General Abolish inherited wealth?

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Should inherited wealth be abolished?

  • Yes

    Votes: 5 20.8%
  • No

    Votes: 19 79.2%

  • Total voters
    24
T

The Big Guy

Guest
Allowing wealth to accumulate from one generation to another is a recipe for unacceptable inequalities. We should abolish inherited wealth.

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"In Charles Bukowski’s novel Hollywood, the protagonist Hank Chinaski reflects on the importance of home ownership to his father. “Look,” Henry Chinaski Sr once told him, “I’ll pay for one house and when I die you’ll get that house and then in your lifetime you’ll pay for a house when you die you’ll leave those houses to your son. That’ll make two houses. Then your son will…”

Hank thinks this is ridiculous. What if after accumulating ten houses in ten generations, the eleventh Chinaski gambles them all away? Better to live for the moment.

Anyone who cares about creating a society without landlords should have the opposite concern. What if the Chinaski family’s holdings do accumulate as planned?

In ways much more serious than petty real estate fortunes, inherited wealth has a massive effect in fueling economic inequality — and the problem is getting worse. As of the most recent data I could find, the amount of inherited wealth going from one generation to another each year is up 119 percent from 1989, even when inflation is taken into account. According to United Income founder Matt Fellowes, a “historically unprecedented” amount of money is going to be flowing from one generation to the next in the next few decades.

The right wing has done a good job of demonizing even modest efforts to tax these transfers, branding the tax on large estates as a ghoulish “death tax.” That’s obviously ridiculous. But how would a better society handle the inheritance issue?

Socialists want to take the means of production, distribution, and exchange away from their current owners and bring them under social ownership. Some blueprints for what such a society might look like involve state ownership of nearly everything, or even eliminate money as a medium of exchange.

I’ve argued that a more realistic vision of the kind of socialism we could bring about, without waiting for massive technological progress to solve the logistical problems raised by trying to plan an entire economy, would involve nationalizing the “commanding heights,” taking many important public goods out of the market entirely and bringing the remaining private sector under worker ownership.

These individual elements have all been successfully beta-tested in the real world. But the combination would mean the first society since the agricultural revolution that wouldn’t be divided into a powerful ruling class and a subservient labor force.

If Henry Chinaski Sr had been born into such a society, whatever income he built up couldn’t have been derived from exploitation. That doesn’t mean every penny of it would be his to do with as he liked, since he would still have to pay a significant portion of it in taxes to fund the massive public sector. But he would have a reasonable claim to spend whatever remained however he chose.

Such a society could democratically decide to outlaw individual home ownership, but I have a hard time imagining that. Most working-class people today would be horrified by that suggestion. Nor is this just an eccentricity of American culture: think about Palestinian refugee families who lovingly pass down the deeds to houses that were stolen during the Nakba from parent to child to grandchild, in the hopes that one day the family will be able to return home.

It’s just barely possible that under socialism, when the state (or tenant cooperatives, or a combination of the two) has universally replaced private landlords, global cultural attitudes would shift so dramatically that the majority of the population would be on board with banning home ownership. But what if that doesn’t happen?

Letting real estate accumulate in individuals’ hands is a good way to reintroduce landlordism. Letting very small businesses owned by one person with no full-time employees be passed on from one generation to another could easily reintroduce full-blown capitalism. And existing capitalist democracies have shown us that a sufficiently unequal distribution of wealth will always find some way of translating itself into an unequal distribution of political power.

Banning all inheritance would be too draconian. If your mom dies and she wants to leave you her lovingly preserved packing crate of vinyl Kenny Loggins records, nobody should stop you. And in any case, it’s difficult to imagine a proposed law to do that getting very far in a democratic society. Nor should Clint Eastwood’s character in Gran Torino have been prevented from leaving his beloved car to Bee Vang’s character. It’s even reasonable that Henry Chinaski Sr should have been allowed to pass on a single house so that his ungrateful son could actually live there.

But a just society would have to take a hard line against wealth snowballing from one generation to another.

An Estate Tax of 100 Percent
The way to abolish inherited wealth without abolishing inherited Kenny Loggins records, cars, or personal dwellings is simple: introduce a strict upper limit on the value of assets that can be passed down from one generation to the next. The estate tax on assets beyond that limit would be 100 percent.

In most contexts, a 100 percent tax would be counterproductive. If all or even part of the point of any given tax is to raise revenue, people need an incentive to produce the income being taxed. Existing empirical evidence seems to show that this incentive is preserved even at very high marginal tax rates. But someone who gets literally nothing for producing some extra bit of income has no reason to produce it.

But the point of a 100 percent estate tax wouldn’t be to generate revenue. It would be to create a society not distorted by the effects of intergenerational wealth accumulation. We don’t want anyone’s incentive structure to include the hope of indirectly enhancing their children or grandchildren’s income.

Some centrist and right-wing critics would argue that this is counterproductive in itself. Doesn’t a dynamic economy need the hope of intergenerational wealth accumulation as a motive for productivity?

The first thing to say about this is that the people who end up having huge estates to pass on to their children are the ones who arrange what’s produced and how, but they aren’t doing most of the actual work, whether we’re talking about menial labor or research and development. And even under capitalism, many voluntarily childless people are strongly motivated to excel at their chosen careers and produce wealth. So the point shouldn’t be exaggerated.

That said, it’s certainly true that people with children usually care a great deal about what kind of lives their children will lead. Realistically, empowered workers in socialized businesses would be intensely interested in how their decisions in the present impacted the lives lived by their children in the future.

But this isn’t a reason to preserve inherited wealth. It’s a reason to abolish it. We want to live in a society where people know that, beyond passing on personal possessions, the only way to provide economic comfort and security to their children today is by lavishly funding public goods that will also guarantee the economic comfort and security of everyone else’s children tomorrow.

Abolishing inherited wealth, in other words, is a good way to safeguard the collective inheritance of every new generation."

 
T

The Big Guy

Guest
This might be one of the stupidest things I've ever seen

Further incentives for people living off of handouts to continue living day by day instead of trying to gain ownership of something or have an investment of any kind.

Consume and obey
 
M

member 1013

Guest
This might be one of the stupidest things I've ever seen

Further incentives for people living off of handouts to continue living day by day instead of trying to gain ownership of something or have an investment of any kind.

Consume and obey
Well you are reading Jacobin Magazine, it’s fully socialist. Everyone knows a capitalist economy with strong regulation and a strong social safety net is the way to go. Gosh.

Also please don’t make fun of my lifestyle.
 

SongExotic2

ATM 3 CHAMPION OF THE WORLD. #FREECAIN
First 100
Jan 16, 2015
39,772
53,672
You give to your kids the day before you kick the bucket.
There's already some sort of tax. My dad has mentioned putting his assets into my name before he croaks. Apparently the government gets less of it.
 

Qat

QoQ
Nov 3, 2015
16,385
22,624
Reads like a fantasy text.

You guys have some sort of inheritance tax already anyway, right?
 

Hauler

Been fallin so long it's like gravitys gone
Feb 3, 2016
45,412
57,814
Reads like a fantasy text.

You guys have some sort of inheritance tax already anyway, right?
Depends on where you live, but most states don't.

Only the rich get hit with estate taxes - they have to be worth like $12 million.

Very few states tax inheritance. Not sure which ones do - I know it's under 10 states - but I know Kentucky is one of them. Ohio and Indiana do not.

You can be taxed on capital gains if you sell an asset you inherited.

Regardless of what state you are in, there is an annual untaxed cash gift limit to prevent what SongExotic2 @SongExotic2 mentioned. I think it's $15k.

All of this can change depending on who is running the Government.

As far as the posted article - Cancelling inheritance is the dumbest fucking thing I've ever heard of.
 

Hauler

Been fallin so long it's like gravitys gone
Feb 3, 2016
45,412
57,814
Good luck tracking cash.
The assumption is most gifts at that amount are done via check or transfer.

But yeah, Uncle Guido with a briefcase full of hundies certainly isn't reporting it to the IRS.
 

BeardOfKnowledge

The Most Consistent Motherfucker You Know
Jul 22, 2015
60,547
56,268
The assumption is most gifts at that amount are done via check or transfer.

But yeah, Uncle Guido with a briefcase full of hundies certainly isn't reporting it to the IRS.
I can guarantee you that if you tell Jeff Bezos that his kids trillion dollar inheritance is going to be taken by the government he'll be burying money in fields like Pablo Escobar.
 

NotBanjaxo

Formerly someone other than Banjaxo
Nov 16, 2019
8,305
17,709
In Britain, inheritance tax kicks in at £325,000 (that's per person, and it carries over for a husband and wife). After that it gets taxed at 40%.

Therefore once a couple pass away, 40% of everything over £650k goes to the government.

Many people try to circumvent this by giving money / property etc to their children before they die, but if it was given in the 7 years prior to death then the taxman can still try to get 40% of it through legal action if they can reasonably show that it was given to avoid tax.

TL;DR - The inheritance tax rules in Britain suck.
 

Greenbean

Posting Machine
Nov 14, 2015
2,861
4,185
I can guarantee you that if you tell Jeff Bezos that his kids trillion dollar inheritance is going to be taken by the government he'll be burying money in fields like Pablo Escobar.
There will be exceptions and loopholes provided for the ultra rich. These are the people that finance campaigns. For this very reason. They're not shelling out millions in donations to have their wealth stripped from them.
 

BeardOfKnowledge

The Most Consistent Motherfucker You Know
Jul 22, 2015
60,547
56,268
There will be exceptions and loopholes provided for the ultra rich. These are the people that finance campaigns. For this very reason. They're not shelling out millions in donations to have their wealth stripped from them.
This conversation is based on the nonsense contained in the article.
 

ThatOneDude

Commander in @Chief, Dick Army
First 100
Jan 14, 2015
35,390
34,272
That's why we revolted.
Double taxation.

No taxation without representation!

Fuck your tea!
We still have taxation without representation in America. In Texas alone a city can impose it's laws past their city limits, even though the people they are enforcing the laws on have no say in who get's elected.
 

Filthy

Iowa Wrestling Champion
Jun 28, 2016
27,507
29,834
well, we abolished drugs.
and we abolished prostitution.


we should abolish wealth next.