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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

#151

Post by sam_lowry_ »

vorpalhex wrote: post #130
JAlexoid wrote: post #100

Earlier quoted context omitted.

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.

A big government with military bases around the world could extend its tax base even to that tiny government.

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

#152

Post by ryandrake »

JAlexoid wrote: post #42
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's a reason why countries, like Sweden, have scrapped the inheritance tax - it doesn't work like that anymore. The benefits of wealth are exercised long before the inheritance can be applied. Your first home down payment, your education, your wealth generation while being on support by your parents, etc. - will push you off the ground faster, than any inheritance in a world where people easily live to 80-90. Mos…

By the time the treasure hoard gets passed on to the next generation, the inequality "damage" has already been done. If an inheritance tax has to be applied, this means society has already failed to stop runaway wealth accumulation and inequality.

I'd much rather we have checks in place to stop individuals from accumulating megawealth in the first place (or at least slow it down), rather than relying on an inheritance tax which takes effect long after the accumulation happened.

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

#153

Post by antisthenes »

b3lvedere wrote: post #66
esarbe wrote: post #41

Earlier quoted context omitted.

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.

Interestingly enough, when detractors like to point out countries where communism "failed", it's always countries that did not have a rich history of colonialism and exploitation of cheap labor forces around the world.

Just a thought.

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

#154

Post by vorpalhex »

sam_lowry_ wrote: post #151
vorpalhex wrote: post #130

Earlier quoted context omitted.

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.

A big government with military bases around the world could extend its tax base even to that tiny government.

Bombing people for more tax revenue seems like the wrong thing.

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

#155

Post by TFYS »

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…

Average standard of living can rise even if it decreases for 99.9% of people. Median standard of living is what you want to increase, and increasing wealth inequality does not help with that.

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

#157

Post by jmyeet »

kamaal wrote: post #135
jmyeet wrote: post #95

Earlier quoted context omitted.

Houses shouldn't be investments. Wages aren't 10x in that same period. All the increasing house price has done is transfer wealth from the younger generation to the older generation.

>>Houses shouldn't be investments. People keep saying things without understanding what that means. Only reason why anyone even wants a home is because its profitable to them on the longer run. Else renting works. Either way the demand for home ownership will be way less if you simply tell people they will make big losses on that purchase. That said, now imagine how housing works in a world where no one wants to buy…

So this just glosses over several issues and ignores the big obvious solution.

The big obvious solution is a system like Vienna where ~60% of the housing is supplied by the government.

Oh and if no one wants to buy houses, great. Let the government take them over and then create rental stock, something the UK did until Thatcher came along [1].

You can also differentiate between personal home ownership and so-called "investment properties". That is, you punitively tax hoarding of housing as well as short-term speculation in hoousing. As one example, Switzerland (depending on canton) has pretty high capital gains taxes on housing that tend to decrease the longer you own the house [2].

We have a ton of shortsighted and downright destructive policy to increase house values (eg Prop 13 in California) that are often sold emotively. Prop 13 was sold as not kicking seniors out of their homes so we got a tax policy that essentially froze Disneyland's property tax to 1960s levels.

NYC builds a ton of real estate for no other purpose than allowing non-domiciled billionaires to park their wealth. I, for one, think that owning property in NYC (or anywhere) should make you resident for tax purposes. And the property tax system should be fixed but it's held hostage by upstate homeowners who like their subsidized tax rates on single family homes too much to let anything change.

Relying on private entities to provide houses by being landlords is an absolutely awful system.

[1]: https://www.theguardian.com/lifeandstyle/2024/mar/19/end-of-...

[2]: https://www.ubs.com/ch/en/services/guide/mortgages-and-finan...

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

#158

Post by senordevnyc »

ryandrake wrote: post #149
ckemere wrote: post #142

Looking at the discussion I’m struck by how there are really two “goods” that are conflicting in people’s minds. Many of those of us who are parents embrace the idea of sacrificing to make our kids lives easier and better than our own. We recognize how what our parents have provided us has helped us and want to give even more to our own children/grandchildren. It seems to be a general principle of society that we sho…

Society and policy makers seem to have a lot of trouble understanding scale and orders of magnitude. We declare some broad principle, like "It's good to make our kids lives easier and better than our own." and we apply it regardless of whether the dollar value is $10K, $10M, or $10B. But someone passing down $10B to their children is totally different than someone passing down $10K, and needs to be handled differentl…

It would be awesome if we taxed someone making $6B the same as someone making $600k, but we don't even do that. When I was making $600k, I was paying close to 50%. No one making $6B is paying anywhere near $3B in taxes on that income.

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

#159

Post by sleight42 »

bawolff wrote: post #44

Why would this increase inequality? Inheritence generally goes from rich person to rich person. I would normally assume the rate of equality would stay roughly constant in the face of inheritence.

Imagine wealth as a virus.

If inheritance isn't there to prune out variants, the virus mutates and propagates.

People who start off wealthy go on to accumulate and centralize even more wealth.

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

#160

Post by sam_lowry_ »

blitzar wrote: post #132
vorpalhex wrote: post #128

Earlier quoted context omitted.

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

We can tax stock grants at 100%

You can also tax stocks yearly at a fixed rate, e.g. 2%.
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