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The problem with inheritance taxes, property taxes, etc. is that they erode the meaning of ownership and permanence. For example, if I as a parent want to save

The problem with inheritance taxes, property taxes, etc. is that they erode the meaning of ownership and permanence. For example, if I as a parent want to save up and give up my immediate gratification from spending that money so my children have a head start or even a luxurious cushion, what’s wrong with that? That’s me spending my utility the way I want. With property taxes, ownership turns into renting - you never really own anything and even things you already bought can have their ownership eroded into nothing by subsequent policy.

gerbilly 7y ago
> The problem with inheritance taxes, property taxes, etc. is that they erode the meaning of ownership and permanence. That's just it, we never really own anything anyway. If the rich are richer than us, it's because we gave our wealth to them, or rather let them take it. To he who has much, more will be given...
- throwawaysea 7y ago
  > it's because we gave their riches to them. This seems disconnected from reality. It is more accurate to say that they earned it through voluntary two party transactions.
  - barrkel 7y ago
    You're dying of cancer. How much will you pay doctors / drug company to keep you alive? Is the transaction voluntary? Think carefully what voluntary means. Many, if not most, people, in their daily lives, don't have much volition.
    - throwawaysea 7y ago
      I don’t think the second bit follows from the first. You’ve cherry picked an example of tough circumstances that most people don’t face.
      - gerbilly 7y ago
        You don't even need to use such a dire example as cancer to see how wealth would get transferred involuntarily. Say your neighbour falls on hard times, and instead of just helping him, you offer to buy some of his land, or his watch, or whatever at a disadvantageous price. Or you lend him money at unfavourable terms. There are real life businesses that operate today, pawn shops, cheque cashing places, that grow wealthy on the poor. The way to avoid giving what little wealth we have to the man, means to rely on one's community, but in North America that is being eroded more and more.
k__ 7y ago
Sure thing, but what do we have now? Most people are only successful because of their inheritance. If you would be forbidden to give your kids more than a million that would solve that problem pretty well, I guess.
- throwaway8278 7y ago
  While this is a commonly believed myth, it is a myth. The vast majority of millionaires and other "wealthy" people are self made, not made from inheritance.
  - dlp211 7y ago
    This is true today, but it wasn't true in the past, and I doubt it will continue to be true in the future based on our current trajectory. Also, due to inflation, millionaire is not what it used to be.
  - k__ 7y ago
    Are they? I always read about so believed "self-made" just to find out that they had rich or at least wealthy parents.
opportune 7y ago
If people were less focused on acquiring wealth (such as property), or their estate needed to sell much of it when someone passed, it would probably bring the prices down as a whole - demand would be less and there would be much more liquidity. For things like housing, that would be good for everybody. All those houses wouldn't magically disappear, they would just be cheaper, because a lot of the investment/speculation demand would fall.
barrkel 7y ago
Ownership is a human invention. You can't take it with you, you're only ever really leasing it, and to the degree that you distribute it, what you're actually exercising is power to get other people do what you want (or delegating that power). Ownership will exist for as long as there's support in governance and law for it. If ownership doesn't deliver enough benefit for the majority in society, then expect society to alter the terms of the bargain.
- 52-6F-62 7y ago
  Seems like a problem humanity has been struggling with for millennia the way we’ve taken to burying people with their prized objects and riches. What’s more, in many cases—like Egyptian pharaohs—the wealth was only inherited and not earned by way of creating anything except through maybe war and conquest. The difference in perspective seems fundamental. Wonder if there’s been more vigorous research on the subject.
Raidion 7y ago
The argument against that would be that you can give your kid a luxurious cushion, you just don't get to give him 1000x what the average person would need. Keeping your kid safe from pretty much anything you went through doesn't require 80 billion dollars.
- throwawaysea 7y ago
  Why not? This seems arbitrary. If I earned it, I should be able to do whatever I want with it.
  - mikorym 7y ago
    I don't really understand why the commentors are just contradicting your statement with philosophical notions of ownership. I think your comment is more about the right to self-determination and touches on the topic of what wealth itself means (i.e., having a good education is of value; whether it cost a lot of money or not). I guess one should not take HN comments too personally or seriously...
  - jddj 7y ago
    At the extremely wealthy end, you almost certainly didn't. There's hard work, and there's luck. Your genes, your environment and the randomness of the universe add to make up 100% of both of those things. I don't think it's fair to say that the children (and their children, and their children) of someone who won the randomness / genetic / environmental lottery should be thousands of times better off than the children of someone who didn't. In a fair and just nation/world we would try to reduce wherever possible the instances where your opportunities are dependent upon where, or to whom you are born.
    - imtringued 7y ago
      That's missing the point. People don't get angry about someone else being a thousand times better off. They get angry about being left behind while certain special interests take all the gains. That's something that can't be solved by an inheritance tax or sending children to boarding schools from the day they are born to let them grow up in a homogeneous environment. All of those children will then feel left behind while their parents party away their last savings because the state is going to take it away anyway, right?
mikorym 7y ago
In South Africa there is the added complication that these taxes don't normalise income inequality—they exarcerbate it. One of the biggest problems is that regulation raises the barrier to entry and creats a situation where the "efficient" become more efficient. EDIT: I don't agree with the other opinions that reply to your comment: I think the arguments about autonomy and and self-determination hold just as much in personal finance.
dharmon 7y ago
You're treating ownership as if it's some natural right. It's not. The idea of property and ownership is a social construct, so it makes sense that society gets to determine the rules of this construct. And society has generally determined that your "ownership" comes with a fee to cover the societal costs that make it all possible. E.g., car and house property taxes to cover police depts, fire depts, etc. Without which see how long your precious possessions last.
Ar-Curunir 7y ago
it's not the case that all your savings are only the outcome of your own hard work. Your income depends on the labour of countless others that make your modern life possible. Why should your wealth stay with you instead of going to workers that make your shoes or your clothes or your laptop or your phone?
- refurb 7y ago
  Unless they are slaves, their labor was already paid for and the exchange was voluntary.
asdff 7y ago
When you own something you benefit from public government so it makes perfect sense that you'd pay for that benefit.

gerbilly 7y ago

> The problem with inheritance taxes, property taxes, etc. is that they erode the meaning of ownership and permanence. That's just it, we never really own anything anyway. If the rich are richer than us, it's because we gave our wealth to them, or rather let them take it. To he who has much, more will be given...

throwawaysea 7y ago
> it's because we gave their riches to them. This seems disconnected from reality. It is more accurate to say that they earned it through voluntary two party transactions.
- barrkel 7y ago
  You're dying of cancer. How much will you pay doctors / drug company to keep you alive? Is the transaction voluntary? Think carefully what voluntary means. Many, if not most, people, in their daily lives, don't have much volition.
  - throwawaysea 7y ago
    I don’t think the second bit follows from the first. You’ve cherry picked an example of tough circumstances that most people don’t face.
    - gerbilly 7y ago
      You don't even need to use such a dire example as cancer to see how wealth would get transferred involuntarily. Say your neighbour falls on hard times, and instead of just helping him, you offer to buy some of his land, or his watch, or whatever at a disadvantageous price. Or you lend him money at unfavourable terms. There are real life businesses that operate today, pawn shops, cheque cashing places, that grow wealthy on the poor. The way to avoid giving what little wealth we have to the man, means to rely on one's community, but in North America that is being eroded more and more.

k__ 7y ago

Sure thing, but what do we have now? Most people are only successful because of their inheritance. If you would be forbidden to give your kids more than a million that would solve that problem pretty well, I guess.

throwaway8278 7y ago
While this is a commonly believed myth, it is a myth. The vast majority of millionaires and other "wealthy" people are self made, not made from inheritance.
- dlp211 7y ago
  This is true today, but it wasn't true in the past, and I doubt it will continue to be true in the future based on our current trajectory. Also, due to inflation, millionaire is not what it used to be.
- k__ 7y ago
  Are they? I always read about so believed "self-made" just to find out that they had rich or at least wealthy parents.

opportune 7y ago

If people were less focused on acquiring wealth (such as property), or their estate needed to sell much of it when someone passed, it would probably bring the prices down as a whole - demand would be less and there would be much more liquidity. For things like housing, that would be good for everybody. All those houses wouldn't magically disappear, they would just be cheaper, because a lot of the investment/speculation demand would fall.

barrkel 7y ago

Ownership is a human invention. You can't take it with you, you're only ever really leasing it, and to the degree that you distribute it, what you're actually exercising is power to get other people do what you want (or delegating that power). Ownership will exist for as long as there's support in governance and law for it. If ownership doesn't deliver enough benefit for the majority in society, then expect society to alter the terms of the bargain.

52-6F-62 7y ago
Seems like a problem humanity has been struggling with for millennia the way we’ve taken to burying people with their prized objects and riches. What’s more, in many cases—like Egyptian pharaohs—the wealth was only inherited and not earned by way of creating anything except through maybe war and conquest. The difference in perspective seems fundamental. Wonder if there’s been more vigorous research on the subject.

Raidion 7y ago

The argument against that would be that you can give your kid a luxurious cushion, you just don't get to give him 1000x what the average person would need. Keeping your kid safe from pretty much anything you went through doesn't require 80 billion dollars.

throwawaysea 7y ago
Why not? This seems arbitrary. If I earned it, I should be able to do whatever I want with it.
- mikorym 7y ago
  I don't really understand why the commentors are just contradicting your statement with philosophical notions of ownership. I think your comment is more about the right to self-determination and touches on the topic of what wealth itself means (i.e., having a good education is of value; whether it cost a lot of money or not). I guess one should not take HN comments too personally or seriously...
- jddj 7y ago
  At the extremely wealthy end, you almost certainly didn't. There's hard work, and there's luck. Your genes, your environment and the randomness of the universe add to make up 100% of both of those things. I don't think it's fair to say that the children (and their children, and their children) of someone who won the randomness / genetic / environmental lottery should be thousands of times better off than the children of someone who didn't. In a fair and just nation/world we would try to reduce wherever possible the instances where your opportunities are dependent upon where, or to whom you are born.
  - imtringued 7y ago
    That's missing the point. People don't get angry about someone else being a thousand times better off. They get angry about being left behind while certain special interests take all the gains. That's something that can't be solved by an inheritance tax or sending children to boarding schools from the day they are born to let them grow up in a homogeneous environment. All of those children will then feel left behind while their parents party away their last savings because the state is going to take it away anyway, right?

mikorym 7y ago

In South Africa there is the added complication that these taxes don't normalise income inequality—they exarcerbate it. One of the biggest problems is that regulation raises the barrier to entry and creats a situation where the "efficient" become more efficient. EDIT: I don't agree with the other opinions that reply to your comment: I think the arguments about autonomy and and self-determination hold just as much in personal finance.

dharmon 7y ago

You're treating ownership as if it's some natural right. It's not. The idea of property and ownership is a social construct, so it makes sense that society gets to determine the rules of this construct. And society has generally determined that your "ownership" comes with a fee to cover the societal costs that make it all possible. E.g., car and house property taxes to cover police depts, fire depts, etc. Without which see how long your precious possessions last.

Ar-Curunir 7y ago

it's not the case that all your savings are only the outcome of your own hard work. Your income depends on the labour of countless others that make your modern life possible. Why should your wealth stay with you instead of going to workers that make your shoes or your clothes or your laptop or your phone?

refurb 7y ago
Unless they are slaves, their labor was already paid for and the exchange was voluntary.

asdff 7y ago

When you own something you benefit from public government so it makes perfect sense that you'd pay for that benefit.