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The idea that the US has a problem with too little accumulation of intergenerational wealth is patent nonsense. This is different from parent leaving you stock

The idea that the US has a problem with too little accumulation of intergenerational wealth is patent nonsense. This is different from parent leaving you stock and bonds. Father dies, leaves company that makes engines to son and $50 million in cash because he has invested most in his company. IRS+State: son, you owe us half+ of what your father left you, or $1.1 Billion. If he borrows half of company's worth that's not going to be a healthy company anymore. So he sells it and selling is not always the best thing for employees. Edited: If I was made King, I'd look to lower the inheritance to children to say 10% and abolish trusts that fund generations of lazy, spoiled brats living from their great-great-grandfather's money.

vinceguidry 9y ago
If you've got that much at stake, generally in the US you'll have estate planners that ensure you pay little to no tax on it.
jowiar 9y ago
The problem with your proposal is that if you slash the inheritance tax, you don't need a trust to pass the wealth down across generations. The whole point of a trust is to avoid multiple halvings. By lowering the inheritance tax to 10%, the money makes it several generations down before even getting halved once.
- easilyBored 9y ago
  Or within two-three generations they might lose it all, or one of them pulls a Bill Gates and leave most to charity. Personally I think that you earned your money, paid taxes on it and your kids shouldn't be being more than half (at least on paper, before scores of lawyers and accountants devise shelters.) Your own kids are different, now as you go down the family free... Soon enough or maybe even now, the Kennedys, can marry each other in the church and without any genetic penalty. So Joe's money could be funding both sides of the family...
vacri 9y ago
I find it funny just how much public mindshare the Estate Tax gets in the US: "only the largest 0.2% of estates in the US will have to pay any estate tax" https://en.wikipedia.org/wiki/Estate_tax_in_the_United_States https://en.wikipedia.org/wiki/Estate_tax_in_the_United_State... The estate tax is there to stop (or at least slow) the systemic rise of a new monied aristocracy. In any case, if you want to leave loads of money to your kids, the answer is "don't wait until you die", because you can give them a huge chunk each year before seeing that tax. > I'd look to lower the inheritance to children to say 10% and abolish trusts that fund generations of lazy, spoiled brats living from their great-great-grandfather's money. How would giving them the money directly instead of via a trust fund stop that behaviour?
- narrowrail 9y ago
  In the US, we have a gift tax which places a $14K/year maximum on parents giving to their children. https://en.wikipedia.org/wiki/Gift_tax_in_the_United_States https://en.wikipedia.org/wiki/Gift_tax_in_the_United_States
laughingman2 9y ago
> I'd look to lower the inheritance to children to say 10% and abolish trusts that fund generations of lazy, spoiled brats living from their great-great-grandfather's money. Exactly, these leeches have to be stopped. And the money could be instead put to some good common like free college, health care leveling the playing field for everyone.
- Camillo 9y ago
  The last thing America needs is more college.
- gambiting 9y ago
  Out of curiosity - let's say I was rich and wanted to set up a trust fund for my children so they could live like spoiled brats their entire lives. Why, especially in the "land of the free" would people want to stop me from doing so? I mean, it's my choice what I do with my money(that was legally earned and that I paid taxes on), is it not? This is purely theoretical, as I am neither rich nor have children, but I take some issue with people saying that kids living off trust funds are "leeches" - it was their parents choice to spend money this way, so what is wrong with that?
  - CPLX 9y ago
    Nobody wants to stop you from doing it. They want your kids to pay taxes on it. That's different. If I go to work this year and get $100,000 for doing stuff, nobody seems confused that I have to give a massive chunk of that to the government. So if you don't go to work this year but get $100,000 from your parents, you shouldn't act confused that people expect to cough up your share as well. When families transfer money to the next generation it changes hands. The way we finance our society, generally, is that when money changes hands a substantial portion of it is remitted in tax. So you already paid taxes on it, sure, but that's irrelevant, your kids didn't. When you give money to your nanny or your driver they have to pay taxes. When you buy dinner at a restaurant the chef has to pay taxes. So when you give it to your kids they should pay taxes on it too. Because when people get money they have to pay taxes on it. That's how taxes work. The real question is why the rich kids think that the specific way they get their money is special and shouldn't be taxed.
mcv 9y ago
> "Father dies, leaves company that makes engines to son and $50 million in cash because he has invested most in his company. IRS+State: son, you owe us half+ of what your father left you, or $1.1 Billion. If he borrows half of company's worth that's not going to be a healthy company anymore. So he sells it and selling is not always the best thing for employees." Isn't the most obvious way fix to that, to give the government part ownership of the company, but leave control in the hands of the heir? If the heir does well, the company continues as usual, and in case of mismanagement, the government could replace the CEO and the company survives under new leadership. Maybe have some arrangement that allows the heir to buy the government shares back. If course the government should take good care of their share and not sell it off to the highest bidder. Unfortunately under the neoliberal doctrine that's been plaguing European politics these last couple of decades, many European governments would try to privatize and sell their shares as fast as possible, putting these companies at risk.
sangnoir 9y ago
> Father dies, leaves company that makes engines to son and $50 million in cash because he has invested most in his company. IRS+State: son, you owe us half+ of what your father left you, or $1.1 Billion. If he borrows half of company's worth that's not going to be a healthy company anymore. So he sells it and selling is not always the best thing for employees. That's not going to happen because those shares are going to be held by an immortal trust fund that never has to pay inheritance taxes. The trustafarian son will not have to borrow or sell a damn thing.

vinceguidry 9y ago

If you've got that much at stake, generally in the US you'll have estate planners that ensure you pay little to no tax on it.

jowiar 9y ago

The problem with your proposal is that if you slash the inheritance tax, you don't need a trust to pass the wealth down across generations. The whole point of a trust is to avoid multiple halvings. By lowering the inheritance tax to 10%, the money makes it several generations down before even getting halved once.

easilyBored 9y ago
Or within two-three generations they might lose it all, or one of them pulls a Bill Gates and leave most to charity. Personally I think that you earned your money, paid taxes on it and your kids shouldn't be being more than half (at least on paper, before scores of lawyers and accountants devise shelters.) Your own kids are different, now as you go down the family free... Soon enough or maybe even now, the Kennedys, can marry each other in the church and without any genetic penalty. So Joe's money could be funding both sides of the family...

vacri 9y ago

I find it funny just how much public mindshare the Estate Tax gets in the US: "only the largest 0.2% of estates in the US will have to pay any estate tax" https://en.wikipedia.org/wiki/Estate_tax_in_the_United_States https://en.wikipedia.org/wiki/Estate_tax_in_the_United_State... The estate tax is there to stop (or at least slow) the systemic rise of a new monied aristocracy. In any case, if you want to leave loads of money to your kids, the answer is "don't wait until you die", because you can give them a huge chunk each year before seeing that tax. > I'd look to lower the inheritance to children to say 10% and abolish trusts that fund generations of lazy, spoiled brats living from their great-great-grandfather's money. How would giving them the money directly instead of via a trust fund stop that behaviour?

narrowrail 9y ago
In the US, we have a gift tax which places a $14K/year maximum on parents giving to their children. https://en.wikipedia.org/wiki/Gift_tax_in_the_United_States https://en.wikipedia.org/wiki/Gift_tax_in_the_United_States

laughingman2 9y ago

> I'd look to lower the inheritance to children to say 10% and abolish trusts that fund generations of lazy, spoiled brats living from their great-great-grandfather's money. Exactly, these leeches have to be stopped. And the money could be instead put to some good common like free college, health care leveling the playing field for everyone.

Camillo 9y ago
The last thing America needs is more college.
gambiting 9y ago
Out of curiosity - let's say I was rich and wanted to set up a trust fund for my children so they could live like spoiled brats their entire lives. Why, especially in the "land of the free" would people want to stop me from doing so? I mean, it's my choice what I do with my money(that was legally earned and that I paid taxes on), is it not? This is purely theoretical, as I am neither rich nor have children, but I take some issue with people saying that kids living off trust funds are "leeches" - it was their parents choice to spend money this way, so what is wrong with that?
- CPLX 9y ago
  Nobody wants to stop you from doing it. They want your kids to pay taxes on it. That's different. If I go to work this year and get $100,000 for doing stuff, nobody seems confused that I have to give a massive chunk of that to the government. So if you don't go to work this year but get $100,000 from your parents, you shouldn't act confused that people expect to cough up your share as well. When families transfer money to the next generation it changes hands. The way we finance our society, generally, is that when money changes hands a substantial portion of it is remitted in tax. So you already paid taxes on it, sure, but that's irrelevant, your kids didn't. When you give money to your nanny or your driver they have to pay taxes. When you buy dinner at a restaurant the chef has to pay taxes. So when you give it to your kids they should pay taxes on it too. Because when people get money they have to pay taxes on it. That's how taxes work. The real question is why the rich kids think that the specific way they get their money is special and shouldn't be taxed.

mcv 9y ago

> "Father dies, leaves company that makes engines to son and $50 million in cash because he has invested most in his company. IRS+State: son, you owe us half+ of what your father left you, or $1.1 Billion. If he borrows half of company's worth that's not going to be a healthy company anymore. So he sells it and selling is not always the best thing for employees." Isn't the most obvious way fix to that, to give the government part ownership of the company, but leave control in the hands of the heir? If the heir does well, the company continues as usual, and in case of mismanagement, the government could replace the CEO and the company survives under new leadership. Maybe have some arrangement that allows the heir to buy the government shares back. If course the government should take good care of their share and not sell it off to the highest bidder. Unfortunately under the neoliberal doctrine that's been plaguing European politics these last couple of decades, many European governments would try to privatize and sell their shares as fast as possible, putting these companies at risk.

sangnoir 9y ago

> Father dies, leaves company that makes engines to son and $50 million in cash because he has invested most in his company. IRS+State: son, you owe us half+ of what your father left you, or $1.1 Billion. If he borrows half of company's worth that's not going to be a healthy company anymore. So he sells it and selling is not always the best thing for employees. That's not going to happen because those shares are going to be held by an immortal trust fund that never has to pay inheritance taxes. The trustafarian son will not have to borrow or sell a damn thing.