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Over $70T of inherited wealth over next decade will widen inequality, economists

theguardian.com

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Re: Over $70T of inherited wealth over next decade will widen inequality, economists

#61

Post by andrepd »

u_sama wrote: post #25
andrepd wrote: post #4

The work of Piketty [0] and others shows that wealth inequality has surpassed pre-WWI historical maximums. The postwar "golden age of capitalism" has given way, from the 70s until today, to a neoliberal system that simply doesn't serve most people on the planet. It's an unfortunate fact that significant change happens rarely without large convulsions, e.g. after a major war, because I don't see this being sustainable…

I would not cite Piketty, Zucman or Saez who are the hardest fighters of the wealth inequality thesis as they usually mix political advocacy and have been criticized in their methodology and have been under a fair share of controversies. Btw I have grouped them because this is how they are usually treated, both by the fact they are all French economists but also on the fact they all push for the same inequality thesi…

Economics is political, so it should come as no surprise that economists have political opinions about what should be done at the level of the economy. Or is only that which is vaguely left-wing that is "political" or "ideological", and mainstream neoliberal politics and economics are simply "objective" and "technocratic"?

I think it's important to separate the empirical and analytic part, to which you can apply objective criticisms, to the political part, with which you can agree or not but which should have no bearing on the former part.

Anyway if you want to be honest you can also link to Piketty's rebuttal to the criticism, e.g. http://piketty.pse.ens.fr/files/capital21c/en/Piketty2014Tec...

Re: Over $70T of inherited wealth over next decade will widen inequality, economists

#62

Post by awakeasleep »

shoubidouwah wrote: post #16

1) set a generous threshold over which your inheritance gets taxed, inflation adjusted (e.g, 2M not including the principal residence) 2) tax 100% above it. (should only concern a fraction of a fraction of cases) 3) put all this tax's proceeds in a sovereign wealth fund 4) at 21, a citizen gets access to her redistributed generational wealth 5) profit

There are many solutions, many ways to limit the magnitude of differences of wealth.

But America is so thoroughly owned by the wealthy that implementing one of these solutions is not desirable. The legislature in America only works on behalf of the ultra wealthy and any legislation that passes will be to increase the magnitude of the wealth gap.

Re: Over $70T of inherited wealth over next decade will widen inequality, economists

#63

Post by phplovesong »

boxed wrote: post #50
phplovesong wrote: post #7

This is just wrong. If we skip the ultra rich totally and focus on normal families inheritance is THE way to help you decendants. Right now (where i live) you pay a big tax on inheritance, this is ok if you only inherit cash. In 99% of inheritances this is not the case. You inherit family home, a cottage etc. Then you must sell because you cant afford to pay for it. Now the asset is gone forever and the next generati…

You are confusing "if only I get a high inheritance tax" with "if everyone gets a very high inheritance tax". The inheritance tax has to go somewhere. It could go into science and infrastructure and then everyone gets richer. Or it could be paid out as a dividend, then everyone below the average gets richer. There are many options here. Just saying "inheritance tax bad" without talking about the output side of such a…

Boy can i tell you, it does not go to "science". It goes 99% to paying for social security.

Re: Over $70T of inherited wealth over next decade will widen inequality, economists

#64

Post by JAlexoid »

andrepd wrote: post #22
u_sama wrote: post #8

Earlier quoted context omitted.

Counter-example: All the European, and world countries who have implemented the various inheritance, wealth taxes and heavy redistribution yet the inequality is still widening. Take France, Norway or Sweden as the ideal social democracies. Argentina (the end game of social democracy) pre-Milei had a huge array of taxes and regulations which lead to the state misusing that money to actually enrich a small elite of pol…

Unlike people, capital has no nation. It can just move effortlessly from France to Switzerland to the Cayman Islands. That's why single-country initiatives to e.g. tax wealth (or even tax extremely profitable companies) are doomed to failure: those assets are easy to transfer and hide; if the UK passes a progressive wealth tax, all those global billionaires will just sell their empty houses in London and buy empty ho…

Selling empty homes in London will increase supply of housing in London and lowering the price of housing, allowing less than wealthy people to accumulate wealth.

The problem with countries like UK is that real estate is the only way of obtaining, growing and keeping wealth there. And I mean the only.

Re: Over $70T of inherited wealth over next decade will widen inequality, economists

#65

Post by blitzar »

tock wrote: post #35
shoubidouwah wrote: post #16

1) set a generous threshold over which your inheritance gets taxed, inflation adjusted (e.g, 2M not including the principal residence) 2) tax 100% above it. (should only concern a fraction of a fraction of cases) 3) put all this tax's proceeds in a sovereign wealth fund 4) at 21, a citizen gets access to her redistributed generational wealth 5) profit

Why make it on inheritance then? Tax wealth 100% above 2M. I do think this would doom progress but would be a fun exercise.

Wouldnt it be easier just to tax all income above say $200,000 (minimum wage in SV) at 100%.

If a net worth of $2 mil is considered outrageous then surely that kind of salary would be considered equally so.

Re: Over $70T of inherited wealth over next decade will widen inequality, economists

#66

Post by b3lvedere »

esarbe wrote: post #41
cynicalsecurity wrote: post #5

Earlier quoted context omitted.

Capitalism creates inequality, but in a socialism/communism economy there would be either no money or no goods. Everyone would be equally poor, not just some.

Social democracy is Socialism[1]. European social democracies are among the top of the wealthiest countries in the world. [1] https://en.wikipedia.org/wiki/Social_democracy

European countries did not get wealthy just because of their social democracy system. There is a lot of very painful history as well.

Re: Over $70T of inherited wealth over next decade will widen inequality, economists

#67

Post by faustlast »

veqz wrote: post #20
phplovesong wrote: post #7

This is just wrong. If we skip the ultra rich totally and focus on normal families inheritance is THE way to help you decendants. Right now (where i live) you pay a big tax on inheritance, this is ok if you only inherit cash. In 99% of inheritances this is not the case. You inherit family home, a cottage etc. Then you must sell because you cant afford to pay for it. Now the asset is gone forever and the next generati…

Inheritance tax is usually only on values above a certain point, though. That point can easily be set reasonable high – say, 5% tax on all inheritance above €2M, and 40% on all inheritance above €10M, and normal families would hardly be affected.

In theory, it is nice; however, valuing assets is not easy, especially for the whole population. This arbitrariness clashes with the principle of equal rights in most constitutions. On the other hand, taxing income is very easy since the number has a precise origin.

Re: Over $70T of inherited wealth over next decade will widen inequality, economists

#68

Post by JAlexoid »

blargthorwars wrote: post #32
Drakim wrote: post #9

Earlier quoted context omitted.

Why would there be no money under socialism?

No money is a bit of hyperbole, but fundamentally, nobody really wants to work hard for the exclusive benefit of everybody else. Greed is an innate human trait.

Socialism is not communism and isn't anarchism.

Those are not the same, but too many don't know what's the differrence.

Re: Over $70T of inherited wealth over next decade will widen inequality, economists

#69

Post by andrepd »

u_sama wrote: post #37
andrepd wrote: post #22

Earlier quoted context omitted.

Unlike people, capital has no nation. It can just move effortlessly from France to Switzerland to the Cayman Islands. That's why single-country initiatives to e.g. tax wealth (or even tax extremely profitable companies) are doomed to failure: those assets are easy to transfer and hide; if the UK passes a progressive wealth tax, all those global billionaires will just sell their empty houses in London and buy empty ho…

This is basically a prisoner dilemma on a global scale where the incentives are for single marginalised nations to leverage the fact of being tax havens to survive globalisation. The dream of a single global tax is as possible as making China/US respect any of the agreements they have signed regarding trade and environment. The same proposal is also criticized by many economists too, who argue that inequality has not…

Re real estate: indeed an LVT would go a long way to ameliorate the unsustainable situation regarding housing across Europe. It's a simple and efficient solution, and can be applied at the country level.

But I would argue that the situation in housing is actually a consequence, and not a separate phenomenon, of the broader issue of inequality-driven asset price inflation.

Re: Over $70T of inherited wealth over next decade will widen inequality, economists

#70

Post by jghn »

awakeasleep wrote: post #62
shoubidouwah wrote: post #16

1) set a generous threshold over which your inheritance gets taxed, inflation adjusted (e.g, 2M not including the principal residence) 2) tax 100% above it. (should only concern a fraction of a fraction of cases) 3) put all this tax's proceeds in a sovereign wealth fund 4) at 21, a citizen gets access to her redistributed generational wealth 5) profit

There are many solutions, many ways to limit the magnitude of differences of wealth. But America is so thoroughly owned by the wealthy that implementing one of these solutions is not desirable. The legislature in America only works on behalf of the ultra wealthy and any legislation that passes will be to increase the magnitude of the wealth gap.

Also there's the aspect of how many Americans view themselves as temporarily inconvenienced millionaires. The average person doesn't want rules like this because they're sure it'll apply to them someday.
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