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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

#121

Post by u_sama »

andrepd wrote: post #69
u_sama wrote: post #37

Earlier quoted context omitted.

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.

Fuly agree, LVT seems to be a good incentive. As well as de-regulating, easing or digitilazing all the bureaucratic processus related to building so that the time between wanting to build and actually built nears 0. Also introduce anti-democratic laws that push the will of the group over the individual house owners who are motivated to block new contructions to see their number go up.

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

#122

Post by 317070 »

einszwei wrote: post #119
317070 wrote: post #33

Earlier quoted context omitted.

That sounds like a lottery for housing, with extra steps? Hypothetical scenario: we have 100 houses, and 200 young families looking for one. Your solution in effect is: let's give 100 houses to the 100 young people with an inheritance. That sounds arbitrary. Lack of housing is a disconnected problem from inheritance taxes.

Your analogy is plain wrong. To start with people with inheritances can and do own multiple homes.

I'm sorry, I genuinly don't understand your point. Could you expand a bit?

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

#123

Post by bryanlarsen »

philipallstar wrote: post #103

Wealth inequality is not an intrinsic bad, and it's not even worth striving to reduce. The only thing that matters is the average (pick your average) standard of living. There's no point paying a fortune to have all the people who created the most value leave your country just so you can reduce a pointless metric, especially when all it does is get the state more money to spend on itself rather than reduce your costs…

That feels like it should be true, but it's not. Humans are hierarchical social animals, not logical loners. Their well being and happiness is tied to the group.

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

#124

Post by einszwei »

317070 wrote: post #122
einszwei wrote: post #119

Earlier quoted context omitted.

Your analogy is plain wrong. To start with people with inheritances can and do own multiple homes.

I'm sorry, I genuinly don't understand your point. Could you expand a bit?

> Hypothetical scenario: we have 100 houses, and 200 young families looking for one. Your solution in effect is: let's give 100 houses to the 100 young people with an inheritance

This assumes that each family only gets a single house. With enough wealth you can buy out all the houses (not considering other factors)

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

#125

Post by JAlexoid »

mft_ wrote: post #71
christkv wrote: post #6

Inheritance is in most cases the only way young people in a lot of European countries can even own their own home

That observation is correct, but I'd challenge the implication that "therefore inheritance must be allowed to continue in its current form". Why are houses so expensive? Alongside challenges and inefficiences related to permits and building (as plenty discussed elsewhere) housing is also used as an investment asset by people with money to invest. This ranges from individuals buying an apartment to rent out, to large…

> Until this mechanism is recognised as the cause of asset appreciation

What do you mean "until"? It's the core of many of European "dreams".

Take UK for example, where there's a concept called "property ladder". This property ladder is the promise of ever increasing property values, to build wealth(it's a pyramid scheme). This "always appreciating" promise is not just subtextual, it's literally the core of the method for becoming wealthy.

Whole economies in Europe are built around this constant real estate appreciation and first-home-buyers' support.

This is becoming the case in US as well, to lesser extent. US has a much more dynamic property market, than the wealthy Europe.

Politicians will bend over backwards to protect this "dream"... and at this point it is screwing over the new generation.

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

#126

Post by ModernMech »

philipallstar wrote: post #103

Wealth inequality is not an intrinsic bad, and it's not even worth striving to reduce. The only thing that matters is the average (pick your average) standard of living. There's no point paying a fortune to have all the people who created the most value leave your country just so you can reduce a pointless metric, especially when all it does is get the state more money to spend on itself rather than reduce your costs…

> the people who created the most value leave your country

You mean the workers? Why would they leave if inequality is reduced, that would mean their standard of living would increase?

Anyone who wants to leave is free to, people are tired of the threats, just do it already. The people who leave will be spiting their own faces, and the people who stay behind will fill the demand vacuum.

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

#127

Post by vorpalhex »

einszwei wrote: post #114
philipallstar wrote: post #103

Wealth inequality is not an intrinsic bad, and it's not even worth striving to reduce. The only thing that matters is the average (pick your average) standard of living. There's no point paying a fortune to have all the people who created the most value leave your country just so you can reduce a pointless metric, especially when all it does is get the state more money to spend on itself rather than reduce your costs…

Where do you think the money that is accrued by the most wealthy will be spent/invested/parked? What will its effects be on the broader economy? Assuming that the money is all used for altruistic purpose, I could agree with your point. But we know that this money is often used for not so altruistic purposes like investing in PE which asset strip the productive parts of economy or use the money to influence politics a…

Or building companies that employ tens or hundreds of thousands.

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

#128

Post by vorpalhex »

evandijk70 wrote: post #81
blitzar wrote: post #65

Earlier quoted context omitted.

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.

Most net worths over $2 mil are created by growth in share value, not by income/salary.

Most income for high earning tech workers is in stocks and share value.

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

#129

Post by Balgair »

Aside: Inheritance laws are one of those little thought of things that end up making huge differences in a society.

The classic one is the changes in Sparta’s inheritance system that essentially caused their downfall.

Originally every citizen had an equal plot of land, the economic base that allowed him to be a hoplite (Sparta help ~80% of their population as slaves, helots, as state property). But as Spartan men died in wars, inheritance laws were forced to let daughters inherit and merge estates through marriage, wealth, and land, and thus it all concentrated fast. By Aristotle’s time, nearly half the land was owned by women outright, and the number of citizens had then fallen to a few hundred as citizenship was tied to these land plots. The result was that the city that once fielded the most formidable army in Greece simply ran out of Spartiates to fill the ranks. Perversely, they all kept this going instead of breaking up the consolidated plots, as citizenship was tied to freedom and voting power. So, the less of them there were the better off the rich were, as they had more voting power and wealth at home (wealth was land, as Sparta forbid money in it's borders, well, sorta). So, power domestically was inverse to foreign power. And we all know when countries get into these situations they always go towards domestic power over national security.

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

#130

Post by vorpalhex »

JAlexoid wrote: post #100
blitzar wrote: post #65

Earlier quoted context omitted.

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.

We have to reframe how taxes are viewed, by the wealthy. There should be no wealth tax, but above a certain threshold - there should be a maintenance fee associated with the wealth. I get charged maintenance fee by my mutual funds, for example. One of the purposes of the government is to protect and secure property... and that is what ultra wealthy are getting for a fraction of what they should be paying.

So the wealthy will do what you and I do: shop for the best rate.

That rate will not be where you and I live. It will be some tiny foreign government.

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