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Why does this get down voted? Even if you don't agree with the idea; it has been proposed in a calm and reasonable manner.

Care to explain?

It's pretty hard to discuss such things without people getting emotional and defensive. I think people look at something like this and say "but that's not fair I earned all my money"[1]. They don't look at it and think about what the world would look like in such a scenario, how they might have lived differently, how they would instead spend their money before death (perhaps making the world a better place), or how they might have less concerns about needing to pass on money to their children because their children would be "just fine" in the society they created under this system.

[1] ignoring the whole subject about luck and what it means to earn something when two equivalent folks just have different dice rolls go their way, etc. Or especially in the context what it means to earn something when you just inherited it. (I have a bunch of friends who have inheritance coming their way and just totally expect it, they lead very different lives because of that than those I know who don't have that.)

It wouldn't actually work. Rich people end up finding loopholes to any tax scheme. Even if that loophole is expatriating.

It would have negative consequences besides that. Many, many people do things for "legacy". It's a powerful motivator. Taking away all wealth would eliminate something that encourages good long-term decision making.

It would hurt people who aren't the rich people. What would happen if Sam Walton's net worth was taxed when he died? Massive disruption to Walmart employees at a minimum. How would the net worth be calculated? Well, given his net worth, he'd be irresponsible not to have an army of lawyers and lobbyists making sure the number is as small as possible.

So, given the above, the idea isn't that simple.

Finally, there are ethical implications to that sort of policy. It implies that citizens earn at the pleasure of the government, not that the government rules by the consent of its citizens.

Yes, I look forward to being barred from sharing the wealth that I've accumulated with my children and other loved ones. Why should they have any advantage, right? After all, you probably think I didnt do anything myself, right?

Who are you to make that decision for someone?

And, frankly, you're delusional if you think an estate tax is non distortive. The entire meaning of wealth would change for the elderly.

One cannot treat wealth like a zero sum game. More importantly, we need to rid ourselves of this growing crabs in a bucket mentality, because we all suffer when we hold society's best back. Is it "fair" in the sense of absolute wealth? No, but people shouldn't be so focused on their neighbor's plate then theirs is full enough that they can spend hours complaining online about how much more money the 1% have. Perhaps we should redefine fair wealth distribution to rightfully consider merit, which is shockingly absent from the majority view here.

This thought experiment isn't about looking at your neighbors plate, it's about incentives for us as a society. I think the question to answer for yourself is whether you think everyone should start with a fair playing field or not and the implications such a tax would have on how you structure society to ensure that everyone gets the same shots at a good life.

There is substantially more value for all of us in allowing more resources to be distributed to those who are able to do more with them.

And your definition of "fair playing field" is skewed because, again, you treat economics as a zero sum game. You are making the classic mistake of conflating equality of outcome with equality of opportunity.

In any case, this class warfare inspired policy of exhaustively taxing wealth won't fix a mismanaged budget or a broken scholarly culture. You are simply punishing the people who seem to have benefited most in the context of the system while ignoring merit.

Further, it is absolutely absurd to suggest that modern people in poverty dont live "good" lives. They have refrigeration, air conditioning, entertainment, access to the internet, emergency healthcare, they live like kings once did. Once again this is a problem of looking at other peoples' lives and concluding that only in comparison you deserve more for simply existing.

Taxation will not fix what is fundamentally a cultural problem.

Aside: Look at how absurd the entire argument is! We dont question in absolute terms how our poor are living, we focus entirely on the fact that the wealth is distributed unevenly. Like children complaining that their classmates have extra candy. The whole mindset is petty.

> There is substantially more value for all of us in allowing more resources to be distributed to those who are able to do more with them.

Don't you think that inheritance is a pretty bad way of achieving that? After all, traits like intelligence (which probably dominates the ability to use resources efficiently) are only about 50% heritable.

When intelligence is literally the trait which enables development of science and technology, who in their right mind would not spend money on children of intelligent adultst with a 50% success rate? Dont you realize someone on the high end of the IQ curve would be exponentially more beneficial to society if given resources? How much have a couple hundred visionaries shaped our daily lives?

Why dont we spend more federal funds on gifted children? We watch the trainwreck that is our school system as we fail to match pupils in other countries at senior high school level. The issue is, again, not taxation, on the contrary, we are not spending enough where it counts because of the greed of the entitled.

I think you're reading a lot into the comment you're replying to that wasn't there. Sounds more like he's coming from a rawlsian perspective of what constitutes a just society.

>You are making the classic mistake of conflating equality of outcome with equality of opportunity.

Outcome and opportunity is a false dichotomy. But if we were to go along with it, isn't a tax on inherited wealth a great way to maintain equality of opportunity?

I think you are right about leaving something to our children. It's a very natural human (mammal!) instinct, but there are a lot of middle ground between don't leave anything and leave them an empire.

About merit, I think I know about merit. If you take the public transport at 5:30 in the morning you will see a lot of people that go to work for years for a ridiculous small pay and, that if they stopped doing that, society as we know would stop. That, I think, have a lot of merit.

On the other hand, in any standard corporation, you can find people with huge wages, with company car, that never pay a lunch because they put in the expenses account and that employ its time in political movements to try to go up in the ladder.

Of course, if you think that markets give everyone whatever they deserve, or you have not been in the public transport at 5:30, then, what I'm saying doesn't make any sense.

basically, your argument is that you know better than the market. Let me assure you, this isn't so. Source: grew up in the USSR.

Markets are optimization processes, so, very powerful tools.

Leaving the metric to optimize to the optimization process doesn't look a good idea, the same way it's not a good idea to leave the thermostat to choose the temperature.

In my experience, the only people that think that the thermostat it's who should choose the temperature, it's the people that feels very comfortable with the current one and don't care about the comfort of the others in the house. Or, maybe, also the people that grew up in a house without thermostat and thinks, correctly, that anything is better.

I really like your analogy, but what did you mean by "anything is better"?

Yeah, sorry, it was not well done. I mean, anything is better than a house without a thermostat, even a house where the thermostat is the boss.

Hmm... wouldn't that just result in people transferring the assets to their heirs before they died?

Could do. That might be captured sufficiently by the gift tax though. A bigger issue could be evasion through establishing trusts and the like.

Then you just donate the money to institutions your progeny would just happen to enjoy: your alma mater, the country club, private schools, etc. Segregation would still be maintained through astronomical real estate prices.

Your position is that increasing the estate tax would do nothing to help segregation? Or that it wouldn't do enough and we should also do more?

I'm not confident enough to make a definite prediction, but it seems plausible that it could make some forms of inequality worse. Attempts to level out education, for example, have resulted in the truly wealthy finding other outlets (private schools, expensive zip codes) to create the educational experience they want for their children.

In education we never actually integrated though. A few locations were integrated but only for a little while. It seems more like that the truly wealthy found those outlets regardless of what else was happening in education. It also seems strange to say: we shouldn't tax rich people because somehow, through a plausible method that I can't explain or predict, it will make rich people better off and poor people worse off.

I was referring to public schooling in general, not racial integration specifically. Integration among social classes is arguably getting worse now. You only go to school with the kids of bank vice presidents if you can afford to live in the same neighborhood.

The U.S. has a "unified" gift and inheritance tax. If you give away $5M while you're alive and die with an estate of $5M you (1) pay no tax on gifts while alive, and (2) your estate pays tax based on an estate size of $10M at the time of your death. There are a few wrinkles (e.g., (1) annual per-person exempt gifts of $14k/person, and (2) you do start paying tax on gifts while you're alive once total gifts pass a certain value), and gifting during lifetime has some advantages (e.g., getting growing assets out of your estate while they have a lower value), but that's generally the way it works. Gift tax and inheritance tax operate on a "unified" basis.

With the assumption that the State is the best ward for your money. Do you fully trust the State to be willing and able to stamp out inequality?

Why must we 'fully' trust the state? We just have to trust it more than the markets.

States have killed many more people than markets have.

This strikes me as too facile to be particularly useful.

First, it's much easier to get a rough idea of how many people states have killed than markets, to be sure. But many wars are fought and nations are conquered (and, for that matter, created) for market-driven reasons: oil, tea, diamonds, slaves, to name a few egregious examples off the top of my head. Millions of people have died throughout history that would not have if states were not acting to protect, expand, or create markets.

Second, while it's probably harder to get a rough idea of how many people states have saved than markets have, the number is not inconsequential. I certainly wouldn't suggest states are forces for unrequited good--there's copious valid criticism of them across the political spectrum--but I would suggest that they're hardly forces for unrequited evil, either.

We first need to know that the current taxes are fully spent on the right things and that the "pork" spending is not actually larger than the amount needed to satisfy the needs expressed by the current movement.

"Non distortive" You can't imagine a way a tax like that would change people's behavior? People would give their money to their children before they die, or spend it all on themselves, and maybe some would work less because they were previously motivated by building up assets to give to their children.

I never understand why someone working less is considered a bad thing. If a person works less that leaves a vacuum for their services which will then be filled by another market actor.

On an individual level - correct. On a society level - not true anymore as you are reducing the effective size of the workforce.

If you think the economy is a zero-sum game then it's not a bad thing. If you think wealth can be created and that society benefits from a population with a high labor force participation (like Scandinavia for instance), then it's a bad thing.

Two arguments against a death tax: the inability to apply it, and the results of an effective one:

In Argentina, the state collects a heft tax on property transfers when the propietor dies. So basically all property is donated from parents to children in-life.

Poorer property owners that cant afford or dont know better, or people stricken with tragedy in an early death are likely the ones that pay the most of that tax.

Conclusion, 'death taxes' are paid by the poorer half and hence worsens inequality.

On results: lets say that I were to tell you that all the money in your bank account is going to be worth 0 tomorrow. Are you going to invest that money in long term capital growth? Are you going to donate it to the government? I'd say the most reasonable reaction is drugs and hookers all the way!

The latter is definitely not great economic policy.

Actually forcing people to spend their money before death would be really good for the economy (despite you picking illegal activities for the negative connotation.)

And the real solution isn't a 100% tax but 100% tax over some lower amount, say $50,000 along with lowering the yearly gift tax exemption.

Inherited wealth is anathema to meritocracies.

> Actually forcing people to spend their money before death would be really good for the economy (despite you picking illegal activities for the negative connotation.)

Well, this is were we clearly disagree. I am very certain that if i knew that i was going to die in 6 months, id be burning all my money into some kickass 6 months with "Burguers" and "Premium Tinder accounts". Consumption vs Investment is a core battle between Keynesian and Chicago School economics, so it depends on which you subscribe.

> meritocracies.

I actually do wonder who argues in favor of meritocracies. Sure as hell not liberal-economics.

"Get what we deserve? I hope to god we don't get what we deserve" - Milton Friedman.

> And the real solution isn't a 100% tax but 100% tax over some lower amount, say $50,000 along with lowering the yearly gift tax exemption.

This just compromises the original concept of equality of opportunity: if you do that, anyone below 50k will be in an unfavourable position relatively. So what you did with that limit is imposing something on a group, intended to be a minority that wouldnt be able to repeal such rule. The fact that these rules end up like this has been extensively exposed by people like MF.

I'm no Friedman acolyte. Are you actually opposed to meritocracy?

I think the concept of a meritocracy requires someone to decide what is meritocratic and all goes to hell from there.

Its like saying that you are going to base justice on "protecting good people and punishing bad people".

I can be swayed otherwise if I was shown what a meritocratic system would look like, but most of the times I heard that word it was as a criticism of laissez-fair capitalism that would rarely claim to be meritocratic.

>Its like saying that you are going to base justice on "protecting good people and punishing bad people".

That's exactly what our justice system is... Sometimes we fail at abstracting our morality to the courts but that's exactly what our goal is.

>I can be swayed otherwise if I was shown what a meritocratic system would look like, but most of the times I heard that word it was as a criticism of laissez-fair capitalism that would rarely claim to be meritocratic.

So your logic is "people usually use meritocracy as a knock against capitalism" and then establish your premise? "meritocracy is bad"? Doesn't make any sense. A perfectly meritocratic system doesn't exist and probably never will but systems which try to promote equality of opportunity are generally good. Our defense of "meritocracy" comes from the Rawlsian veil of ignorance. Behind it, it becomes obvious you would want to live in a society which provides a relatively equal chance for everybody and which, if you seize that chance, will reward you.