I've never understood why the government thinks that just because someone has died, they deserve 40+% of money that has already been taxed.

I'll give you the benefit of the doubt and answer the question honestly. Assuming we're talking about a country where "The Government" is pretty well behaved, said government doesn't put that money in its pockets. It makes it work for the people it represents. Working for your money and becoming filthy rich is fine. But when you die, you die. None of that money is yours anymore, because you no longer exist. We, as a society, are free to decide what we do with what's left of you and your belongings. In an ideal world, we can use that to better the lives of others.

Unless you were a truly stingy person in life, your affluence will have already have had huge positive impacts on those near and dear to you. Once you're dead, why should they be any more important than any other person?

> But when you die, you die. None of that money is yours anymore, because you no longer exist. We, as a society, are free to decide with what's left of you and your belongings.

Most governments enforce a person’s will after they die. People generally elect to distribute their property to particular people, specifically to avoid it ending up in the hands of “we, as a society”.

As a society it's fine to execute a will, as long as it doesn't harm society. Entrenching generational wealth and furthering poverty seems like it's harmful. This is understood, after all that's why there is an inheritance tax in the first place. I'm argueing that it needs to be way higher.

I disagree with your assumption that entrenching generational wealth furthers poverty. When inventors believe that they can build generational wealth, they are motivated to produce better products and services, which they are able to offer at far lower prices than their value to all of us, so we all become richer. For example, I am writing this on a smartphone that cost just a couple hundred dollars. With it, I can access all of the world's knowledge and communicate with anyone instantaneously. For just a couple hundred more dollars, I sit beside an air conditioner that keeps me comfortably cool even though it is boiling outside. The barons of the gilded age could not have purchased such products for any price. So who is richer, me or them? The inventors of these products are rich, but what do I care? I am lucky to have been born into a world where these products are available for such a low price. While it hasn't been proven conclusively, anecdotal evidence suggests that more invention occurs in countries which defend generational wealth, and we all benefit.

So many assumptions in your logic and your use of "soceity" is dubious at best.

It really just sounds like you think we are all children under one global nation.

I personally will never agree to that, and want my offspring to do better than the rest so we will be at odds at some point.

How does government pork benefit me? Other than burying me in taxes and my children in debt?

>absolutely absurd.

>disdain of wealthy people

>advocate theft.

>none of your business

>vilifying people for wanting to pass down their hard-earned money

In the context of the comment you're replying to, none of this is reasonable, and some of it isn't even relevant. You should consider that you're forming an emotional, hostile argument.

Perhaps the angry reaction is justified given that the comment implied that “society” should be free to do as it pleases with a person and their property when they die. Most countries today vigorously protect the bodies and property of the dead.

> We, as a society, are free to decide with what's left of you and your belongings

A country can be a society, and if that society decides that its dead bodies and their belonging need protection, then so be it. Doesn't seem like the most beneficial thing to do, but you're free to disagree with me. If a dead person's organs can be used to save the lives of others, vigorously protecting that body seems like a selfish thing to do.

Most western societies have rejected your utilitarian thinking, upholding an individual's choices over any forgone benefit to others. For example, every day people die on organ transplant waiting lists, and every day healthy people die in car accidents, but their organs are discarded because they did not check the "organ donor" box on their driver's license application.

OP is literally claiming that once I die, all of my money now belongs to society.

No adjective adequately describes this belief other than "absurd".

> This is absolutely absurd

This adds nothing to the discussion.

> Your belongings and wealth belong to your estate and as the owner of it you decide how it should be distributed.

Well, that's literally the question at hand. You don't get to just say that it is so. A dead person's wealth belonged to them, but they are dead. They can't vote, they can't apply for loans, and, the parent is arguing, they can't arbitrarily pass their money to whoever they choose. They could have, while alive, but now they are dead.

> Because it's none of your business. Why on earth are you vilifying people for wanting to pass down their hard-earned money to their children?

This is just some weird non-sequitur. No one's doing any vilifying, and Parent is arguing that it is societies business (and incidentally, given that an estate tax exists, society currently agrees with the parent poster)

You're deliberately misrepresenting what's being said. We do understand the legal concept of an estate. But its validity is what's being discussed here.

No, you can't. There are all sorts of restrictions, which you already know. But since you are deliberately missing the point, I won't be responding. Feel free to get in the last word.

> Once you're dead, why should they be any more important than any other person?

Why favor your family, friends, or countrymen over any other person during your lifetime either? Everyone behaves this way. For example, why does government sponsored health care in western countries only cover their own citizens? Do the lives of people in less affluent countries not matter? Do they have less intrinsic value?

This is a poor argument - it contains no distinction from any taxed transaction. All money changing hands has "already been taxed" in the way you are using the phrase. Unless you are saying that all tax is wrong, in which case you should definitely make that argument rather than this much more specific one.

It isn't about "deserving" anything. The societal problems behind inter-generational wealth are wide and deep. This was recognized by the founders of the US, in particular Thomas Jefferson.

Adam Smith: "There is no point more difficult to account for than the right we conceive men to have to dispose of their goods after death."

This is taxation for policy reasons, not income.

This is creating a false narrative that the only way to economic mobility is through theft upon generational transfer. It conveys a message of helplessness rather than rewarding usefulness and it's a vicious cycle.

Economic mobility should be solely predicated on the expression of competence/ability in the pursuit of providing value to others in your society. It's not even that hard[1]. Get an education and a job, avoid the big economic sinks.

> This means that 40 percent of why some Americans are extraordinarily well off has nothing to do with smarts, hard work, frugality, lucky gambles or entrepreneurial ingenuity. It is simply because they were born to rich parents.

We should not fear the money landing in undeserving hands, it will rapidly be drained away if that is the case. Many(most?) very wealthy families employ wealth managers that ensure that money is profitably engaged with the society anyways, so in reality the money is not really in the heir's hands anyways, but is tied up in companies that are serving the country and employing others.

[1]: https://www.brookings.edu/opinions/three-simple-rules-poor-t...

This starts with an excellent point - many bad, emotionally-driven arguments about how society works are predicated on the concept of "deserving". Bad people "deserve" to suffer in prison. Good people "deserve" every penny they make. The arguments rarely bother to go beyond those assumptions. The concept of "deserving" is real and important, but it's also commonly the linch pin of bad-faith arguments.

The purpose of taxes is to fund the budget. This feels like back door social engineering.

There are other purposes for taxes, the most famous one being Pigovian taxes, which attempt to price negative externalities into a market: https://en.wikipedia.org/wiki/Pigovian_tax.

The inheritance tax is not a Pigovian tax, but its purpose can also be primarily non-budgetary.

It's front door social engineering. See also tobacco and alcohol.

Lots of the money hasn't been taxed. If you owned stock for decades but never sold it, it wouldn't have been taxed.

The money that was used to purchase the stock originally was probably post-tax dollars

They money I used to buy a candy bar is post-tax dollars dollars, but I still pay sales tax on it. They money I use to pay for a taxi ride are post-tax dollars, but the taxi driver still pays income tax on it. When I sell that stock I bought with post-tax dollars, I still pay capital gain taxes on the profits.

Post-tax dollars aren't magical things that mean you never pay taxes again. They're just an accounting tool that makes dealing with some tax-exempt activities easier.

Are you suggesting that capital gains taxes on stock sales are also wrong because the stock was purchased with post-tax dollars?

And you aren't taxed that amount when you sell it, you're only taxed the profits.

You pay taxes on the gains. (Unless you purchases them through a Roth 401K/IRA where you don't, but those have tight limits on it.)

Unless it’s stock in e.g. a 401k or IRA.

Tax money must come from somewhere. Imagine this as a zero-sum game where you have some fixed total amount of taxation that you're trying to reach and the question is just who pays how much.

Given that, is there anyone who could possibly need their money less than the dead?

The government doesn't tax anyone who dies. They tax the estate of the wealthy. Few people will be affected by it.

There is plenty more you can read on the topic. The general idea is that it helps create a meritocratic society.

If you read the article it will help:

"Some will argue that this example ignores any income and payroll tax the wealthy parents paid when they originally earned the $50 million. But if the couple paid their personal chef’s wages out of after-tax income, we wouldn’t think their personal chef should get credit for the taxes they paid. Similarly, we should ignore any income or payroll tax the couple paid when considering how much their son should contribute to the costs of government."

Because we live in a society.

> Because we live in a society.

Why don't I have a downvote button for this?

because you don't have 501 karma, and you probably won't at this pace.

Because dynastic wealth is unearned and aggravates unequal circumstances of birth and accumulates capital in less competitive markets thus delegitimizing the purported meritocracy that is capitalism.

In fact I think the government has all the rights to take all belongings after someone dies. After all the person earned it from society, not its descendants.

What the government gives it must first take away

It's not just the money. Imagine real estate. Today's value might be completely out of the owners. Say granny wants you to inherit their old penthouse in downtown New York (just an example, I have no idea if it is technically possible to own such a thing) or any other real estate that they used for living and is now worth tens of millions. The government won't let you have it. Or Grandpa's old company. It makes a little profit but was always in the hands of the family and it is now evaluated for tens of millions. Government forces you to sell it.

I could go on. Art collection, old cars, even immaterial rights or stocks that are massively undervalued right now for one reason or another (for instance because the founder just died suddenly).

Inheritance taxation is inherently unjust because it cannot distinguish between goods that are easily traded for and the ones that cannot easily be sold.

There is no point in building wealth or a family business other than to ensure your family will benefit from it when you're gone. Sure, childless young people with no perspective don't understand this mindset of intergenerational family businesses.

If your kids can't make it in America with the $23 million that's exempt from this tax then you did a poor job raising them to manage their money.

> There is no point in building wealth or a family business other than to ensure your family will benefit from it when you're gone.

Sure there is. They'd still get to keep the majority of it.

Maybe because working hard and doing good work that people value adds to life satisfaction and status.

That's all the rest of us have going for us. Passing on billions isn't even an option.

The only reason you think long term is for your children and not their wider community or society?

Community and society tax me for everything I do, eat or drink, all my life. Wealthier people already contribute more per capita than most other people, while getting the same benefits. What's the rationale for feeling obliged to contribute even more? Survivor's guilt?

This makes no sense. There is also no point in starting a (for profit) business except to make profit. Neither inheritance nor profit are eliminated by taxes - they are reduced.

For assets not taking advantage of the step up basis in New York (e.g. small business profits) the tax rate would be ~50% federal and state in the year earned, plus 56% federal and state when you pass. That's an overall rate of 78%... I'm not sure "reduced" is the right word here.

I work more time nowadays, to the tune for 70 billable hours per week (and generate more tax revenue to my country as I both get more revenue and my tax bracket increases) so I can give a better life for my kid, and if something happens, he will face no difficulties.

If I knew he would not get it, or would get less than half of my savings/everything else, I would not work a single hour above what we need currently to live as we do, taking decreasing tax revenue for my country. Maybe I am biased as I also am set to receive some money when my parents die, but my grandfather immigrated, worked his ass off, built savings, returned here, started a business, built properties, my father inherited it, and works hard to keep them well so I inherit them, which I will do the same for my kid. What would be the point of my grandfather sacrificing a lot of his life away from his home if not to build a better future for his future generations?

A wealth/inheritance tax does not necessarily mean 100%. The flip side of everyone working lots of hours would be the chance to spend more time with friends and family. That also seems valuable for future generations.

Can you give real numbers? How much are you currently expecting your kids to receive post-tax after your death under existing regulations? How much would it be under the proposals?

I am not American so I don't know the proposals. In my country, assuming current market situation, he would get close to a million and a half, close to a 200-300k will probably be for taxes. (not sure of the exact numbers as I am not up to date with all the little taxes you pay).

For you to have an idea, Currently, for every euro I get, I pay in taxes+social security+etc(all the little taxes around everything) around 60% of the money to the government.

We're talking about lowering the $23MM estate lower bound to a smaller number. That was the reason I asked for numbers. Nobody works hourly and has $23MM.

I thought you were talking about the article.

I was replying to parent:

'I've never understood why people think that just because, e.g., their parents created a business worth millions of dollars, they should get that for free.'

This post inadvertently reminded me of why communism always fails.

Communist policy makers assumed worker-cogs that thought nothing of providing for their family which resulted in people’s productivity falling dramatically and the resulting mass starvation, etc. (historians cite >100M deaths from attempts at implementing communism! yikes)

But that isn't the argument being presented because if the parents don't will it to the children, then no one thinks the children should get it (well, a few such children might and may legally challenge the will, but that is a very small minority opinion). The actual argument is that, having paid the taxes, the ones who own the business should be able to do with it as they wish including giving it away on death. At the core is a basic question of how should taxes work. Should you pay them up front when you get money, at the end of your life when you die, all throughout depending upon your wealth (such as property tax)? Each of these has positives and negatives associated with them, which is part of a larger discussion on how taxes should work.

Indeed. This enhances generational affluence and generational poverty.

It's understandable that (grand)parents want to do right by their (grand)kids, and leaving them a pretty penny is a pretty thoughtful thing to do. But when this then has huge negative effects on society, it stops being a nice thing to do. Inherit for free up to a certain amount. Redistribute the rest.

While I generally agree that we ought to have an inheritance tax, I want to push back on this because I think it's a poor argument in favor of inheritance taxes.

The question is never about what the children think they deserve, it's entirely about what we as human beings work for. Most parents don't care about their own consumption, and instead work entirely for the well-being of their children. It doesn't matter what the children think. The argument is that it matters what the owner of that wealth thinks should happen to their own wealth, and that nuclear family values are deeply entrenched in society.

There are a number of arguments that you can make that the cost of inter-generational wealth and the benefits of taxing it far outweigh the familial considerations of wealth transfer (especially after a high enough dollar amount). But THOSE are the arguments that we need to be making.

If someone decides to give you a bunch of money that they have earned and paid taxes on, should they be able to?

Absolutely, and it should be taxed as unearned income for the recipient above some reasonable level - perhaps the median per household annual income.

“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

― Upton Sinclair

“Men sooner forget the death of their father than the loss of their patrimony”

― Niccolò Machiavelli

This is one of the questions whose answer is not immediately obvious if you think only one step. If you generalize this in a society, riches will accumulate further over subsequent generations because it is easier to make money if you have money. Even if you are. It that skilled, your financial advisors will just turn your money into more money.

As a result, the split between poor and rich will widen and widen. Until at some point, where the situation will implode or be unfavorable in some significant way. Hence, to have a stable system, the limitless accumulation of wealth should be reduced.

There should be inheritance, of course, and half of few million is still lot. However, this requires some progressively adapting tax percentages, based on the amount of inherited wealth.

> I've never understood why people think that just because, e.g., their parents created a business worth millions of dollars, they should get that for free.

None of your business?

tl;dr the same logic that people use to justify taking more of an inheritance also is applicable against anyone having that much wealth in the first place

Because it is their parent's wealth to do with as they please? Why does death suddenly mean all or some of what you have worked for now belongs to the state? Why do the rules change when it comes to children of an estate compared to a spouse? That spouse could be there as little as a few months by the way law works.

It has been taxed as it was earned and accumulated. When it gets spent it will be taxed as well. If it is the transfer of investments they will be taxed when the recipient uses them.

It is private property and we need to stop with the jealously angle being the primary motive of voiding that right. Oh I know, some will fire back with fairness well if it is not fair for the child of a person to receive their wealth in death how was it ever fair for the person to have it in the first place?

Got to love that article, lamenting that the funds about twenty three million are ONLY taxed at forty percent. Seriously why are they taxed at all.

I don't understand why you think the government should double dip into other peoples hard earned money. If I work hard it's for my kids and family, period.

i'm glad there's at least a handful of comments like this. I'm watching my 8 year old through the window while on a conference call discussing raising KPIs for myself and my team yet again.

If I'm able to leave some money for my kids and save them from the grind i've spent the best years of my life enduring I don't see how the government has any right to one penny.

You can't "hard earn" billions. Others must do it for you.

True, you can’t dig a trench valuable enough with kW/hr output to generate a billion dollars in value.

You can, however, come up with an idea that improves the lives of 1 billion people by $10 worth. It turns out that ideas are more important to improving the state of humanity than kW/hr output of hard work.

You may be arguing that being one of the billions whose life was improved by $10 is ‘others doing it for you’

Because they spent their entire life sacrificing for their children's benefit. They poured blood, sweat, and tears into their business. The parents presumably followed the laws and paid all the taxes they were legally obligated to pay.