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Taking away the ability for those who can take longer term risks doesn't really do anything to help those who don't have that opportunity. The total income brou

Taking away the ability for those who can take longer term risks doesn't really do anything to help those who don't have that opportunity. The total income brought in from inheritance taxes isn't really enough to create a society wide impact on this type of problem either.

benj111 8y ago
The longer term risk argument is interesting, but my pension investments would say otherwise. Also even if its 'only' zero sum, that money is still going somewhere, either allowing someone else to make a long term investment, or something more immediate. What would you say are the "society wide impacts"? I tend to subscribe to the view that money is the root of all evil[1], so at the extreme, a 100% inheritance rate would solve the problem. [1]In the sense that money leads to power, increased education opportunities for children etc etc.
- kiriakasis 8y ago
  Inequality is way deeper than money; finding blame in capitalism is alright, if you want to fight inequality and corruption you have a wildly different enemy than mere money
  - benj111 8y ago
    I agree. My personal view is earned wealth is more acceptable than inherited wealth. And that entrenched money is a significant contributing factor to certain types of corruption and inequality. If the Son never inherited the Fathers money, he'll have to earn his own before bribing that politician.
    - kadabra9 8y ago
      So what should the father do? Just give his money to the state when he dies? Spend it all?
      - benj111 8y ago
        Yes. If you take the view that the state requires $X per year to function. If the money doesn't come from inheritance tax, it has to come from somewhere. I don't know about you, but I'd prefer to pay my taxes when I'm dead. If they want to spend it, fair enough.
- agent008t 8y ago
  A 100% inheritance tax would encourage wealthy people to consume their wealth, rather than invest it for the long term. This will make the wealthy enjoy their wealth more, but it will make society poorer while also making it less free. If you think about it, someone earning a lot of money but not consuming it engages in altruistic behavior. You earn money by providing goods and services for others, but then instead of enjoying the money, you work at investing it and managing it to provide even more goods and services for others!
  - grahamburger 8y ago
    I think there's an argument to be made that the opposite is true - if the wealthy are spending their money then it's going to someone, after all. That someone is likely home builders, artisans, restaurants, clothiers, etc rather than offshore tax havens.
    - sokoloff 8y ago
      Yes, the wealthy would presumably engage lawyers and business advisors to help their offspring and people they like create companies for the next generation. Maybe my son would like to open a travel agency. Maybe then I'd like to use that travel agency almost exclusively so that I could keep tabs on his progress and offer my advice. Oh look, his travel agency, despite being extraordinarily expensive, is very successful and now I don't have any money left to pay inheritance tax on...
      - ericd 8y ago
        Well, that travel agency does end up paying corporate and then dividend taxes on the earnings... and anything paid out directly to the son as salary means income taxes.
  - jon-wood 8y ago
    Doesn't consuming wealth, rather than investing long term, end up as a net positive for society though? This may be a naive view, but it seems money placed as an investment has less of an impact, at least on the local economy, than money spent on more immediate things. At the very least it seems likely that money spent in the pursuit of consuming your wealth before death would result in it being somewhat more evenly spread amongst those who need the money, people working in bars, restaurants, manufacturing. Long term investments are more likely to end up being added to the coffers of large companies who may not even have any use for that money and just cycle it further round the investment economy to no real end.
- bsbechtel 8y ago
  > Also even if its 'only' zero sum, that money is still going somewhere, either allowing someone else to make a long term investment, or something more immediate. I'm not sure I understood your point correctly, but most wealth that is passed between generations is passed in the form of investments, not cash, so that wealth is performing the same societal benefit as your pension. What I meant by long term risk was that rich kids can afford to start businesses, because if they fail, they can fall back on their family's wealth to bounce back. I would avoid adopting the world view that money is the root of all evil (or leads to power...). If you gave everyone $1B, no one would be measurably more powerful than they are today, because everyone else can afford the same things they can, so prices would rise until an equilibrium is achieved (same goes for educational opportunities, etc, unless you cap teacher pay effectively holding teachers back). Again, a 100% inheritance rate would make society more equal by taking away opportunities from those who had ancestors that worked hard to provide that opportunity for them, not by giving more opportunity to those who weren't so fortunate.

benj111 8y ago

The longer term risk argument is interesting, but my pension investments would say otherwise. Also even if its 'only' zero sum, that money is still going somewhere, either allowing someone else to make a long term investment, or something more immediate. What would you say are the "society wide impacts"? I tend to subscribe to the view that money is the root of all evil[1], so at the extreme, a 100% inheritance rate would solve the problem. [1]In the sense that money leads to power, increased education opportunities for children etc etc.

kiriakasis 8y ago
Inequality is way deeper than money; finding blame in capitalism is alright, if you want to fight inequality and corruption you have a wildly different enemy than mere money
- benj111 8y ago
  I agree. My personal view is earned wealth is more acceptable than inherited wealth. And that entrenched money is a significant contributing factor to certain types of corruption and inequality. If the Son never inherited the Fathers money, he'll have to earn his own before bribing that politician.
  - kadabra9 8y ago
    So what should the father do? Just give his money to the state when he dies? Spend it all?
    - benj111 8y ago
      Yes. If you take the view that the state requires $X per year to function. If the money doesn't come from inheritance tax, it has to come from somewhere. I don't know about you, but I'd prefer to pay my taxes when I'm dead. If they want to spend it, fair enough.
agent008t 8y ago
A 100% inheritance tax would encourage wealthy people to consume their wealth, rather than invest it for the long term. This will make the wealthy enjoy their wealth more, but it will make society poorer while also making it less free. If you think about it, someone earning a lot of money but not consuming it engages in altruistic behavior. You earn money by providing goods and services for others, but then instead of enjoying the money, you work at investing it and managing it to provide even more goods and services for others!
- grahamburger 8y ago
  I think there's an argument to be made that the opposite is true - if the wealthy are spending their money then it's going to someone, after all. That someone is likely home builders, artisans, restaurants, clothiers, etc rather than offshore tax havens.
  - sokoloff 8y ago
    Yes, the wealthy would presumably engage lawyers and business advisors to help their offspring and people they like create companies for the next generation. Maybe my son would like to open a travel agency. Maybe then I'd like to use that travel agency almost exclusively so that I could keep tabs on his progress and offer my advice. Oh look, his travel agency, despite being extraordinarily expensive, is very successful and now I don't have any money left to pay inheritance tax on...
    - ericd 8y ago
      Well, that travel agency does end up paying corporate and then dividend taxes on the earnings... and anything paid out directly to the son as salary means income taxes.
- jon-wood 8y ago
  Doesn't consuming wealth, rather than investing long term, end up as a net positive for society though? This may be a naive view, but it seems money placed as an investment has less of an impact, at least on the local economy, than money spent on more immediate things. At the very least it seems likely that money spent in the pursuit of consuming your wealth before death would result in it being somewhat more evenly spread amongst those who need the money, people working in bars, restaurants, manufacturing. Long term investments are more likely to end up being added to the coffers of large companies who may not even have any use for that money and just cycle it further round the investment economy to no real end.
bsbechtel 8y ago
> Also even if its 'only' zero sum, that money is still going somewhere, either allowing someone else to make a long term investment, or something more immediate. I'm not sure I understood your point correctly, but most wealth that is passed between generations is passed in the form of investments, not cash, so that wealth is performing the same societal benefit as your pension. What I meant by long term risk was that rich kids can afford to start businesses, because if they fail, they can fall back on their family's wealth to bounce back. I would avoid adopting the world view that money is the root of all evil (or leads to power...). If you gave everyone $1B, no one would be measurably more powerful than they are today, because everyone else can afford the same things they can, so prices would rise until an equilibrium is achieved (same goes for educational opportunities, etc, unless you cap teacher pay effectively holding teachers back). Again, a 100% inheritance rate would make society more equal by taking away opportunities from those who had ancestors that worked hard to provide that opportunity for them, not by giving more opportunity to those who weren't so fortunate.