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As much as in theory inheritance tax is a solution for the problem, I don't think in practice it works well. The ultra rich will always have avenues to escape t

As much as in theory inheritance tax is a solution for the problem, I don't think in practice it works well. The ultra rich will always have avenues to escape tax. The middle class instead, trying to secure a better future for the family, will get hit the hardest. I am conflicted about this way of trying to solve the problem. Also, this is assuming the tax money gets used efficiently and not to the advantage of the top earners.

k__ 7y ago
Yes, we also need to rewrite foundation law and trust fund law.
nine_k 7y ago
A half-way solution could be progressive inheritance tax, with a rather high bend point. When a father who back in the day bought a house in Silicon Valley for $100k passes it to his child, the child does not pay a ton (or likely anything at all) from the few million of current value of the house. When a parent passes a $10B enterprie to children, the children have to split and sell a part of the business to pay the inheritance tax. The children still retain a successful multi-billion business, but its market share becomes smaller, increasing the competition on the market.
human20190310 7y ago
The inevitability of people trying to beat the system isn't a reason to abandon the principle.
- aledalgrande 7y ago
  But it forces you to think if there is a better solution.
  - asdff 7y ago
    The IRS filing your taxes automatically would be a start.
dlp211 7y ago
> As much as in theory inheritance tax is a solution for the problem, I don't think in practice it works well. The ultra rich will always have avenues to escape tax. The middle class instead, trying to secure a better future for the family, will get hit the hardest. The middle class is not subject to Federal Estate taxes. The exemptions are $11MM and $22MM if the estate first passed to a spouse. Neither of those are middle class amounts of wealth.
- aledalgrande 7y ago
  Those seem pretty high ceilings for middle class, but would someone who has 10B in assets really pay out? I am skeptical in practice it would happen. But you never know, in Canada taxes seem to work.
khawkins 7y ago
An inheritance tax is a solution for wealth inequality in the same way that picking at a scab gets rid of the scab. Sure, it might be satisfying to get rid of, but it only causes the wound to bleed more, a new scab will form, and getting rid of it isn't what you actually need, you need the wound to heal. If the wound heals, the scab will fall off, but picking at it only makes the healing time longer.
dwaltrip 7y ago
There will be always some avenues to get around any given tax policy, but not all of these methods will be equally effective. If one policy results in half the amount of avoidance as another policy, this is a very meaningful difference. It's really important to not overlook this.
biql 7y ago
> The middle class instead, trying to secure a better future for the family, will get hit the hardest. That's what progressive income tax does as well. Not all that unexpected the middle class is shrinking.

k__ 7y ago

Yes, we also need to rewrite foundation law and trust fund law.

nine_k 7y ago

A half-way solution could be progressive inheritance tax, with a rather high bend point. When a father who back in the day bought a house in Silicon Valley for $100k passes it to his child, the child does not pay a ton (or likely anything at all) from the few million of current value of the house. When a parent passes a $10B enterprie to children, the children have to split and sell a part of the business to pay the inheritance tax. The children still retain a successful multi-billion business, but its market share becomes smaller, increasing the competition on the market.

human20190310 7y ago

The inevitability of people trying to beat the system isn't a reason to abandon the principle.

aledalgrande 7y ago
But it forces you to think if there is a better solution.
- asdff 7y ago
  The IRS filing your taxes automatically would be a start.

dlp211 7y ago

> As much as in theory inheritance tax is a solution for the problem, I don't think in practice it works well. The ultra rich will always have avenues to escape tax. The middle class instead, trying to secure a better future for the family, will get hit the hardest. The middle class is not subject to Federal Estate taxes. The exemptions are $11MM and $22MM if the estate first passed to a spouse. Neither of those are middle class amounts of wealth.

aledalgrande 7y ago
Those seem pretty high ceilings for middle class, but would someone who has 10B in assets really pay out? I am skeptical in practice it would happen. But you never know, in Canada taxes seem to work.

khawkins 7y ago

An inheritance tax is a solution for wealth inequality in the same way that picking at a scab gets rid of the scab. Sure, it might be satisfying to get rid of, but it only causes the wound to bleed more, a new scab will form, and getting rid of it isn't what you actually need, you need the wound to heal. If the wound heals, the scab will fall off, but picking at it only makes the healing time longer.

dwaltrip 7y ago

There will be always some avenues to get around any given tax policy, but not all of these methods will be equally effective. If one policy results in half the amount of avoidance as another policy, this is a very meaningful difference. It's really important to not overlook this.

biql 7y ago

> The middle class instead, trying to secure a better future for the family, will get hit the hardest. That's what progressive income tax does as well. Not all that unexpected the middle class is shrinking.