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I wonder how much society would change if you were capped with how much wealth you could pass along after you died. The rest going directly to the govt. Maybe a

I wonder how much society would change if you were capped with how much wealth you could pass along after you died. The rest going directly to the govt. Maybe a cap that was more than enough per child? 1-10M?

DaiPlusPlus 7y ago
That's what the estate tax is meant to do - to help prevent a landed-gentry and aristocracy from emerging which would subvert the republic.
- almost_usual 7y ago
  I’m all for it then. If you inherit a million dollars or more you already have a ridiculous advantage over the rest of the world.
jfk13 7y ago
Not much; the really wealthy would find workarounds.
- almost_usual 7y ago
  Really? Doing DNA tests and verifying you are a direct descendant in order to receive income seems pretty rigorous. That would be the only vector of transmission. You could default all other assets to govt and impassable. Liquid only.
  - nostromo 7y ago
    Tax havens are a thing, and this doesn't seem like a fixable problem without some sort of draconian world government.
    - IfOnlyYouKnew 7y ago
      Tax havens were a thing. But between all the leaked customer data, the subsequent prosecutions, and plenty of bilateral pressure from the US (2008-20016) and other large and wealthy countries, most tax haven jurisdictions have given in/up. It's not entirely perfect, of course. But there is plenty of evidence that with people in charge actually caring for the issue it is solvable.
- IfOnlyYouKnew 7y ago
  This sort of defeatism is, unfortunately, as widespread as it is harmful and wrong. Rich people do not have any magical powers. And while they have better resources to find workarounds or get a discount when caught, the law generally applies to them just as it does to anybody else. With just a bit of political will, it would be rather easy to effectively levy such a tax. During the Obama administration, for example, offshore banking saw some drastic changes making it pretty much useless in many cases. Even Switzerland co-operates when you ask unfriendly enough.
  - aries1980 7y ago
    > the law generally applies to them just as it does to anybody else Indeed, but the punishment of the law is not proportionate. E.g. stealing billions and stash it, you might end up in a 27-month jail time (http://www.nbcnews.com/id/19293341/ns/business-corporate_scandals/t/former-enron-exec-gets--month-sentence/ http://www.nbcnews.com/id/19293341/ns/business-corporate_sca...) which is a very good hourly rate. Must feel like a meditative vacation after the party-hard years.
umvi 7y ago
Why should the government be entitled to it, though? The government has shown itself to be a terrible steward of wealth. I would rather we prioritize incentives to use existing money more efficiently and cut wasteful spending vs. increasing the amount of money pouring into the coffers.
- DaiPlusPlus 7y ago
  There is a difference between "the government" and "the state" (not US states, and may also refer to "the people"). It's not that the state is "entitled" to it any more than it's entitled to any other tax - but consider the state is responsible for society, economy and infrastructure: overall the state created value. Whereas what is the moral entitlement of someone who had the sheer fortitude to be born to someone who had amassed that much wealth? And if the state gets a decent amount of income from estate-taxes and it meets its budget-goals and creates value through spending it - or even if it chooses to lower taxes on everyone else instead, then consider who is the real net recipient of the estate tax revenue? - everyone.
- lonelappde 7y ago
  Estate tax could displace lower end income tax or sales tax.
metacritic12 7y ago
Less inequality for sure. Also, probably half of people who otherwise continued to earn money past the say, $10M mark (as you put it above) would just totally stop. To some this would be really cool: you'd get more artists maybe, and fewer obstinate bankers that continue to plunder society. To others this may be bad if you think those people otherwise would have created value for society.
- grecy 7y ago
  > To others this may be bad if you think those people otherwise would have created value for society I have to wonder what percentage of people who are earning over $10M lifetime are adding anything substantial to society other than making the economy go up - which as we've seen lately is a crock anyway. I also venture to bet that a deal percentage of those who are would continue to work, even if it's essentially 'for free', because they love what they're doing.
tehjoker 7y ago
What if you couldn't pass anything on at all? What if the only way to guarantee a decent future for your kids is if you work to guarantee a future for everyone's kids?
- beatgammit 7y ago
  All that would do is make accountants more money. Wealthy people will find a way to pass that along to their children. If there's a 100% estate tax, you can bet that they won't have a penny to their name when they die, since the money will be in a trust in their kids' names or something, or perhaps in a corporation whose CEO position is passed down. You would have to significantly change how everything works to eliminate options for the wealthy. And why would you want to? Most extremely wealthy people seem to be self-made [1][2] (not the best sources, but that's what I found with a quick search). Wealth tends to disappear after 3-5 generations (this article[3] claims 10-15), so that money will likely return to "society" relatively quickly anyway. Solving the "problem" seems likely to discourage the types of activities that lead to massive wealth accumulation, like innovation and investment in innovation, which is a healthy activity for society. Wealth taxes seem a bit like throwing the baby out with the bath water. - [1] https://www.businessnewsdaily.com/2871-how-most-millionaires-got-rich.html https://www.businessnewsdaily.com/2871-how-most-millionaires... - [2] https://www.entrepreneur.com/article/269593 https://www.entrepreneur.com/article/269593 - [3] https://newrepublic.com/article/116462/family-wealth-lasts-ten-fifteen-generations https://newrepublic.com/article/116462/family-wealth-lasts-t...
tracer4201 7y ago
I support the notion of capping how much you pass on after death. I’m against dynasties. I don’t support simply giving that money to the government. In the country my husband is from, government has plundered their national resources and directly the treasury chest. In the towns I grew up in, in the Midwest, I saw similar patterns. My high school didn’t teach calculus, but we took loans or raised taxes to fund football stadiums, etc. Government is not a great allocator. Unless we can create some framework to hold officials accountable, I’m not convinced the billions the Bill Gates of the world leave behind would go to helping student debt (which in my opinion it should) or counter homelessness instead of another 20 year war in the Middle East. Not trying to turn this political but just trying to convey my view.
throwawaysea 7y ago
Why wouldn't people be allowed the freedom to pass on whatever wealth they want? What if they choose to defer gratification and are working to support future generations? Shouldn't that be their individual choice? It seems arbitrary for the government to seize that.

DaiPlusPlus 7y ago

That's what the estate tax is meant to do - to help prevent a landed-gentry and aristocracy from emerging which would subvert the republic.

almost_usual 7y ago
I’m all for it then. If you inherit a million dollars or more you already have a ridiculous advantage over the rest of the world.

jfk13 7y ago

Not much; the really wealthy would find workarounds.

almost_usual 7y ago
Really? Doing DNA tests and verifying you are a direct descendant in order to receive income seems pretty rigorous. That would be the only vector of transmission. You could default all other assets to govt and impassable. Liquid only.
- nostromo 7y ago
  Tax havens are a thing, and this doesn't seem like a fixable problem without some sort of draconian world government.
  - IfOnlyYouKnew 7y ago
    Tax havens were a thing. But between all the leaked customer data, the subsequent prosecutions, and plenty of bilateral pressure from the US (2008-20016) and other large and wealthy countries, most tax haven jurisdictions have given in/up. It's not entirely perfect, of course. But there is plenty of evidence that with people in charge actually caring for the issue it is solvable.
IfOnlyYouKnew 7y ago
This sort of defeatism is, unfortunately, as widespread as it is harmful and wrong. Rich people do not have any magical powers. And while they have better resources to find workarounds or get a discount when caught, the law generally applies to them just as it does to anybody else. With just a bit of political will, it would be rather easy to effectively levy such a tax. During the Obama administration, for example, offshore banking saw some drastic changes making it pretty much useless in many cases. Even Switzerland co-operates when you ask unfriendly enough.
- aries1980 7y ago
  > the law generally applies to them just as it does to anybody else Indeed, but the punishment of the law is not proportionate. E.g. stealing billions and stash it, you might end up in a 27-month jail time (http://www.nbcnews.com/id/19293341/ns/business-corporate_scandals/t/former-enron-exec-gets--month-sentence/ http://www.nbcnews.com/id/19293341/ns/business-corporate_sca...) which is a very good hourly rate. Must feel like a meditative vacation after the party-hard years.

umvi 7y ago

Why should the government be entitled to it, though? The government has shown itself to be a terrible steward of wealth. I would rather we prioritize incentives to use existing money more efficiently and cut wasteful spending vs. increasing the amount of money pouring into the coffers.

DaiPlusPlus 7y ago
There is a difference between "the government" and "the state" (not US states, and may also refer to "the people"). It's not that the state is "entitled" to it any more than it's entitled to any other tax - but consider the state is responsible for society, economy and infrastructure: overall the state created value. Whereas what is the moral entitlement of someone who had the sheer fortitude to be born to someone who had amassed that much wealth? And if the state gets a decent amount of income from estate-taxes and it meets its budget-goals and creates value through spending it - or even if it chooses to lower taxes on everyone else instead, then consider who is the real net recipient of the estate tax revenue? - everyone.
lonelappde 7y ago
Estate tax could displace lower end income tax or sales tax.

metacritic12 7y ago

Less inequality for sure. Also, probably half of people who otherwise continued to earn money past the say, $10M mark (as you put it above) would just totally stop. To some this would be really cool: you'd get more artists maybe, and fewer obstinate bankers that continue to plunder society. To others this may be bad if you think those people otherwise would have created value for society.

grecy 7y ago
> To others this may be bad if you think those people otherwise would have created value for society I have to wonder what percentage of people who are earning over $10M lifetime are adding anything substantial to society other than making the economy go up - which as we've seen lately is a crock anyway. I also venture to bet that a deal percentage of those who are would continue to work, even if it's essentially 'for free', because they love what they're doing.

tehjoker 7y ago

What if you couldn't pass anything on at all? What if the only way to guarantee a decent future for your kids is if you work to guarantee a future for everyone's kids?

beatgammit 7y ago
All that would do is make accountants more money. Wealthy people will find a way to pass that along to their children. If there's a 100% estate tax, you can bet that they won't have a penny to their name when they die, since the money will be in a trust in their kids' names or something, or perhaps in a corporation whose CEO position is passed down. You would have to significantly change how everything works to eliminate options for the wealthy. And why would you want to? Most extremely wealthy people seem to be self-made [1][2] (not the best sources, but that's what I found with a quick search). Wealth tends to disappear after 3-5 generations (this article[3] claims 10-15), so that money will likely return to "society" relatively quickly anyway. Solving the "problem" seems likely to discourage the types of activities that lead to massive wealth accumulation, like innovation and investment in innovation, which is a healthy activity for society. Wealth taxes seem a bit like throwing the baby out with the bath water. - [1] https://www.businessnewsdaily.com/2871-how-most-millionaires-got-rich.html https://www.businessnewsdaily.com/2871-how-most-millionaires... - [2] https://www.entrepreneur.com/article/269593 https://www.entrepreneur.com/article/269593 - [3] https://newrepublic.com/article/116462/family-wealth-lasts-ten-fifteen-generations https://newrepublic.com/article/116462/family-wealth-lasts-t...

tracer4201 7y ago

I support the notion of capping how much you pass on after death. I’m against dynasties. I don’t support simply giving that money to the government. In the country my husband is from, government has plundered their national resources and directly the treasury chest. In the towns I grew up in, in the Midwest, I saw similar patterns. My high school didn’t teach calculus, but we took loans or raised taxes to fund football stadiums, etc. Government is not a great allocator. Unless we can create some framework to hold officials accountable, I’m not convinced the billions the Bill Gates of the world leave behind would go to helping student debt (which in my opinion it should) or counter homelessness instead of another 20 year war in the Middle East. Not trying to turn this political but just trying to convey my view.

throwawaysea 7y ago

Why wouldn't people be allowed the freedom to pass on whatever wealth they want? What if they choose to defer gratification and are working to support future generations? Shouldn't that be their individual choice? It seems arbitrary for the government to seize that.