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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

#21

Post by 317070 »

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…

A common proposal I'm fond of, is that you get a budget (of say 1 million) you are allowed to inherit tax free across the span of your life.

This incentivises the rich to split up their fortune, and allows the poor to keep control of objects with emotional luggage.

That said, if the value of your house has grown tenfold, it is most likely because the community added that value. And so I don't think it is necessarily wrong if that same community sees some of that value back.

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

#22

Post by andrepd »

u_sama wrote: post #8
farseer wrote: post #2

That is the way of the world, capitalism specifically. The only way to counter is a fair tax system and good spending on education up to college level.

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 houses somewhere else.

Hence the proposal by many economists that the only solution is a broad agreement on a global progressive wealth tax, with at least the major blocs of the US and EU on board. See e.g. "A Brief History of Inequality".

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

#23

Post by matlock »

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…

In every jurisdiction I know of if you inherit and live in it as your main residence you don’t need to pay. If you just inherit to rent it out and make money why shouldn’t you pay something for that like it were cash.

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

#24

Post by arealaccount »

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…

The majority of people don’t inherit anything, so you are still luckier than most!

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

#25

Post by u_sama »

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 thesis

1: https://www.davidsplinter.com/AutenSplinter-2024-ReplyToPSZ....

2: https://philmagness.com/2014/12/an-empirical-critique-of-tho...

3: https://qz.com/1725562/elizabeth-warrens-economic-advisers-a...

EDIT: Here is the rebuttal for 2 by Piketty himself: http://piketty.pse.ens.fr/files/capital21c/en/Piketty2014Tec... courtesy of andrepd

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

#26

Post by kachapopopow »

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

I think the bigger issue is that people are hording wealth instead of spending it in general making money work for them and not for the greater economy which is the only thing giving their money substance long-term. Well, long-term is longer than human lifetime so I guess there's no real reason for them to worry about it either.

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

#27

Post by blitzar »

__s wrote: post #15
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…

May want to say where you live, in US estate tax is exempt under 13M

Not sure about parent comment but UK - everything over £325,000 (USD ~450,000) is taxed at 40%.

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

#28

Post by blitzar »

matlock wrote: post #23
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…

In every jurisdiction I know of if you inherit and live in it as your main residence you don’t need to pay. If you just inherit to rent it out and make money why shouldn’t you pay something for that like it were cash.

UK. You have to pay your 40% within 6 months of death, even a main residence.

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

#29

Post by onion2k »

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

6) wonder why this has no real impact as it only recovers wealth from people who are over $2m in wealth but below set-up-a-trust-to-move-your-families-money-to wealth, which is a fraction of the wealth. 7) See trust-as-a-service businesses boom until there's no additional revenue.

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

#30

Post by happytoexplain »

arealaccount wrote: post #24
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…

The majority of people don’t inherit anything, so you are still luckier than most!

Crabs in a pot.
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