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Growing income inequality is driving public mistrust

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Re: Growing income inequality is driving public mistrust

#31

Post by xboxnolifes »

pmichaud wrote: post #11
ericra wrote: post #7

Curious to not see inheritance/estate taxes listed among the possible solutions here, but I guess that a "wealth tax" could indirectly address this by whittling away at large fortunes over time while people are still alive. This may help avoid the issue of people using trusts to sidestep estate taxes (although I'm sure they would find a way!). More generally, I highly recommend any of Thomas Piketty's books for detai…

I'm not an expert here but my understanding is that most generational wealth is gone by the third generation anyway. Even if you outlawed inheritance entirely it seems like it wouldn't make a huge marginal difference?

Maybe the median family does, but where do you think the money they lose ends up? In the hands of the families who don't squander their wealth, further concentrating it into generational wealth.

Re: Growing income inequality is driving public mistrust

#32

Post by ericd »

throwaway13337 wrote: post #22
ericra wrote: post #7

Curious to not see inheritance/estate taxes listed among the possible solutions here, but I guess that a "wealth tax" could indirectly address this by whittling away at large fortunes over time while people are still alive. This may help avoid the issue of people using trusts to sidestep estate taxes (although I'm sure they would find a way!). More generally, I highly recommend any of Thomas Piketty's books for detai…

I agree. Inheritance is extremely unmeritocratic yet is somehow completely acceptable even among hardcore libertarians. Why? Most 'tax the rich' talk revolves around income. But real rich people don't make an income. They make capital gains or take loans against assets. It's a complete red herring. Gifts and inheritance should be the target of any fair-minded individual. As with any power passed down by familial conn…

There's currently a 40% estate tax rate for amounts above the generous exemption. Are you suggesting a 100% inheritance tax on death? With no exemption?

Re: Growing income inequality is driving public mistrust

#33

Post by ericd »

throwaway13337 wrote: post #29
xyzzy123 wrote: post #27

Earlier quoted context omitted.

> yet is somehow completely acceptable even among hardcore libertarians. Why? A common area of concern for libertarians is the balance of power between citizens and government. In this case, the power of the government to take your (or your family's) stuff after you die, despite you already having paid taxes on it. Through a libertarian lens the government "stepping in to make everything fair" can be viewed as unwarr…

A fair point. However, unless they are the kind of libertarian that believes in no tax, the government is still going to tax something. And in doing so will decide who is taxed and who isn't. Taxing fundamentally must answer the question of what is fair to tax. I believe the reason that income is taxed is mainly because it's much easier than wealth for governments to determine and is generally more liquid. I guess my…

>I guess my issue with inheritance is less economic and more moral. It just doesn't seem to fit with modern values yet is untouched as a debate topic.

Ensuring that your kids are well taken care of is a core biological imperative, let alone a "modern value".

Re: Growing income inequality is driving public mistrust

#34

Post by throwaway13337 »

xyzzy123 wrote: post #30
throwaway13337 wrote: post #29

Earlier quoted context omitted.

A fair point. However, unless they are the kind of libertarian that believes in no tax, the government is still going to tax something. And in doing so will decide who is taxed and who isn't. Taxing fundamentally must answer the question of what is fair to tax. I believe the reason that income is taxed is mainly because it's much easier than wealth for governments to determine and is generally more liquid. I guess my…

People want to make sure their loved ones are taken care of / will be financially secure, even after they die. This is a fairly core desire. Family businesses, family farms, family homes - if you hit people there you have to expect an emotional reaction. People who think "bigger than individuals" - their families, their communities, their churches, their businesses, how to build up productivity and abundance in those…

I appreciate your sincerity here.

It is indeed emotional! This multi-generational effort kind of view is key to many people. And to them, building wealth for their children is the most moral thing they can think of. You're right to point that out and you saying it reminds me of a friend who said something similar about the topic.

My critique on this side is that the receiver of the wealth seems often to not be happy with it. I'm sure that is not true up to a certain point but past that, the trope of the meaning crisis in some way seems to be accurate from those I've known. I think the giver does not follow the logic to the end that indeed the giving is a gift to themselves and not to their children. They are granting their own dream at the cost of their child's. This is where I think the moral failing is.

I certainly believe in contributing what you can to your community and that those whom have the wealth should indeed allocate it as they see fit. I guess my question is in the wisdom of some specific allocations.

The generational economic parasite is not happy to be so but is made into the unhappy abomination. It costs both them and society.

Re: Growing income inequality is driving public mistrust

#35

Post by throwaway13337 »

ericd wrote: post #32
throwaway13337 wrote: post #22

Earlier quoted context omitted.

I agree. Inheritance is extremely unmeritocratic yet is somehow completely acceptable even among hardcore libertarians. Why? Most 'tax the rich' talk revolves around income. But real rich people don't make an income. They make capital gains or take loans against assets. It's a complete red herring. Gifts and inheritance should be the target of any fair-minded individual. As with any power passed down by familial conn…

There's currently a 40% estate tax rate for amounts above the generous exemption. Are you suggesting a 100% inheritance tax on death? With no exemption?

The estate tax is extremely avoidable through trusts and gifts before death. I've not seen any stats but I doubt many pay that 40% in any significant number - it would just be poor planning.

I am suggesting a 100% inheritance tax. As impossible to enforce as it would be. Why should someone have wealth by accident of birth? Children of the wealthy already have advantage from the upbringing bought by the wealth.

I only make this argument as a point of philosophy. It's completely infeasible because the values of society are warped here. Inheritance is virtue. Maybe the overtone window could shift a bit, though?

Re: Growing income inequality is driving public mistrust

#36

Post by orwin »

wilshiredetroit wrote: post #23

Chamath Palihapitiya had some interesting comments about this topic that I think you guys might enjoy: Narrative violation for the "progressive" left: The American Dream is alive and well. 12% of American Families are now Millionaires "Perhaps most noteworthy, there really are a lot of true millionaires. About 16 million American families—just over 12%—have wealth exceeding $1 million, up from 9.8 million families in…

Not interested enough to check the veracity of those claims, but my grandfather somehow had 2/3rd or more of his wealth in non-public traded companies from different countries, and that part seems to be a pain to evaluate (it has been 5 years and my family is nowhere close, because at least 3 of them are wankers who want to avoid paying their fair share of taxes, and there seems to be contractual issues with disclosure). The wealth you see in Forbes or Fortune is only a part of the existing wealth.

Re: Growing income inequality is driving public mistrust

#37

Post by southernplaces7 »

throwaway13337 wrote: post #22
ericra wrote: post #7

Curious to not see inheritance/estate taxes listed among the possible solutions here, but I guess that a "wealth tax" could indirectly address this by whittling away at large fortunes over time while people are still alive. This may help avoid the issue of people using trusts to sidestep estate taxes (although I'm sure they would find a way!). More generally, I highly recommend any of Thomas Piketty's books for detai…

I agree. Inheritance is extremely unmeritocratic yet is somehow completely acceptable even among hardcore libertarians. Why? Most 'tax the rich' talk revolves around income. But real rich people don't make an income. They make capital gains or take loans against assets. It's a complete red herring. Gifts and inheritance should be the target of any fair-minded individual. As with any power passed down by familial conn…

>Inheritance is extremely unmeritocratic yet is somehow completely acceptable even among hardcore libertarians. Why?

I think you grossly misinterpret the philosophy of serious libertarians. It's not simply about meritocracy, it's much more about being free to control what's lawfully yours such as personal and business assets (including your body and voluntary economic agency). This of course includes having the right to decide who gets your money after you die.

>it leads to a less efficient use of resources. We have all of history to tell us it's a bad idea.

Do we really? Inheritance taxes are a minority of government revenues, and they fall well into being offset by the sheer waste of resources and money that most governments routinely practice. You consider them being handed down into often useful foundations worse than this?

>People who inherit their wealth have no such justification. Let wealth die with the person.

How about letting the people who created their wealth decide what's a fair use of it? They're in a practical sense more justified than anyone else in having that decision. You or some bureucrat are somehow more justified than the creator of a body of wealth in deciding what should happen with it? How so pray tell?

Re: Growing income inequality is driving public mistrust

#38

Post by happymellon »

southernplaces7 wrote: post #37
throwaway13337 wrote: post #22

Earlier quoted context omitted.

I agree. Inheritance is extremely unmeritocratic yet is somehow completely acceptable even among hardcore libertarians. Why? Most 'tax the rich' talk revolves around income. But real rich people don't make an income. They make capital gains or take loans against assets. It's a complete red herring. Gifts and inheritance should be the target of any fair-minded individual. As with any power passed down by familial conn…

>Inheritance is extremely unmeritocratic yet is somehow completely acceptable even among hardcore libertarians. Why? I think you grossly misinterpret the philosophy of serious libertarians. It's not simply about meritocracy, it's much more about being free to control what's lawfully yours such as personal and business assets (including your body and voluntary economic agency). This of course includes having the right…

> How about letting the people who created their wealth decide what's a fair use of it?

Because the whole point is that they are unlikely to have been the person who actually created that wealth, the majority of wealth is inherited or created because they inherited wealth in the first place to be able to create their revenue streams.

If I died and left my heirs $10001 that I had made from my business but I inherited $10000, to be able to set up my business did I actually create any meaningful wealth?

Should I be able to decide what happens on anything more than the $1?

Re: Growing income inequality is driving public mistrust

#39

Post by paul_n »

mortenjorck wrote: post #12

Just the first sentence is a bit of an eye-opener: > This year’s World Economic Forum at Davos is focused on the theme of “rebuilding trust”. That this would be the theme chosen for Davos in 2024 speaks volumes about the state of institutions post-2020.

What exactly is eye opening for you with that statement? I’m not connecting your dots..

Re: Growing income inequality is driving public mistrust

#40

Post by campl3r »

ericra wrote: post #7

Curious to not see inheritance/estate taxes listed among the possible solutions here, but I guess that a "wealth tax" could indirectly address this by whittling away at large fortunes over time while people are still alive. This may help avoid the issue of people using trusts to sidestep estate taxes (although I'm sure they would find a way!). More generally, I highly recommend any of Thomas Piketty's books for detai…

I disagree.

I'm in favor of a wealth tax, but a strong proponent of any inheritance tax (and income).

A wealth tax is more fair. Avoiding it is way harder than for inheritance taxes and it's a constant spend for any estate (avoiding issues around a one time big taxable event, easing planning).

If we as society want(need!) to redistribute wealth we should not wait for people to die!

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