5 ms·

It‘s unfair to keep large amounts of generational wealth untaxed in the family while hard working people are taxed.

voisin 4y ago
I think the answer is to treat capital gains and dividends the same as ordinary employment income and subject to the same tax rates. Perhaps introduce a sub-1% wealth tax per annum on very large fortunes (100m+) to add friction that the wealthy have to work to counteract.
- bushbaba 4y ago
  *and to treat loans against capital assets as taxable income. Otherwise we’ll keep seeing the wealthy avoid taxation by loaning against their assets. So long as rates stay relatively low.
- TechBro8615 4y ago
  Maybe stop taxing any of it...
someguydave 4y ago
maybe the government should tax consumption instead of work or investment?
- c22 4y ago
  Most governments seem to tax all of these things.
c22 4y ago
Two hard working people are born in poverty. They each work hard and reap the rewards of their success. They both pay income tax on their gains. One of the people spends their lifetime of accrued wealth on themselves, buying a nice car, a huge house, and luxury goods they don't really need. The other person is concerned about the future of their only child and lives well below their means, when they die they will their estate to their child who immediately stops working and never works again. Is that fair? Now consider a third person who also cares for their child. This person also lives frugally but instead of saving their wealth every year they buy their kid fancy cars and luxury goods. They die penniless but their kid never had to work a day in their life. Is that fair?
- kelseyfrog 4y ago
  It confuses work ethic with fairness. It works because we incorrectly associate good work ethic with positive outcomes. This is a particular to our current time and place in society and we should be very cautious when attempting to universalize it. It would be good to reframe it with consequentialism in mind to reveal the unspoken truths of the examples.
- saghm 4y ago
  > Two hard working people are born in poverty. They each work hard and reap the rewards of their success. They both pay income tax on their gains. One of the people spends their lifetime of accrued wealth on themselves, buying a nice car, a huge house, and luxury goods they don't really need. The other person is concerned about the future of their only child and lives well below their means, when they die they will their estate to their child who immediately stops working and never works again. Is that fair? Ten generations later, the descendants of the first person have all been able to expand their wealth purely due to the wealth that their ancestor had. None of them have had to work hard for generations, but they all vigorously defend their right to give their wealth to their kids without taxes so that they also don't have to work hard. Meanwhile, the descendants of the second person are unable to acquire wealth due to the advantage that people like the first person have in controlling capital, and they all work menial jobs for people like the first person. Is that fair?
  - voisin 4y ago
    No, it isn’t fair but that can be avoided by adding friction to wealth via an annual wealth tax, and then only applying it on the largest (100m+) fortunes. I don’t think anyone thinks someone who works hard and saves shouldn’t be able to pass on a few million, or even tens of millions, to their descendant. But what you refer to is equally true - no one but the beneficiaries agree that someone should be born into monstrous wealth and be able to sustain generation after generation on the basis only of winning the ovarian lottery. I, personally, would have a tax of 100% on all wealth over $100m.
  - philwelch 4y ago
    It would take an extraordinary amount of discipline to maintain that wealth ten generations down the line. “Rags to rags in three generations” is a saying for a reason.
cf141q5325 4y ago
Parents payed taxes when they acquired their possessions. I dont see why they should have a double tax burden.

I think the answer is to treat capital gains and dividends the same as ordinary employment income and subject to the same tax rates. Perhaps introduce a sub-1% wealth tax per annum on very large fortunes (100m+) to add friction that the wealthy have to work to counteract.

bushbaba 4y ago
*and to treat loans against capital assets as taxable income. Otherwise we’ll keep seeing the wealthy avoid taxation by loaning against their assets. So long as rates stay relatively low.
TechBro8615 4y ago
Maybe stop taxing any of it...

someguydave 4y ago

maybe the government should tax consumption instead of work or investment?

c22 4y ago
Most governments seem to tax all of these things.

c22 4y ago

Two hard working people are born in poverty. They each work hard and reap the rewards of their success. They both pay income tax on their gains. One of the people spends their lifetime of accrued wealth on themselves, buying a nice car, a huge house, and luxury goods they don't really need. The other person is concerned about the future of their only child and lives well below their means, when they die they will their estate to their child who immediately stops working and never works again. Is that fair? Now consider a third person who also cares for their child. This person also lives frugally but instead of saving their wealth every year they buy their kid fancy cars and luxury goods. They die penniless but their kid never had to work a day in their life. Is that fair?

kelseyfrog 4y ago
It confuses work ethic with fairness. It works because we incorrectly associate good work ethic with positive outcomes. This is a particular to our current time and place in society and we should be very cautious when attempting to universalize it. It would be good to reframe it with consequentialism in mind to reveal the unspoken truths of the examples.
saghm 4y ago
> Two hard working people are born in poverty. They each work hard and reap the rewards of their success. They both pay income tax on their gains. One of the people spends their lifetime of accrued wealth on themselves, buying a nice car, a huge house, and luxury goods they don't really need. The other person is concerned about the future of their only child and lives well below their means, when they die they will their estate to their child who immediately stops working and never works again. Is that fair? Ten generations later, the descendants of the first person have all been able to expand their wealth purely due to the wealth that their ancestor had. None of them have had to work hard for generations, but they all vigorously defend their right to give their wealth to their kids without taxes so that they also don't have to work hard. Meanwhile, the descendants of the second person are unable to acquire wealth due to the advantage that people like the first person have in controlling capital, and they all work menial jobs for people like the first person. Is that fair?
- voisin 4y ago
  No, it isn’t fair but that can be avoided by adding friction to wealth via an annual wealth tax, and then only applying it on the largest (100m+) fortunes. I don’t think anyone thinks someone who works hard and saves shouldn’t be able to pass on a few million, or even tens of millions, to their descendant. But what you refer to is equally true - no one but the beneficiaries agree that someone should be born into monstrous wealth and be able to sustain generation after generation on the basis only of winning the ovarian lottery. I, personally, would have a tax of 100% on all wealth over $100m.
- philwelch 4y ago
  It would take an extraordinary amount of discipline to maintain that wealth ten generations down the line. “Rags to rags in three generations” is a saying for a reason.

cf141q5325 4y ago

Parents payed taxes when they acquired their possessions. I dont see why they should have a double tax burden.