7 ms·

At low levels, which aren't taxed, it's not going to affect anything. At high levels, like giving your kid ten billion dollars, you're making it impractical or

At low levels, which aren't taxed, it's not going to affect anything. At high levels, like giving your kid ten billion dollars, you're making it impractical or impossible for others to advance economically. You're creating a class of people with indestructible inherited wealth that never have to work, that only have to collect interest and rent on the backs of everyone else. That's what inheritance tax and gift taxes seek to disrupt.

user5994461 8y ago
I don't think so, this certainly has never been effective at that. I'd say that historically billion dollars fortunes got diluted between the 10 children then the next generation, some of whom might actually burn it stupidly very quickly. Otherwise, it's diluted by wars and calamity. However, there are no major disaster in the past decades and the number of children per family have dropped dramatically. It surely breaks the balance.
- isostatic 8y ago
  That explains why the Grosvenor Family, a family who've owned the same company for 100 years longer than the united states has been in existent, is so poor.
  - ryacko 8y ago
    Comcast is a better example of a family owned business.
- liftbigweights 8y ago
  > I'd say that historically billion dollars fortunes got diluted between the 10 children then the next generation Throughout history and across most cultures, it was usually the first born son who got the father's legacy and the lion's share of the wealth. It's why it was so important for wives ( especially of the powerful and wealthy ) to produce a male heir. Sometimes it was a matter of life or death. We all know of king henry's wives. "When Anne failed to quickly produce a male heir, her only son being stillborn, the King grew tired of her, annulled their marriage, and a plot was hatched by Thomas Cromwell to execute her." https://en.wikipedia.org/wiki/List_of_wives_of_King_Henry_VIII https://en.wikipedia.org/wiki/List_of_wives_of_King_Henry_VI...
paulddraper 8y ago
> like giving your kid ten billion dollars, you're making it impractical or impossible for others to advance economically. Zero-sum is one perspective, but not one that I subscribe to. Does your neighbor having $10b of stuff make you better or worse off than if than if there's $10b of stuff at the bottom of the ocean?
- nicoburns 8y ago
  No, but other people having $10bn of disposable income increases prices for you. Or if you look over the long term, skews the economy towards producing luxury goods rather than meeting the basic needs of ordinary people.
  - refurb 8y ago
    Pretty sure a guy/gal who has $10Bn of disposable income isn’t buying underwear at Target like me, driving up the price.
    - chrisbennet 8y ago
      But owning property in your neighborhood my drive up your rents so you need to move.
    - nicoburns 8y ago
      They're not driving up demand, they're driving down supply, by making it relatively more profitable to make the goods that they do want, and thus relatively less profitable to make budget underwear (and other basic goods).
- mmcconnell1618 8y ago
  I don't believe the economy is zero-sum either but handing $10B in capital to your child gives them a significantly unfair advantage compared to most others. Image that the economy is a field of wheat. It grows bigger every year as workers become more productive and learn how to fertilize and water more efficiently. At the end of the season, everyone gets a chance to head into the field and collect some wheat. Some people don't have any tools. They pick the wheat by hand. Others have managed to fashion scythes and can collect a little more. But, the kid who inherited $10b has a fleet of combines that race into the field and collect 75% of the wheat in a flash. The economy (wheat field) grew bigger and everyone had a little more wheat but the $10b kid got way more than the others and can now buy another combine for the fleet to get even more next year. Without some rational tax on inherited wealth, we will create (and already have created in the United States) a plutocracy.
maerF0x0 8y ago
>You're creating a class of people with indestructible inherited wealth that never have to work, that only have to collect interest and rent on the backs of everyone else. That wealth is invested in profitable ventures that either create benefits in the system (assuming rational actors) or 2) lose value due to poor choices. Capital is rewarded because the investors are taking opportunity cost risks that advance the sum value of humanity's wealth.
- ahoy 8y ago
  > Capital is rewarded because the investors are taking opportunity cost risks that advance the sum value of humanity's wealth. And the vast majority of that advance in humanity's sum wealth accrues in the hands of those very capitalists. How peculiar!
- ska 8y ago
  assuming rational actor There is a reason such toy models are called "toy models". They are very useful for understanding and interrogating ideas. They aren't so useful for modeling real systems. One can only hope that policy making is a little more sophisticated (alas, often in vain).
- astrodust 8y ago
  I think you have a profound misunderstanding of what someone with billions of dollars in inherited wealth does with their money. It's not investing in "profitable ventures" that "create benefits", it's tied up in businesses they inherited, it's squirreled away in tax havens, it's spent on lavish properties, club memberships, expensive cars, and tuition for their children. If you're lucky a tiny fraction of that trickles down in the form of scholarships or charity work. Then that money generates enough of a return that their kids can inherit billions in turn and the cycle repeats. There's a point at which you have so much money that you will no longer ever have to work, but your kids will never have to work, and neither will their kids. It has such a heavy gravitational pull that in the long run there's no way you can lose. If you have even half competent people managing your money an estate worth $10B can pretty much exist forever and grow at or beyond the rate of inflation even when extravagantly luxurious cost of living expenses are deducted. A million dollar a month allowance won't put a dent in this money.
refurb 8y ago
How does someone having $1B of inherited wealth have any impact on my own life? I’d be paying rent to someone, whether they have $1 or $1B to their name.

user5994461 8y ago

I don't think so, this certainly has never been effective at that. I'd say that historically billion dollars fortunes got diluted between the 10 children then the next generation, some of whom might actually burn it stupidly very quickly. Otherwise, it's diluted by wars and calamity. However, there are no major disaster in the past decades and the number of children per family have dropped dramatically. It surely breaks the balance.

isostatic 8y ago
That explains why the Grosvenor Family, a family who've owned the same company for 100 years longer than the united states has been in existent, is so poor.
- ryacko 8y ago
  Comcast is a better example of a family owned business.
liftbigweights 8y ago
> I'd say that historically billion dollars fortunes got diluted between the 10 children then the next generation Throughout history and across most cultures, it was usually the first born son who got the father's legacy and the lion's share of the wealth. It's why it was so important for wives ( especially of the powerful and wealthy ) to produce a male heir. Sometimes it was a matter of life or death. We all know of king henry's wives. "When Anne failed to quickly produce a male heir, her only son being stillborn, the King grew tired of her, annulled their marriage, and a plot was hatched by Thomas Cromwell to execute her." https://en.wikipedia.org/wiki/List_of_wives_of_King_Henry_VIII https://en.wikipedia.org/wiki/List_of_wives_of_King_Henry_VI...

paulddraper 8y ago

> like giving your kid ten billion dollars, you're making it impractical or impossible for others to advance economically. Zero-sum is one perspective, but not one that I subscribe to. Does your neighbor having $10b of stuff make you better or worse off than if than if there's $10b of stuff at the bottom of the ocean?

nicoburns 8y ago
No, but other people having $10bn of disposable income increases prices for you. Or if you look over the long term, skews the economy towards producing luxury goods rather than meeting the basic needs of ordinary people.
- refurb 8y ago
  Pretty sure a guy/gal who has $10Bn of disposable income isn’t buying underwear at Target like me, driving up the price.
  - chrisbennet 8y ago
    But owning property in your neighborhood my drive up your rents so you need to move.
  - nicoburns 8y ago
    They're not driving up demand, they're driving down supply, by making it relatively more profitable to make the goods that they do want, and thus relatively less profitable to make budget underwear (and other basic goods).
mmcconnell1618 8y ago
I don't believe the economy is zero-sum either but handing $10B in capital to your child gives them a significantly unfair advantage compared to most others. Image that the economy is a field of wheat. It grows bigger every year as workers become more productive and learn how to fertilize and water more efficiently. At the end of the season, everyone gets a chance to head into the field and collect some wheat. Some people don't have any tools. They pick the wheat by hand. Others have managed to fashion scythes and can collect a little more. But, the kid who inherited $10b has a fleet of combines that race into the field and collect 75% of the wheat in a flash. The economy (wheat field) grew bigger and everyone had a little more wheat but the $10b kid got way more than the others and can now buy another combine for the fleet to get even more next year. Without some rational tax on inherited wealth, we will create (and already have created in the United States) a plutocracy.

maerF0x0 8y ago

>You're creating a class of people with indestructible inherited wealth that never have to work, that only have to collect interest and rent on the backs of everyone else. That wealth is invested in profitable ventures that either create benefits in the system (assuming rational actors) or 2) lose value due to poor choices. Capital is rewarded because the investors are taking opportunity cost risks that advance the sum value of humanity's wealth.

ahoy 8y ago
> Capital is rewarded because the investors are taking opportunity cost risks that advance the sum value of humanity's wealth. And the vast majority of that advance in humanity's sum wealth accrues in the hands of those very capitalists. How peculiar!
ska 8y ago
assuming rational actor There is a reason such toy models are called "toy models". They are very useful for understanding and interrogating ideas. They aren't so useful for modeling real systems. One can only hope that policy making is a little more sophisticated (alas, often in vain).
astrodust 8y ago
I think you have a profound misunderstanding of what someone with billions of dollars in inherited wealth does with their money. It's not investing in "profitable ventures" that "create benefits", it's tied up in businesses they inherited, it's squirreled away in tax havens, it's spent on lavish properties, club memberships, expensive cars, and tuition for their children. If you're lucky a tiny fraction of that trickles down in the form of scholarships or charity work. Then that money generates enough of a return that their kids can inherit billions in turn and the cycle repeats. There's a point at which you have so much money that you will no longer ever have to work, but your kids will never have to work, and neither will their kids. It has such a heavy gravitational pull that in the long run there's no way you can lose. If you have even half competent people managing your money an estate worth $10B can pretty much exist forever and grow at or beyond the rate of inflation even when extravagantly luxurious cost of living expenses are deducted. A million dollar a month allowance won't put a dent in this money.

refurb 8y ago

How does someone having $1B of inherited wealth have any impact on my own life? I’d be paying rent to someone, whether they have $1 or $1B to their name.