I've never understood why people think that just because, e.g., their parents created a business worth millions of dollars, they should get that for free.
Why don't I have a downvote button for this?
Adam Smith: "There is no point more difficult to account for than the right we conceive men to have to dispose of their goods after death."
This is taxation for policy reasons, not income.
The inheritance tax is not a Pigovian tax, but its purpose can also be primarily non-budgetary.
Economic mobility should be solely predicated on the expression of competence/ability in the pursuit of providing value to others in your society. It's not even that hard[1]. Get an education and a job, avoid the big economic sinks.
> This means that 40 percent of why some Americans are extraordinarily well off has nothing to do with smarts, hard work, frugality, lucky gambles or entrepreneurial ingenuity. It is simply because they were born to rich parents.
We should not fear the money landing in undeserving hands, it will rapidly be drained away if that is the case. Many(most?) very wealthy families employ wealth managers that ensure that money is profitably engaged with the society anyways, so in reality the money is not really in the heir's hands anyways, but is tied up in companies that are serving the country and employing others.
[1]: https://www.brookings.edu/opinions/three-simple-rules-poor-t...
Post-tax dollars aren't magical things that mean you never pay taxes again. They're just an accounting tool that makes dealing with some tax-exempt activities easier.
"Some will argue that this example ignores any income and payroll tax the wealthy parents paid when they originally earned the $50 million. But if the couple paid their personal chef’s wages out of after-tax income, we wouldn’t think their personal chef should get credit for the taxes they paid. Similarly, we should ignore any income or payroll tax the couple paid when considering how much their son should contribute to the costs of government."
Unless you were a truly stingy person in life, your affluence will have already have had huge positive impacts on those near and dear to you. Once you're dead, why should they be any more important than any other person?
Why favor your family, friends, or countrymen over any other person during your lifetime either? Everyone behaves this way. For example, why does government sponsored health care in western countries only cover their own citizens? Do the lives of people in less affluent countries not matter? Do they have less intrinsic value?
Most governments enforce a person’s will after they die. People generally elect to distribute their property to particular people, specifically to avoid it ending up in the hands of “we, as a society”.
It really just sounds like you think we are all children under one global nation.
I personally will never agree to that, and want my offspring to do better than the rest so we will be at odds at some point.
I could go on. Art collection, old cars, even immaterial rights or stocks that are massively undervalued right now for one reason or another (for instance because the founder just died suddenly).
Inheritance taxation is inherently unjust because it cannot distinguish between goods that are easily traded for and the ones that cannot easily be sold.
There is plenty more you can read on the topic. The general idea is that it helps create a meritocratic society.
Given that, is there anyone who could possibly need their money less than the dead?
Sure there is. They'd still get to keep the majority of it.
That's all the rest of us have going for us. Passing on billions isn't even an option.
If I knew he would not get it, or would get less than half of my savings/everything else, I would not work a single hour above what we need currently to live as we do, taking decreasing tax revenue for my country. Maybe I am biased as I also am set to receive some money when my parents die, but my grandfather immigrated, worked his ass off, built savings, returned here, started a business, built properties, my father inherited it, and works hard to keep them well so I inherit them, which I will do the same for my kid. What would be the point of my grandfather sacrificing a lot of his life away from his home if not to build a better future for his future generations?
For you to have an idea, Currently, for every euro I get, I pay in taxes+social security+etc(all the little taxes around everything) around 60% of the money to the government.
'I've never understood why people think that just because, e.g., their parents created a business worth millions of dollars, they should get that for free.'
Communist policy makers assumed worker-cogs that thought nothing of providing for their family which resulted in people’s productivity falling dramatically and the resulting mass starvation, etc. (historians cite >100M deaths from attempts at implementing communism! yikes)
It's understandable that (grand)parents want to do right by their (grand)kids, and leaving them a pretty penny is a pretty thoughtful thing to do. But when this then has huge negative effects on society, it stops being a nice thing to do. Inherit for free up to a certain amount. Redistribute the rest.
The question is never about what the children think they deserve, it's entirely about what we as human beings work for. Most parents don't care about their own consumption, and instead work entirely for the well-being of their children. It doesn't matter what the children think. The argument is that it matters what the owner of that wealth thinks should happen to their own wealth, and that nuclear family values are deeply entrenched in society.
There are a number of arguments that you can make that the cost of inter-generational wealth and the benefits of taxing it far outweigh the familial considerations of wealth transfer (especially after a high enough dollar amount). But THOSE are the arguments that we need to be making.
― Upton Sinclair
“Men sooner forget the death of their father than the loss of their patrimony”
― Niccolò Machiavelli
As a result, the split between poor and rich will widen and widen. Until at some point, where the situation will implode or be unfavorable in some significant way. Hence, to have a stable system, the limitless accumulation of wealth should be reduced.
There should be inheritance, of course, and half of few million is still lot. However, this requires some progressively adapting tax percentages, based on the amount of inherited wealth.
None of your business?
Because it is their parent's wealth to do with as they please? Why does death suddenly mean all or some of what you have worked for now belongs to the state? Why do the rules change when it comes to children of an estate compared to a spouse? That spouse could be there as little as a few months by the way law works.
It has been taxed as it was earned and accumulated. When it gets spent it will be taxed as well. If it is the transfer of investments they will be taxed when the recipient uses them.
It is private property and we need to stop with the jealously angle being the primary motive of voiding that right. Oh I know, some will fire back with fairness well if it is not fair for the child of a person to receive their wealth in death how was it ever fair for the person to have it in the first place?
Got to love that article, lamenting that the funds about twenty three million are ONLY taxed at forty percent. Seriously why are they taxed at all.
If I'm able to leave some money for my kids and save them from the grind i've spent the best years of my life enduring I don't see how the government has any right to one penny.
You can, however, come up with an idea that improves the lives of 1 billion people by $10 worth. It turns out that ideas are more important to improving the state of humanity than kW/hr output of hard work.
You may be arguing that being one of the billions whose life was improved by $10 is ‘others doing it for you’