It is very good example of political framing. It evokes the thought of tax as a punishment for dying, and its collection as a kind of harassment of the bereaved. So tax bad, case closed, no discussion.
But of course, it is not death and loss that it taxed, it is rather the accumulated wealth being redistributed over both society at large and the heirs, in some kind of ratio. In favor of inheritance tax: the wealth somebody amassed has also been thanks to its participation in society, so it is only fair some portion of it goes back to society. The heirs played no part in it, so why should they get any, let alone all of it? Furthermore, inheriting wealth goes against the idea of meritocracy, and maintains inequality in an unfair way in modern societies. Why should inheritance tax not be 100%?
Children often grow attached to the 'stuff' their parents have collected, be it things or land, houses or money. It seems unfair to take it all away from them, as they feel they already 'own it' merely by being their children. So inheritance tax is some kind of compromise.
However, as each generation these days tend to fully 'break' with their parents, in a way (economically, spiritually), inheritance itself seems more and more like a thing of our tribal pasts. I imagine a future where there is no inheritance tax anymore, because the whole concept of inheritance will go away.
But wasn't the "society" paid off by all the "living taxes" before the person died?
Imagine having nothing, your parents dying, you, an eg. broke college student inheriting a 2 bedroom apartment, which is somehow worth $1mio, and you owe so much tax (that you can't pay) that you're forced to sell the apartment, the only place you've ever known.
With 100% inheritance tax, i'd literally stop working as soon as i reached enough money to retire. Why work harder if it all vanishes when I die, and my hypothetical kids gain nothig? Or, more realistically, i'd convert stuff to cash and give it to them without the government knowing.
Tax the income, close the loopholes, once the tax for something is paid, the rest should go to the person, the government has got its share, it has enough.
And i'm saying this as someone who already lives in a country without inheritance tax (in most usualy cases).
This leads to what we have today: insane levels of wealth inequality.
Everyone that inherits fortunes from their parents get to live life on easy mode while every one else is poorer, with less assets and barring winning a lottery ticket, no way to ever catch up. Wealth creates a feedback loop that if gone unchecked will hoard all assets from everyone else.
We can't have both meritocracy and inheritance as they are mutually exclusive. If we want to keep telling people there's any modicum of truth to meritocracy, we have to stop all this inheritance bullshit. The particulars of it can be discussed with caps based on amounts, for example, but that's not the point.
There's a reason that most wealthy people from the past are still wealthy today and I can guarantee you it's not through their own merit.
Tax wealth, not work. There should be no billionaires.
> Tax wealth, not work. There should be no billionaires.
NB. This does not mean that Inheritance should be a taxable event! There would be less need to have inheritance tax if we had a consistent wealth tax.
It remains obvious to me that inheritance drives social inequality, and similarly it is obvious that parents are going to resent not giving their children as much help as they can.
Yeah, if we had very effective wealth taxes, I could see it being less relevant. Right now, it kind of works as a very rare wealth tax and is probably dodged quite a lot by transferring ownership beforehand. I'm no expert since but I'm sure it's full of loopholes.
But it's one of the very few wealth taxes we actually have today...
> I'm sure it's full of loopholes.
Yeah, there are a few very well defined loopholes - gifting early, pension wrappers, some trusts, agricultural land, non-dom etc etc - some are being closed. In general the richer you are the more likely you are to be able to minimise and avoid the tax.
A 100% inheritance tax is quite silly imho and very unfair for the parents. One of the reasons many people strive for success is to secure some well-being to their children... well at least myself and many people i know.
Are you actually advocating for an inheritance tax close to 100%?
Because that is completely unworkable IMO, for several reasons:
1) Unless you introduce comparable "wealth transfer"/gift taxes, it becomes completely meaningless for the average case.
2) This would be insanely harmful in cases of unexpected deaths; inheritance is a really bad compensation already when someone close dies, this would make it even worse. And dealing with any kind of shared assets would be a nightmare, too (father dies, mother has to pay tax on half the house?)
Could be workable with large allowances though, but I don't hink you would ever get this pushed through in a democracy because it is too easy to put negative spin on it (even if it was in the majorities economical best interest).
I don't think that inheritance tax is a bad concept, but setting it higher than the gift tax rate is actively harmful and would not achieve anything.
Your view about each generation tending to fully 'break' with their parents, in a way (economically, spiritually) strikes me as particularly narrow. Perhaps it is so where you live, but this is simply not true for vast populations all over the world.
Most populations in the world: Latin America, China, India, Japan, Koreas, the muslims and the jews, and more.
However, I think the grandparent post refered to Great Britain since the paper in question is english.
What happens is gifts are given out before death and names put on houses so the tax is paid by the poor or those who died unexpectedly.
> the accumulated wealth being redistributed over both society
That's fair in principle. Yet in this case but his brother didn't really have enough time to accumulate that much additional wealth after inhering it from his father so it's a bit of a lottery.
Also inheritance taxes are quite tricky to enforce and it's very hard to close all the loopholes (also the revenue isn't exactly reliable). IMHO a wealth tax seems like a better idea (then again there are quite a few complications as well as Norway's recent attempt has shown...).
> because the whole concept of inheritance will go away.
I fear the opposite. As property prices continue increasing and middle and lower class incomes stagnate inheritance might again become one of the few ways that are left for the majority of the population to attain and any significant wealth (I mean middle class level i.e. a hour or two). Birth rates also being so low might make it even more significant.
Let me introduce you to the concept of "property rights." What right do you have to tell someone who they can pass their property on to at their death? Your definition of "fair" is utterly irrelevant.
Property rights are meaningless without a social order that protects them. Aka a government and a civilized society with high trust.
The value of that property increases when others in the society prosper. Government programs funded by “taking people’s money” (aka taxes) very often make “private” property more valuable.
People with the “f*ck you, got mine” mindset either don’t get this or selfishly don’t care (sometimes for understandable reasons, e.g. they come from a low trust area).
Of course, there are lots of nuances and complex implementation details. Like how much exactly does a specific program affect different groups and on what time scales. But the fundamental principle is straightforward and essential to a healthy society.
Saying "you don't have a right to pass on your property to your family" is the opposite of high trust. I'll grant that the moral answer beyond a certain point is to limit your children's inheritance to what will give them a comfortable life, and then engage in philanthropy a la people like Andrew Carnegie.
But claiming the government has to force people into this is low-trust to the extreme. It's saying "we're going to take these things we already taxed you on, because you can't be trusted to use them responsibly and we can."
You can't regulate your way into everything. Good government can only exist alongside the unwritten rules that made people like Carnegie decide that the right answer was to give their wealth away to the public.
2y ago
Ofc they grow "attached", because it's free shit - I'd say it's got 99% nothing to do with nostalgia or attachment to their parents and more a huge boon to their wallets. The number of people that whine about inheritance taxes is ridiculous. Almost as ridiculous as the number of people (on here especially) that think that owning a second/holiday home is practically a human right (for them).