On Rights of Inheritance - why high inheritance taxes are justified

https://link.springer.com/article/10.1007/s10892-019-09283-5

created by as-well on 22/01/2020 at 09:28 UTC

52 upvotes, 12 top-level comments (showing 12)

Comments

Comment by Shield_Lyger at 22/01/2020 at 15:35 UTC

21 upvotes, 1 direct replies

That ought to remind us that a confiscatory inheritance tax is not a cure-all. It is not enough to eliminate systemic inequality.

This* is the point that I think bears more scrutiny. Because if eliminating systemic inequality is the goal, then waiting for people to die to confiscate the advantages they've accrued seems pointless. The fundamental driver of systemic inequality is human choice.

If the understanding is that eliminating "undeserved benefits trickling down the generations" results in each and every young adult embarking on life with access to an identical set of opportunities, with no chance of outside assistance, that's a much bigger task than any inheritance tax can tackle. Why allow people to accumulate transferable advantages in the first place, if the point is that transferring them is unfair to the point of immorality?

For me, the problem with things like this is that they're posited in a vacuum. What is the *end* that is being worked towards, and what would that be expected to look like? In this case, what does a "fair" society lacking in "undeserved benefits" to individuals look like in practice? From there, one can decide which means make sense to attain it. I suspect that defining transferable advantages as being freely disposable property is incompatible with the end state desired, and the community confiscating what someone fails to dispose of in life is something of a compromise position; albeit one that I suspect that people would ultimately find unsatisfying.

Comment by bluePizelStudio at 22/01/2020 at 12:14 UTC

73 upvotes, 6 direct replies

While there certainly are some reasonable arguments that can be made on this subject, this is a terrible one.

At it’s base, it argues that the inheritor doesn’t or should’ve have any special rights to wealth because of birthright. It then completely ignores the reciprocal question - why does the community?

To do a mandatory inheritance tax simply switches the “birthright privilege” to the community instead of the individual. Regardless, someone is going to benefit, through absolutely no doing of their own, due to the hard work an individual put in over the course of their lifetime.

Furthermore, if the individual is not entitled to inherit wealth, why would the “community” be? What community? The local neighbourhood? The city? State? Country? Unless you can defend an argument of tangible boundaries on where this wealth should be spread too, it’s a completely moot point.

The wealth should, if not belong to the individual, really just belong to the entire world, seeing as nobody has a special privilege to inherit wealth.

Furthermore, there’s no practicality at all in the appeals to logic used here. In the real world, there are some very concrete values that can be widely accepted. Top amongst them would be things like “don’t murder”, and having a right to try and make opportunities for your children.

It’s literally what every decent mother and father spend their entire LIVES doing. Immigrants who come here and work shit jobs just in the hope that their kids can go to school, in the hope that their grandkids might be born into better circumstance.

People forget that you don’t actually have a birthright to limitless opportunity. You find yourself in a shitty situation? Well that sucks. What you can do is work your ass off your entire life, have kids, and do your absolute best to try and give them at least a little more opportunity. Young western generations have completely forgot that it’s not all just about you the individual, and that you’re not just entitled to make $100k+ per year because you were born. That sort of opportunity often does take generations to earn.

Comment by [deleted] at 22/01/2020 at 17:22 UTC

8 upvotes, 2 direct replies

And what is my inheritance is a small business like a restaurant? What if I have worked there my whole life to build the business, but it was owned by my parents?

Now what if the same scenario, but before my parents does, they gave me ownership of the business as part of my compensation? Like I earned 5% of the business every year, so 20 years in, I own 100%?

My parents transferred ownership to me in both situations, and I performed the same job in both, it was just a matter of how I obtained ownership of the business.

Comment by as-well at 22/01/2020 at 09:29 UTC*

6 upvotes, 0 direct replies

This is a contemporary article laying out the various interests and rights when it comes to inheritance. The interesting things happen in chapters *Comparing Interests* and *Would a Confiscatory Inheritance Tax be Unjust?*

From the last chapter:

I conclude, then, that even if we think that there are moral reasons to institute a legal system that protects rights to bequeath and to inherit, there are also reasons, both moral and practical, not to. Whatever interest is served by inheritance is an interest that non-inheritors also have, and if they generate a right in the putative inheritor, they would presumably generate a comparable right in everyone else that must, at the very least, be taken seriously. And the claim of the non-inheritor is bolstered by an appeal to the moral value of equality, to the non-necessity (and sometimes utter incapability) of inheritance to do what morality would seem most likely to require of it, and to the fact that to make a fuss about inheriting things betrays a very strange view of human relationships from the off.

The paper is open access. You may read it for free in HTML or download the PDF.

Comment by BernardJOrtcutt at 22/01/2020 at 14:04 UTC

1 upvotes, 0 direct replies

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Comment by [deleted] at 22/01/2020 at 11:00 UTC

5 upvotes, 1 direct replies

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Comment by [deleted] at 22/01/2020 at 14:10 UTC

2 upvotes, 1 direct replies

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Comment by Jarhyn at 22/01/2020 at 14:34 UTC

1 upvotes, 1 direct replies

So, let it be known, I agree with the article and the OP: any justification a *naive child* may have for being given inheritance, on the basis of his desert, is shared by the non-inheritor; one ought not be given a resource they have not earned except in the consideration that all *equally* have the right to that which is not earned. This, to me, quite suitably justifies my position that the OP is on the mark. Any other quibbling I could do over that would devolve to a discussion on the rightfulness of actually justifying equality (through basic discussions of symmetry of justification and the role rejection of contradiction plays in the understanding of knowledge).

That aside, however, there *is* an argument that may be made to counter this: that extraordinary feats of accomplishment, "megaprojects" if you will, require vast concentrations of wealth. Megaprojects take many shapes, from giant vanity statues and other such "wonders" of the world, to the research of nuclear energy or probes that defeat our natural ignorances such as the Large Hadron Collider, to innovations such as SpaceX and Tesla, all enabled by the pooling of wealth.

Now, you could ask, "why would inheritance be necessary to accomplish great things in concert?" Extrapersonal groups exist all the time which are not directly the ward of a single person, and certainly some pools of wealth have managed to be accrued in single lifetimes.

But if we are being honest, those who have great wealth are the donors which make such projects viable in the first place, and those who have had great wealth still mostly started from a "forward" position. The "force" to accomplish large vectors of change require a high potential, and static redistribution will ground out that ability to make swift change.

But this is merely the justification for pooled wealth. It says nothing, by itself, to justify inheritance in our current system.

Instead, that justification comes down to a prerequisite for the pooling of wealth: **financial literacy**.

My own grandfather had a saying that I have felt in my own life, often sharply: that was "learning money". Simply put, to attain financial literacy requires exposure to financial opportunity... To achieve financial literacy one must have enough money already that the initial losses, while painful, can educate the holder and still allow further opportunities to get it right. Or in other words, you will always be bad at something before you are good at it.

Further, there is the issue of informational legacy: rich *parents* have already made or at the very least been warned of the mistakes that a new learner may make, and can in many cases direct those they have educational control over (ie, their children) away from those mistakes; they can get the learning without spending the money.

This forms the ultimate crux of the problem: doing great things requires money, making money requires having money, having money requires financial literacy, and financial literacy requires either *wasting lots of money/resources* or *access to an educator of financial literacy*.

Now, I'm open to discussing how these problems of financial literacy may be solved *without* resorting to the natural evil of unequal birth opportunity. I don't think the problem exists without solutions, but I don't think either that we can, without such solutions in hand, resort to irresponsibly eating the rich and destroying our access to megaprojects.

Comment by ABobby077 at 22/01/2020 at 17:12 UTC

1 upvotes, 3 direct replies

Reading comments so far on this, it sounds like an all or nothing view on Inheritance Taxes. I don't see anyone saying take entire estates as the level of taxes. I'm not sure why a fair rate of Inheritance Taxes (10 to 20% or so) on estates over $5 million is an unfair or terrible injustice. I think the rate may need adjustment, but I don't understand how any taxes such as this are unfair. I really don't understand how this isn't income and taxed as such, anyway at the appropriate rate for the income received.