why can't you do that? Inheritance is as much about the person that died as it is the person/people receiving the inheritance.
- gscott 9y agoOften adult children work in the business and they do feel they have earned their inheritance.
- AnimalMuppet 9y agoOK, here's a person who owned a bunch of property, and they died. So now they don't own the property. Who should own it? In America, the default assumption is not that the government owns something until proven otherwise.
- becomethrow 9y agogiven concepts like eminent domain and their historical use, I think the assumption with property actually /is/ that the government owns it until proven otherwise.
- AnimalMuppet 9y agoEminent domain doesn't mean that the government owns it. It means that, if they have good reason, they can take it, and they have to pay you fair value for doing so. That's kind of the opposite of "the government owning it until proven otherwise".
- VLM 9y ago"A 100% tax on the estate upon one's death?" Interested in your comments on the medical-industrial complex as applies to people with less than, say, $10M net worth at retirement. Which is only about 99.9% of the population. My grandparents were like that. Low level limousine liberals, a couple million net worth, retire at 60, a couple chronic diseases which were kinda expensive, a couple very expensive acute diseases, by the death of my grandmother a good 30 years later, pretty much nothing left. They spent their first 30 in the great depression and WWII so they really had only 30 years of good times to save up for 30 years of retirement. Personally I've never been alive during good times, I wonder what it was like? Also interested in your views on the invention of retirement as a 19th century concept. It never existed before that time, never existed outside a small number of white countries. I don't think the "standard American retirement" such as experienced in the 1900s is going to be experienced much outside the 1900s or across the entire world. Historically inheritance was a white nobility concept, and not all nobility, in all white countries, all the time, had inheritable titles and estates. The fact that the prince of England inherited his title from the King of England upon death is kind of a stretch to claim that proves some random bubba in America is owed grandpa's old car upon his death.
- pjc50 9y agoInheritance (of real and movable property e.g. herds) is ancient in common law and applies in some form for thousands of years across most of the globe to people of all station who had the right to own such property within that society. It's very much not just a modern concept.
- spiralx 9y agoBefore the invention of money some 10,000 years ago people lived in small communities that collectively owned what they needed to survive, and there was no concept of ownership giving exclusive rights - families would own a herd, not the individuals within it.
- pc86 9y agoSpending a lot of money on healthcare isn't really an inheritance issue. Medical care costs money, and until such a point as we have taxpayer-funded/single-payer/free healthcare in the US, those services are going to be expensive. I'm not sure retiring at 60 with a few million in the bank entitles you to cheap or free healthcare when that's certainly not the case for people retiring at 70 with $150k in the bank. > Personally I've never been alive during good times, I wonder what it was like? If that's actually true you can't be more than 18-20 years old at the absolute most. I'm not that much older than you (31) but I didn't know a damn thing about retirement or elder healthcare when I was 20. I'm willing to bet when I'm 50 I'll say I didn't know a damn thing when I was 40. "Good times" are relative, anyway. Most of the people reading HN are not terribly effected by the overall US economy. Oh sure your SV startup gig might pay you $150k instead of $180k. But the folks here are almost exclusively students or in the top 4-5% of income nationally. Nobody here bags groceries for a living and is one paycheck away from collections on their car or a foreclosure. Those are the people for whom the broader economy has real implications. I'm not claiming that estate inheritance is divine providence or anything of the sort. But someone has to take possession of estate assets upon someone's death. I think it makes a lot more sense to a) give it to whom/whatever the decedent wishes in accordance with their will; or, b) next of kin. I'd like to think I'm pretty cognizant of my own ethnocentrism, and I'm sure that's more than a little to play here, but the idea that a "random bubba" is owed grandpa's old car makes the most sense to me when it's actually his grandpa and not just an old guy the next town over. Or even more so that it's not the state taking it and just selling it to the public.
- pjc50 9y ago100% estate taxes are unworkable - the same problem as Prohibition. The Laffer Curve is hugely overstated, but when talking about very high tax rates the incentive to structure around them is huge. There are all sorts of systems people use to structure around the existing taxes - life insurance, gifts, family companies, trusts, marriages, etc. Unless you sweep away the whole lot (disastrously disruptive in itself), people are going to work round it.
- clavalle 9y agoI disagree with the idea that people will just find a way around the law. My problem with the idea is if it /works/. How does all of that stuff find its way back into the hands of people that can make the most use of it?
- maehwasu 9y agoWhat is your disagreement based on?
- clavalle 9y agoThat 100% doesn't give a lot of wiggle room. Avoiding estate tax as it stands is incredibly difficult and generally takes decades of planning and foresight. There is already a fairly substantial incentive to avoid it and there is a reason that very smart, resourceful people that number in the millions don't. It turns out that wealthy people cannot just snap their fingers and wish away the law despite the popular myth that they can.
- pjc50 9y agoEven trivial googling suggests that avoidance at current levels is widespread. https://books.google.co.uk/books?id=iYKXYgSAaLsC&pg=PA311&lpg=PA311&dq=extent+of+estate+tax+avoidance&source=bl&ots=AvTXrFKgKv&sig=n6yxUekNQfQBnIR9_Y8X7v0h-lQ&hl=en&sa=X&ved=0ahUKEwjOveCoqMDTAhVqL8AKHeETClMQ6AEISjAG#v=onepage&q=extent%20of%20estate%20tax%20avoidance&f=false https://books.google.co.uk/books?id=iYKXYgSAaLsC&pg=PA311&lp...
- Frondo 9y agoGenerational, dynastic wealth seems grossly un-American to me. A 100% tax on the estate when someone dies seems totally legit. They're not going to need it, wherever they're going. If they want to give it to their kids before they die, then we can kick in the ol' gift tax or income tax. That way we can make sure we don't have wealthy families where money ends up concentrated, decade after decade, displacing a disproportionate amount of political power. There's nothing more un-American than a wealthy ruling class.
- ashark 9y agoEnforcement would be tricky. Fleeing wealth might be a real issue at that level of taxation, and you'd have to stop all kinds of activities that the really wealthy use to avoid the inheritance taxes we already do have (family trusts, board membership on corporations that exist largely to buy housing and transportation for family members, plus all sorts of overseas shenanigans and likely plenty of outright illegal maneuvering)
- ashark 9y agoInheritance of fortunes is no less undemocratic than inheritance of aristocratic titles, estates, and privileges. Doesn't mean we can practically do away with it, but it's a noble (hah) goal.
- tryitnow 9y agoSomething like this was tried in the post-War era when the top marginal tax rate was very high and the government had large incentives to promote policies opposed to wealth concentration.
- mac01021 9y agoWhat were those incentives?
- mtberatwork 9y agoI don't think this is the same. The top tax rate post-WW II was ~90% and wasn't regressive.
- germinalphrase 9y agoMatt Stoller recently wrote an article in The Atlantic that discusses the culture and values of that time period and how it has been diluted/devalued in modern times [0]. "By the late 1970s, the populist Brandeisian anti-monopoly tradition—protecting communities by breaking up concentrations of power—had been air-brushed out of the debate. And in doing so, America’s fundamental political vision transformed: from protecting citizen sovereignty to maximizing consumer welfare." [0] https://www.theatlantic.com/politics/archive/2016/10/how-democrats-killed-their-populist-soul/504710/ https://www.theatlantic.com/politics/archive/2016/10/how-dem...
- shiven 9y agoThe biggest assumption here is the belief that taking from the rich and giving to the politicians+bureaucrats, i.e. the government, is actually going to help the needy in any meaningful way. I am too skeptical to trust this assumption. And the current state of democracy in the U.S. does not make me feel too optimistic about the longer term either.
- kahrkunne 9y agoAh yes, the good old "let's steal from others", because that has worked so well in the past (but it's okay because it wasn't real communism so you try again and your retarded system fails but it's okay because it wasn't real communism so...)
- brokenmachine 9y ago> "let's steal from others" Where do you think all that hoarded money come from in the first place? I'm not saying the idea would work though.