how much it would cost them to run investments? We know how much it costs them to collect money and do correspondence (aka mail stuff). While the SS administr

how much it would cost them to run investments? We know how much it costs them to collect money and do correspondence (aka mail stuff). While the SS administration is legally prohibited from running investments you can look at other government agency's that do so and it's significantly lower overhead than even cheap index funds. As to the actual costs of buying and selling stocks you can do that with moderately complex software buying 1000x as much stock is not a hard problem. http://en.wikipedia.org/wiki/Algorithmic_trading http://en.wikipedia.org/wiki/Algorithmic_trading If those expensive ones: There is a lot of research that shows high fee mutual funds simply have a lower returns. but for a quick summary: http://bonds.about.com/od/bondfunds/a/Why-Invest-In-The-Lowest-Fee-Mutual-Funds.htm http://bonds.about.com/od/bondfunds/a/Why-Invest-In-The-Lowe... Buffet in support of index funds: http://articles.marketwatch.com/2007-05-07/finance/30714109_1_index-funds-exchange-traded-funds-etfs http://articles.marketwatch.com/2007-05-07/finance/30714109_... putative differences in income inequality Taxing wealth and not the income that wealth generates is not inherently punitive. What it does is eat's away at fortunes that stick with ultra safe investments in favor of the risk takers. Because I don't think income / wealth inequality is inherently bad, what's dangerous is type of back room deals /networks that favor 'old' money. In the end I don't think there is much you can do to prevent insider deals, but you can put a damper on what it means for your great, great, grand father to have built a modest fortune that was managed reasonably well after that. PS: I have plenty of rich relatives, heck my grandmother went to Harvard and one of my closet friends growing up came from 'old' money with multi million dollar trust funds so I may be a little to close to be objective on this one. But, on net I don't have a lot of good things to say about what happens when your parents inherit wealth and you can look forward to more of the same.