I have no objection to inherited wealth to families, except that those family members all too often end up with skewed values which they are all too happy to impose on the rest of us via the excessive power granted by that same accumulated wealth.
I'll ask the question another way: why does the child of Sam Walton deserve to live a fabulously rich life orders of magnitude wealthier than someone who spends their life plumbing toilets, and much worse, why are they allowed to use their wealth to hurt other people?
What does "deserving" have anything to do with it? That's entirely subjective. If Sam gave his wealth to a plumber, the plumber wouldn't have been any more "deserving". If he gave it to a hospital, the hospital wouldn't be any more "deserving". No one "deserves" wealth.
Because they have now a disproportionate amount of power, compared to the average citizen, to influence the lives of all of us, to hurt other people, to purchase power and influence to enrich themselves further to the detriment of others. That is not a fair arrangement.
All of the strongest proponents of "pull yourself up by your bootstraps" start hemming and hawing when you talk about eliminating inheritances and truly creating a level playing field. Bootstraps for you, inheritance for me.
To me inherited wealth is just as perverse as nepotism, monarchies, blood rights etc.
For example, should the president's son, because he's the son of the president, have a special citizenship that allows him a $1m income for the rest of his life? And a Presidential health care card that affords him the base care. And a free pass to any ivy league university, just by virtue of him being the son of the president?
We say no, because we believe in a meritocracy. Through hard work and merit, i.e., your contributions to the rest of society and your hard work, you're afforded access to good schools, good jobs and an income that affords you good care.
But if you inherit $10m, you can skip all that. At a normal 5% ROI, you can live the rest of your life on a $500k salary. You can get access to the best tutors, best schools, best care, and perpetuate your success to the next generation. (the idea of social reproduction).
Money buys you tons of opportunities, access and leisure. By inheriting money, you thereby inherit opportunity, access and leisure. We don't accept that if opportunities (e.g. jobs) or access (e.g. special care) is handed down through a corrupt political system, but we do accept it when it happens indirectly when money is handed down, and this money in turn buys opportunities and access.
Of course there's a balancing act. We want fairness in opportunity and access, but we also want to provide for our kids and leave them better of them your parents left you. We want to set-up our kids with a minimum safety net, and sometimes we want to leave our kids a family business we hand down generation after generation. Somewhere in between there's a level of distributive justice that makes sense, where a minimum amount of inheritance is exempted, after which the remainder is taxed heavily.
Personally, when I'm feeling a bit revolutionary, I find myself favoring Thomas Paine's solution in Agrarian Justice to help fund something like a UBI.
Money that isn't available for the rest of society.
Society doesn't need money. Money is just a tool, and doesn't solve any problems on its own (aside from the inefficiency of barter—but even then you need something to barter first). What society needs—what people need—is consumer goods and services. People who own a great deal of money tend to spend proportionally less of it on consumer goods and services for themselves, and more on capital goods. These capital goods enable more efficient production and thus increase the availability of consumer goods for everyone else. Redistributing wealth is a great way to force consumption of capital, resolving a short-term cash-flow issue by destroying the means of production. You get a gratifying boost to your bank account, but after a brief period there is little on the store shelves on which to spend it.
As for inheritance specifically, I agree that it is fair, in general, to say that the recipient of the inheritance has done little to earn that money. So what? Would you really say that you do not have the right to give someone an unearned gift—that this is not a legitimate way for you to choose to spend the resources you have either earned for yourself or been given by others? Or is it only gifts to one's own children which you feel should be out of bounds?
Why would it be any different? Qualitatively speaking, such that you have the right to do the former but not the latter? If it's your property, why shouldn't you be able to give it to whoever you choose?
Of course, as others have already pointed out, inheriting wealth does not guarantee a life free of all financial difficulties. That depends on how the recipient uses the gift.
I don't believe this is completely true, while a lot of inherited wealth is tied up in real estate, most of it will either end up being reinvested or spent which is good for the economy as a whole. The real killer in this case is the estate tax, money thrown into the black hole of the government is never wisely invested.
I really looked for some sort of background on that number and wasn't able to find it. I'm a bit suspicious since it's being put out by an estate planning and investment company. What even constitutes 'losing the wealth'?
Spending inherited money is not the same as squandering it, and of course this does not occur in every case. More to the point, however, the objection to the estate tax does not depend on how the inheritance is used. The owners of the estate desired to give it to their inheritors, not the government. As the owners, and thus the ones who either earned the property or received it as a gift from others, the final disposition of their property is properly their decision to make.
Probably highly dependent on the definition of Rich Families. I would guess that that number is far lower the more money we are talking about. No way that an inherited fortune of $10B is squandered at the same frequency as an inherited fortune of $10M.
There's no way even $10m fortunes are squandered at near that rate. Money has decreasing marginal utility so even though the amount diminishes, the utility granted by it decreases much slower.
This sounds good but it seems to me that this will hurt poor people disproportionately. The rich and powerful already exploit the system in ways the rest of us can’t. Why wouldn’t they still be able to do so under this scheme?
