Hacker News Reader

Comment by robertlagrant | Hacker News Reader

I think inheritance tax has huge downsides. Past a certain age, if you've done reasonably well, and are thus most likely to make a huge impact for the better in your latter working years, why do that most useful useful work if you can't pass it on?

View on HN

We can do it incrementally, so that majority op population is not affected much. And if a billionaire is discouraged from earning additional billions and retire - well, that was the point? He stops working (hypothetically) but his place will be immediately replaced by less wealthy successor (or by more wealthy opponent, but that problem need be analyzed separately). His kids won't become billionaires, but will be a mere millionaires, requiring them to contribute if they want to keep up expenses. All in all I think it is possible to set up such inheritance taxes so that majority will have positive result.

If you're thinking about billionaires, I think you're doing it wrong. Billionaires don't have billions in the bank. They generally have shares in companies which need to be sold to get money out. And the price changes the more you sell. Billionaire "net worth"s are almost useless because they assume each share they sell is worth the same as the last share traded, which would not be the case if they were all dumped on the market, and even less so if the government made a habit of seizing your shares when you die.

Do the work because it's enjoyable. If it's no longer enjoyable, enjoy your wealth while you have it, and retire.

This is what I mean. It's likely dangerous to disincentivise so many people in their most expert years from working.

Perhaps - I would think in many cases, an equilibrium would be reached. Comparatively few people in any industry are wholly irreplaceable. Still, should something like this just pop into law tomorrow, one could expect a large group of experienced specialists at the top of a wide array of fields to decide to retire, to disasterous effect. Given time to settle in though, I'd wager it likely that talent would filter up to replace any losses at an equivalent rate.

Ultimately, people as a whole like to work. They dislike working under poor conditions or doing jobs that don't feel rewarding. A law like this would generate a lot of change, but I just don't see that change being disasterous given sufficient adjustment time.

Talent won't filter up. You can't replace doctors with 40 years' experience with doctors with 30 years' experience (and keep going - who do you replace them with?) without losing a huge amount of value.

Our goal as a society should be to maximize happiness, not maximize the number of people who are working.

You can pass it on, but you have to pay taxes on it

We have that today. For some people it's not worth working, and they might as well retire and stop contributing. As we raise the inheritance tax rate, that number will drastically increase, and we get to raid some one-off money in exchange for much less productive work.

Reply on news.ycombinator.com