
Ask HN: What if there is no inheritance? - onmyway133
What if there is no inheritance, so that everybody has the same start, does that make life fairer?
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myinitialsaretk
I really like Warren Buffet's description of the ovarian lottery, below. I
think about this question a lot now that I'm a (relatively wealthy) parent
with two small children. If I have the opportunity, is it acceptable for me to
provide them with a privileged life. Maybe so, if I can also teach them to be
grateful for what they have received and understand that it's their job (as
well as mine) to make a more fair world.

Warren Buffet: "My political views were formed by this process. Just imagine
that it is 24 hours before you are born. A genie comes and says to you in the
womb, “You look like an extraordinarily responsible, intelligent, potential
human being. [You're] going to emerge in 24 hours and it is an enormous
responsibility I am going to assign to you — determination of the political,
economic and social system into which you are going to emerge. You set the
rules, any political system, democracy, parliamentary, anything you wish — you
can set the economic structure, communistic, capitalistic, set anything in
motion and I guarantee you that when you emerge this world will exist for you,
your children and grandchildren.

What’s the catch? One catch — just before you emerge you have to go through a
huge bucket with 7 billion slips, one for each human. Dip your hand in and
that is what you get — you could be born intelligent or not intelligent, born
healthy or disabled, born black or white, born in the US or in Bangladesh,
etc. You have no idea which slip you will get. Not knowing which slip you are
going to get, how would you design the world? Do you want men to push around
females? It’s a 50/50 chance you get female. If you think about the political
world, you want a system that gets what people want. You want more and more
output because you’ll have more wealth to share around."

~~~
dri_ft
It's John Rawls' Veil of Ignorance!

~~~
djmobley
My thoughts exactly.

For anyone not aware:
[https://en.m.wikipedia.org/wiki/Veil_of_ignorance](https://en.m.wikipedia.org/wiki/Veil_of_ignorance)

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bko
Milton Friedman on a 100% inheritance tax:

[https://youtu.be/MRpEV2tmYz4](https://youtu.be/MRpEV2tmYz4)

The argument is basically that it would encourage very wasteful behavior. If
you think about it, people often work to make the lives of their children
better off to a large extent. My grandfather who lives in a poor country
living on a pension still sends me $100 he saved up periodically despite the
fact that I'm wealthier than him by many factors.

Without the ability to pass on wealth to future generations, empires would not
be built in some cases, end of life would include many wasteful lavish
purchases and the black market for wealth transfer services would balloon

~~~
EliRivers
What is a "wasteful purchase" in this case? If the idea is to keep the money
moving and to not give people huge amounts of free money by accident of birth,
is not any purchase that isn't effectively taking huge amounts of raw
materials and destroying them (as opposed to making something useful out of
them) a good thing?

~~~
bko
I would argue a wasteful purchase is fast cars and boats. By buying these IMO
frivolous goods, you're diverting resources from investments that would serve
society to those that benefit the very few (luxury auto makers). If instead
you invested in stocks and bonds that fund companies that generate value and
passing on the future proceeds to that investment to future generations, this
would be arguably a better use of resources

~~~
EliRivers
Unless you buy at the IPO, which is a minority of share purchases by a very
long way, you're not funding companies. Buying a company's goods, such as cars
or boats, however...

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dongslol
People would still differ genetically. Right now we skirt that issue by saying
that we can't control genetics, but we can control how society treats its
people. But presumably someday we will have the power to control genetics, and
we'll repeat the same debate all over again.

So long as there is inequality of outcome, there are probably always going to
be people who assume unfairness---not just in people who lack a sense of
agency and self-responsibility, but because I think humans generally have an
instinctive dislike of inequality of any kind. This will continue until the
end of time: if you believe in fate (whatever that means), some people are
always going to have better fates than others (unless you want to give
everyone the same life), and people will keep getting mad.

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bagacrap
I'm 30 and I luckily still haven't collected inheritance. If and when I do, it
will come too late in life to make much difference. The head start I was given
was down to the way I was raised by my parents, including the things they paid
for. So unless you're suggesting making it illegal to buy your children
clothes, food, education, etc, (an extreme form of communism?) I'm not sure
inheritance has much bearing on social inequality. Only the very wealthy have
so much inheritance that it impacts the way they conduct their life from
birth.

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progval
Even without inheritance, not everybody would have the same start, because of
how they are raised. For instance, rich parents can afford more expensive toys
and tutoring.

To make education more equal, you would have to separate children from parents
and give them all the same quality of education. But radical changes to
society would be required to do that.

~~~
brbsix
It goes both ways. Children of the well-off can end up feeling abandoned in
daycares and boarding schools. Compared to other children who are generally
raised by their parents (or close family members) with whom they develop a
strong bond, it's not entirely clear to me who has it better.

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rajacombinator
Then you'll just see more aggressive versions of the tactics the rich already
use, like setting up charities that employ their children, etc. And the middle
class will get screwed again.

~~~
corecoder
That's interesting: why the middle class? What about classes below the middle?

~~~
compsciphd
because the poor aren't giving their descendants monetary inheritances. The
middle class can give their descendants some form of monetary inheritances,
but wont be able to afford to use the complicated schemes that the rich do.
Hence, the middle class gets screwed.

~~~
mikeyouse
The middle class can already bequeath to their children tax free. Only the
extremely wealthy face restriction and it's very easy to avoid (via capital
gains step ups, lifetime gifts etc). With a little planning, you can give $5.5
million tax free.

~~~
faet
5.5m per parent.

~~~
compsciphd
depends on the state

[https://taxfoundation.org/does-your-state-have-estate-or-
inh...](https://taxfoundation.org/does-your-state-have-estate-or-inheritance-
tax/)

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LyndsySimon
Absolutely not.

Working to enrich the lives of our children is a fundamental drive. You can't
eliminate that with a law.

~~~
EliRivers
But we could insist that people do it while they're alive.

~~~
loco5niner
... because everyone knows when they are going to die.

But seriously, you want to end up with a bunch of spoiled brats?

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Eridrus
What we traditionally think of inheritance is only part of the picture of what
makes life unfair, but abolishing it would certainly help stop the top 0.1%
controlling massive dynastic wealth for generations.

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sglane
The only way to do this is to have a 100% death tax and to have an open
bidding system for all assets. Otherwise you'll see deathbed $1 transfers of
wealth. The open bidding system for any transfer at any point in life.

The problem with this whole concept is the number of people who received some
kind of wealth transfer from their parents. Pretty much everyone I know has
received financial assistance from their parents and are terrified of the idea
of not having that leg up. Even amounts as small as $5,000 is far more than
most people get. A lot of people don't realize how much their parents gave
them.

~~~
rabidrat
To claim that there is only one way almost always belies a profound lack of
imagination.

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Gys
That would mean all posessions need be taxed at ones death. So governements
would be in competition for those taxes. Most likely by offering tax benefits
;-)

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gumby
Yes, inheritance is fundamentally immoral. An obsession with one's genetic
output is simply primitive tribalism.

My kid has had enough benefits already, and frankly if he can't make it as an
adult that's his problem.

Some people of course can't make it as an adult for reasons beyond their
control (disabilities, extraordinary bad luck, et al) and society would be
better off providing a viable baseline for _everyone_. For example: good roads
benefit everyone. Universal health care benefits everyone and helps small
businesses. This problem will only get more extreme as robots take over more
and more labor.

BTW my kid's only problem with my approach is that I joke that the assets are
going to the home for homeless cats. He doesn't consider cats a good enough
cause :-)

~~~
happyrock
> Yes, inheritance is fundamentally immoral. An obsession with one's genetic
> output is simply primitive tribalism.

I assume you favor your own children over other people's children? If so,
wouldn't that also be "immoral"? When you picked up your child from the
maternity ward, would it have made no difference to you if you had picked up
someone else's child instead?

~~~
gumby
>> [me] Yes, inheritance is fundamentally immoral. An obsession with one's
genetic output is simply primitive tribalism.

> I assume you favor your own children over other people's children? If so,
> wouldn't that also be "immoral"?

Well, as I said, "My kid has had enough benefits already". Certainly he had
the benefits and drawbacks of having the parents he did.

The dual problems arise from the social consequences of a "dynastic drive."
One is the need to produce fully functional adults without the need of
financial, social and other control over one's progeny. If children and their
parents know they will grow and make their own way, it reduces, let's say,
"parent" issues in adulthood. Both know there's no chance to "fix it" post
moving out.

The second problem is the general "me" vs society issue. You were alive, you
got to be a good and a bad person (all of us have been both), you had the
lucky breaks you did. When you die, that's the end of it. If you are focused
internally and on your genetic stem line (whatever that really is) you are
less focused on your needs, and those of others, from society as a whole.

------
joeclark77
How about you can leave no inheritance to your kids if you want to, but you
keep your hands off the rest of us's stuff? If you want to talk about
"fairness", freedom is fair. Stealing from others (even if done through the
mechanism of government) cannot be.

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dbg31415
How exactly would you do this?

Certainly by the point a parent dies, the child has already reaped many
benefits. Education, networking, travel, exposure the finer things money can
buy...

Furthermore, isn't there some benefit to having people who are ambitious with
built-in safety nets? What if Bill Gates hadn't been able to go to Lakeside?
And would we still have Microsoft if he wasn't comfortable dropping out of
college?

Not everyone starts in the same place... some people have more money, some are
taller, smarter, prettier, stronger, faster, etc. We have to make sure the
rules reflect this and constantly work towards keeping the playing field as
level as it can be for those starting out.

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jack9
What if all inheritance was collected and evenly distributed? - at a rate of X
assigned at birth based on existing pool to be awarded at age Z or by medical
need... In general, people do not value governmental transparency so we always
have corruption that would subvert this, but it's the solution that I would
select (in some fashion).

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huac
Taxing property, rather than income, can have this effect.

~~~
dbg31415
Sure, if we were all investment bankers.

But what about cattle ranchers... apple growers... asparagus farmers...
shouldn't they be allowed to pass on their businesses to their kids too?

I know that ranches, like the one I grew up on, are capital-intensive business
that have relatively low margins. Just about anyone would look at a rancher's
books and say, "Yeah, sell it, invest the money in a mutual fund and you'll
make a lot more money." The secret: ranchers aren't doing to for the money.

* Paul Harvey, God made a Farmer - YouTube || [https://www.youtube.com/watch?v=0VrUewoakmQ](https://www.youtube.com/watch?v=0VrUewoakmQ)

~~~
bryanlarsen
Only rich farmers and farmers that die young give their farms to their kids.
Most farmers _sell_ their farms to their kids. Farmers don't have pensions or
retirement investments -- they spent 40 years paying off their mortgage and
then use that capital to fund their retirement.

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yread
Yes! Composition over inheritance!

