Inheritance

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Danoff

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Inheritance gets a bad rap.

It seems very popular to claim that children of wealthy people should not receive that wealth, and should instead have to work to provide it for themselves. That this is somehow "fair". There are many problems with this, but first, a little analysis on what inheritance actually is.

When someone dies, they sometimes have a last statement (will) which says what they want to be done with their property. This step might seem a little weird to some, how do you have property rights when you're no longer alive? But it's generally for practical purposes, since they could simply make the same arrangements prior to death, and sometimes do, so in effect wills just prevent a lot of inefficient maneuvering during life (practical reasons go on, including business contracts). If they give their property to a university, to research, or to a homeless shelter, this act of willing property is called charity. If they give that property to an individual, this act is called inheritance. But what inheritance essentially is is charity to an individual. No different than writing a big tip at a restaurant, or buying someone a house. Often inheritance gets assumed to be linked with genetics, although that's not a particularly solid assumption. For some people, inheritance is when one person gives charity to a person that is genetically related.

So let's look at fair:

It's not really fair that a hermit should receive 6 figures when their house burns down (link above), given that others have probably had their house burn down and been out of luck. It's also not fair that one server gets a $1000 tip while another gets $10. It's also not fair that one charity, say the innocence project, should get a donation while another charity, say doctors without borders, should not receive it. It's not fair because it's at the discretion of the property holder. The same is true for children of wealthy people. It's not fair that the child received charity from their parent, but that's because it's at the discretion of the parent. It's their property, so in effect it is "fair" in that they own it so they can choose how to spend it.

Let's also look at the claim that this is bad for society.

Some people claim that children of rich people receiving inheritance should instead be working and producing rather than receiving that property and simply spending, but rich people can and do work for the benefit of their beneficiaries rather than for themselves. Imagine a rich person who has made enough money to retire, but is still young enough to continue to work. This person might think to themselves, "I could retire right now, but I'm really quite good at making money. I'm not sure my kids will be as good at it as I am, so perhaps I should keep working and making a little extra in case they struggle". That's better for society for several reasons. One is that the productivity is occurring earlier. The work is being done many years before it would, and by someone we already know is quite efficient at producing (yes, that's a generalization that won't always be correct). Number two is that the concern that the child might not be as good at producing may be well founded. Consider that this person has been wealthy while raising their child, and their child may not feel the importance of money the same way that a child raised in a much poorer household might. That child might be already less motivated to produce. So not only is the work occurring sooner, more work may be occurring. Several other reasons are that the inheritance may be taxed at a higher rate, and it may actually reduce the need for social services or other charity (which may reduce the need for social services), if that child ended up destitute.

If you think Jeff Bezos is over compensated, make that your issue. If he gives his money to the Bill and Melinda Gates foundation, or to individuals - that's just a person using their property.

For a little more context on this issue, there are often big concerns among parents about what the presence of a large inheritance will do to children, and people place absolutely insane strings on property in trusts to make their children jump through hoops to get it, in order to make sure that their children conform to their parents notion of what is healthy or proper. Other times, rich people outright refuse to offer more than a threshold to their children. They're willing to make sure their children are comfortable, but not beyond that.

So what are your thoughts on inheritance?
 
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PeterJB

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Inheritance tax needs to go. The children of wealthy parents receiving their money rubs me the wrong way to a degree (note: "wealthy" in this instance refers to people for whom work is optional rather than a necessity) on the basis that it's merely a game of chance whether you are born into a mansion in Beverly Hills or a mud hut in Africa. And if you are the former you have complete freedom over you're life, because money becomes essentially meaningless and you can spend it however you like, merely because your parents might be famous actors or athletes or founded a large company, not because of anything you yourself have done. If you already have a net worth in seven or more figures, having that doubled when your grandparents die is needless and completely unnecessary. But at the end of the day, if it's money that was earned legally and honourably, it up to them how it gets spent rather than having the government dipping their hands into the piggy bank.
 

Keef

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It's not fair because it's at the discretion of the property holder. The same is true for children of wealthy people. It's not fair that the child received charity from their parent, but that's because it's at the discretion of the parent. It's their property, so in effect it is "fair" in that they own it so they can choose how to spend it.
I don't agree with your assessment of the concept of fairness. The act of receiving charity is not unfair. The act of not receiving charity is not unfair. Likewise, the acts of either giving or not giving charity are also not unfair. Like you said, a property owner should have the ability to use their property as they see fit, that's the bottom line, and no unfairness can be derived from that. Problem: Dead people don't exist and therefore have no free will.

What's unfair is the difference in opportunity to receive or not receive charity. Specifically when it comes to familial inheritance which is by far the most common and understood definition of "inheritance", the person in this equation who has no choice in the matter and therefore is treated unfairly is the child. The child had no choice in who to be born to, and therefore no child can ever be offered the same opportunity at life, liberty, and happiness/property as any other child. For organizations this doesn't matter - organizations do not/should not enjoy the same rights as an individual, but instead are developed by groups of individuals using their free will, and therefore all have the same opportunity to be recognized by charity-givers. This is very different from children, all of whom are forced into existence by no choice of their own.

Fact: Some children are given all the success forged by another person, while others are doomed to failure from inception. That is not fair. At birth, every child should be offered the same opportunity of achievement and that necessarily means that every child must start from the same point. That implies that either "inheritance" should either be distributed evenly amongst everyone or that everyone should simply be entitled to nothing.

My thoughts on inheritance used to be the complete opposite of what they are now. But then I experienced the process, I used what I was given, I found out that I needed all of what I was given, and ultimately ended up in the scenario that from a certain point forward, absolutely everything that I own will be mine, earned by me alone, nothing having been gifted from anyone else, and the realization that no point will I ever be able to achieve the same as my "peers", not because I didn't work as hard or didn't earn the same certificates or degrees or didn't have the same exact jobs and knowledge and skills, but purely because they will be given more success than myself, most of which is not their own. In fact, they will be given so much success that they didn't earn that at some point I will no longer be able to call them my "peers" - they will instantly ascend up the ladder to a different class of wealth, and all they had to do to achieve that was wait for somebody to die.

Good for them I guess, but they sure as hell are never getting any charity from me. They didn't work for it. If I had my way, inheritance would no longer exist because "dead people rights" would be eliminated. You'd have two choices - either use your free will to distribute your wealth before you die, or have it all absorbed and distributed for the betterment of society upon your death. No child would ever begin life in a position above anybody else. Ultimately, all humans would be given the exact same opportunity to be born with nothing and also die with nothing, as nature intended. Everything in between is up to the individual.
 
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Danoff

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I don't agree with your assessment of the concept of fairness. The act of receiving charity is not unfair. The act of not receiving charity is not unfair. Likewise, the acts of either giving or not giving charity are also not unfair. Like you said, a property owner should have the ability to use their property as they see fit, that's the bottom line, and no unfairness can be derived from that.
If I give you $1 and don't give it to someone else, it's not fair in at least the respect that you got $1 and they didn't. It can be "fair" in one respect (property rights) and unfair in another (effective distribution).

Problem: Dead people don't exist and therefore have no free will.
It's not a problem.
What's unfair is the difference in opportunity to receive or not receive charity. Specifically when it comes to familial inheritance which is by far the most common and understood definition of "inheritance", the person in this equation who has no choice in the matter and therefore is treated unfairly is the child. The child had no choice in who to be born to, and therefore no child can ever be offered the same opportunity at life, liberty, and happiness/property as any other child. For organizations this doesn't matter - organizations do not/should not enjoy the same rights as an individual, but instead are developed by groups of individuals using their free will, and therefore all have the same opportunity to be recognized by charity-givers. This is very different from children, all of whom are forced into existence by no choice of their own.
Yes, it is unfair when you look at who received charity (my example above).
At birth, every child should be offered the same opportunity of achievement and that necessarily means that every child must start from the same point.
Which is impossible given our current state of technology. But also states specifically that you cannot freely charitably give your money to a child, any child.

In fact, they will be given so much success that they didn't earn that at some point I will no longer be able to call them my "peers" - they will instantly ascend up the ladder to a different class of wealth, and all they had to do to achieve that was wait for somebody to die.
What others may have been given and what you have been given is not necessarily the same. If you define "success" as net worth, you may be right that you cannot compete with charity someone else has received. But you shouldn't define success that way, it's a very narrow view of life.
They didn't work for it. If I had my way, inheritance would no longer exist because "dead people rights" would be eliminated. You'd have two choices - either use your free will to spread your wealth before you die, or have it all absorbed and distributed for the betterment of society upon your death. No child would ever begin life in a position above anybody else.
You can give someone inheritance before you die. And you can set up trusts, companies, etc. that never require "dead people rights". What you describe, eliminating inheritance, even if you describe it including never being able to charitably give to any child, would absolutely not achieve, not even close, your goal of having every child begin in the same position. That's because money is not even the biggest factor.
 
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Inheritance should be encouraged and be without penalty (taxes, etc).

"I could retire right now, but I'm really quite good at making money. I'm not sure my kids will be as good at it as I am, so perhaps I should keep working and making a little extra in case they struggle".
This is one of the things I'd like to accomplish. Build up enough wealth to guarantee, as much as possible, that I've provided for an indefinite number of inheritors. Obviously it's going to depend on what they do with the money, but practically it's possible to pass on enough that the recipients never have to know poverty, or even an average lifestyle. Then they can go on and do the same.
 

Danoff

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Inheritance should be encouraged and be without penalty (taxes, etc).


This is one of the things I'd like to accomplish. Build up enough wealth to guarantee, as much as possible, that I've provided for an indefinite number of inheritors. Obviously it's going to depend on what they do with the money, but practically it's possible to pass on enough that the recipients never have to know poverty, or even an average lifestyle. Then they can go on and do the same.
Me too. It's an issue that concerns me more and more these days. Why would I shut down my earning potential when my beneficiaries may never end up with the circumstances I have? More and more it's what keeps me producing.
 
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Fact: Some children are given all the success forged by another person, while others are doomed to failure from inception. That is not fair. At birth, every child should be offered the same opportunity of achievement and that necessarily means that every child must start from the same point. That implies that either "inheritance" should either be distributed evenly amongst everyone or that everyone should simply be entitled to nothing.
Is inheritance the only factor in this? I'd say obviously not. Some people aren't really fit to be parents at all and have kids anyway. Ignoring that just gives them room to continue, especially if they know they will be given a "fair share" for each child they have. Then there are even more factors, as Danoff eluded to. The genetic lottery is very real.
 

MatskiMonk

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I think some perceptions are getting mixed up here.

Based on averages here in the UK, "kids" will be in their 50's before inheriting anything. Being born into a wealthy family and inheriting wealth upon parents death are really two separate things when it comes to equality of opportunity.
 

TheCracker

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I think some perceptions are getting mixed up here.

Based on averages here in the UK, "kids" will be in their 50's before inheriting anything. Being born into a wealthy family and inheriting wealth upon parents death are really two separate things when it comes to equality of opportunity.
By being born into a wealthy family i guess you are talking about 'trusts' that maybe parents or grandparents have set up for their kids/grandkids - in which upon turning 18 the trust gives out either all or drips out that money set aside?

In which case these trusts are set up as a way of circumnavigating or at least mitigating inheritance tax. So really, its not two separate things, its just one thing trying its best to avoid the other.

This is one of the ways in which inheritance tax systems are flawed. There are plenty of ways around avoiding it if you have the means to set them up in the first place.
 
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TonyJZX

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I think people should rest assured that in most of the west, the political class own properties and are wealthy... the avg. i get is from $150-$250-$500k usd for most policitians. Its well known Bernie Sanders gets $175k. We have a politican here who is well known who has something like a dozen properties he derives passive income from.

So they will always protect real estate as an investment and no inheritance tax. If you go against this then expect to lose elections.

I am personally surprised to read here and on other places that Americans espouse some views that socialists would find abhorent.

Its well known that in Russia China communist Vietnam etc. they did 'asset redistribution' in an effect to make sure that doctors and laborers has the same pay and their childen started from an equal footing.

We do have whats called capital gains tax. This is obvious.

However I'm not sure what a wider ranging inheritance tax will do except to get into the 'politics of envy' which is what some politicans push here.

I would rather society try to push equal and fair access to housing, free medical, free educaton top to bottom.
 

MatskiMonk

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By being born into a wealthy family i guess you are talking about 'trusts' that maybe parents or grandparents have set up for their kids/grandkids - in which upon turning 18 the trust gives out either all or drips out that money set aside?

In which case these trusts are set up as a way of circumnavigating or at least mitigating inheritance tax. So really, its not two separate things, its just one thing trying its best to avoid the other.

This is one of the ways in which inheritance tax systems are flawed. There are plenty of ways around avoiding it if you have the means to set them up in the first place.
That's not really what I meant, obviously things like Trusts and that kind of thing can come in to play, but my point was that inheritance is statistically unlikely to directly have a bearing on the kind of opportunities you get in life, because it likely doesn't come into play until you're well into middle-age. Having wealthy parents gives more opportunity irrespective of inheritance.
 

Danoff

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Having wealthy parents gives more opportunity irrespective of inheritance.
The real genetic lottery is having parents that love you and care for you, raise you with a healthy emotional balance and model healthy behaviors and responses. That's far more important than money. Tons of kids don't get that. Many of them "rich".
 
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Groundfish

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If I had my way, inheritance would no longer exist because "dead people rights" would be eliminated. You'd have two choices - either use your free will to distribute your wealth before you die, or have it all absorbed and distributed for the betterment of society upon your death. No child would ever begin life in a position above anybody else. Ultimately, all humans would be given the exact same opportunity to be born with nothing and also die with nothing, as nature intended
Thanks, Stalin.
People can come from literally the worst possible circumstances and still succeed, provided they dont subscribe to your stance that they are victims.
If you continue to believe you are a victim you will have hard times.
Fact is if I die with a dollar in the bank and I want that dollar going to whoever I want and it’s in my will that’s the right thing. The dollar is a product of MY labor and belongs to me, no one else.
Here’s an example of the concept of flipping the script from victim hood to pride and strength and freedom…
 

Danoff

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Here’s an example of the concept of flipping the script from victim hood to pride and strength and freedom…
Liar Liar beat them to it.

ee000f08c308e61abc9449a3dee0db9e.jpg


That clip was... absurd. Victimhood is, of course, a terrible mindset, and a recipe for failure. I don't know what you mean by "succeed" in your post, but it's not true that people can come from "literally the worst circumstances" and still "succeed" if you mean it the way I think you do. You don't understand what the worst circumstances are.

I've got no problem with your message that people should take possession of their lives, and live not as victims but as the driver, regardless of their circumstances. The problem I have is with how easily this becomes a dismissal of the real lack of control that people have over their circumstances, and just how bad it can get.

It's good to help people. Some of them really need it.
 

Keef

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If you continue to believe you are a victim you will have hard times.
Ever notice how the only people who ever say this are either an extremely tiny percentage of highly gifted people, or people who had opportunities handed to them? Out of all the pilot friends I've made over the years, about 95% of them already had an aviation mentor within their family. Somebody to expose them to that opportunity, inspire them, and guide them. I know literally one person who told me his story of growing up in the hood, surrounded by crime and drugs and poverty, until he joined the military where he was exposed to new opportunities and used its assistance programs (socialism) to pay for it.
 
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Kinda curious, what's the inheritance tax rate in the US? In South Africa, the estate tax is basically 0% up to a certain amount, around R3.5 million.

As an aside, I know that South Korea's inheritance tax rate is 50%. Guess how many SK millionaires try to skirt this tax by any means possible.
 
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Groundfish

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Well, I’m glad you know many pilots keef.
I have a friend who was able to get a mortgage about 3 years ago so he has a house now.
It sadly was the result of a drunk drivers crash killing his father.
His mother left a long time ago.
If things were your Stalinesque way the drunk driver killing would be making a charitable donation lol.
That is why it is illogical.
It would be in societies interest to kill anyone with any assets because they would get distributed to all.
Lol You espouse murder, just like Stalin did and that’s yet another reason Socialism is wrong.
 

NotThePrez

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I probably have a very simplistic view on this topic, but I personally think that the matter of Inheritance should ultimately come down to the person who is giving the money, and that's it. Regardless of if the assets are going to family, friends, charity, or what haveyou, it's ultimately up to the person who is making that decision, and in what fashion it gets handed down.

I'd like to think that if I had something worth leaving to somebody, I would have a good idea of how they are as people before making that decision. I.e., if it turns out my hypothetical children and/or grandchildren are spoiled, terrible human beings, I'd probably be less likely to give it to them, and perhaps be more willing to give my assets towards a close friend, some kind of charity, or a person that I trust that could use some help (Knives Out vibes going off).

I also think that inheritance tax shouldn't be a thing, though I admit that I'm not well-versed on that subject. I'm choosing to give my funds to a hypothetical individual, not the hypothetical individual and the government. I'd like to think/hope that both myself and the person I'm giving money to have already done their due diligence with paying taxes over time, so why is there a need to tax the money/property that I own and still have control over for the sake of preparation of my (un)timely demise?
 

Danoff

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I also think that inheritance tax shouldn't be a thing, though I admit that I'm not well-versed on that subject. I'm choosing to give my funds to a hypothetical individual, not the hypothetical individual and the government. I'd like to think/hope that both myself and the person I'm giving money to have already done their due diligence with paying taxes over time, so why is there a need to tax the money/property that I own and still have control over for the sake of preparation of my (un)timely demise?
* nobody tell this guy about the gift tax *

;)
 
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Groundfish

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Sorry if you had troubles connecting the dots in my story.
To spell it out my friend is normal-can’t afford home purchase.
Father had house.
Drunk killed father.
Friend and friends brother sell home split money get enough for large enough down payment to afford house.
They got inheritance, sadly by the loss of their one remaining parent.
According to keefs Stalinesque idea this is what would have hapoened
Drunk kills father
State takes house
My friend is left with no family and no inheritance
A drunk driver killing someone provided funds for the State to “distribute equally” or whatever fairy tale socialist idea of your choice.
So theoretically every time someone who has any assets was killed those assets would go to everyone else, therefore it’s in the interest of society to kill EVERYONE with assets which is absurd.
That’s why keefs idea is illogical and morally wrong-socialism in a nutshell.
 

NotThePrez

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* nobody tell this guy about the gift tax *

;)
Looks up the gift tax.

I get the feeling that the IRS person who came up with this just wanted to make more work for his subordinates, rather than create an actual revenue stream. :crazy:
 

Danoff

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Sorry if you had troubles connecting the dots in my story.
To spell it out my friend is normal-can’t afford home purchase.
Father had house.
Drunk killed father.
Friend and friends brother sell home split money get enough for large enough down payment to afford house.
They got inheritance, sadly by the loss of their one remaining parent.
According to keefs Stalinesque idea this is what would have hapoened
Drunk kills father
State takes house
My friend is left with no family and no inheritance
A drunk driver killing someone provided funds for the State to “distribute equally” or whatever fairy tale socialist idea of your choice.
So theoretically every time someone who has any assets was killed those assets would go to everyone else, therefore it’s in the interest of society to kill EVERYONE with assets which is absurd.
That’s why keefs idea is illogical and morally wrong-socialism in a nutshell.
That's a little more readable.

I think you make a good point to @Keef about displacing children from the house they are in when their parents die if inheritance is banned, and I'd be interested in his response to that. But the second point, where suddenly it's advocating murder because it's in society's best interest to kill everyone... uh... only if you don't actually pay any attention to this hypothetical no-inheritance world. Obviously, even in the hypothetical, it's NOT in society's best interest to kill everyone. I'm sure that the father in this example had some societal value. But beyond that, the estate tax already provides a current interest in murdering people. So, the Bezos estate, for example, currently would pay the US a lot of money upon death. Does this mean the US is a system set up to murder Bezos because the state has some interest financially in his demise?

Try actually thinking through some of this stuff. It's paper thin, doesn't stand up to even a little scrutiny. That was the worst attempt at the organ-transplant variation of the trolley problem I've ever seen.
 
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Groundfish

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Sigh.
Again the strawman. Where in the world did you come to the conclusion it’s kill everyone?
That was never said except by you.
 

NotThePrez

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Sigh.
Again the strawman. Where in the world did you come to the conclusion it’s kill everyone?
If I had to guess, because you said this:

So theoretically every time someone who has any assets was killed those assets would go to everyone else, therefore it’s in the interest of society to kill EVERYONE with assets which is absurd.
And before you say it, assets are not limited to money, it can also includes non-physical items such as debt, or perhaps even your clothes and such. I'm pretty sure that pretty much every adult (at least in the US) has assets in some capacity.

You're insinuating that under Keefs system, society would be encouraged to kill people so that others could gain their assets, which is stupid because A) not all assets are positive ones, and B) that would require homicide to be allowed by law.
 

Groundfish

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Perhaps I should have clarified significant positive assets above dollar amount such and such and above the average.
And in fact it’s still true which leads me to my next problem which is why should you and I benefit in this scenario from a drunk driver killing someone when the family of the dead person gets nothing?
Again absurd.
Keefs idea fails on all counts. If you think it through the premise leads to absurdity.
His other premise is even more absurd that somehow everyone needs to start life equally?
Impossible.
These ideas about equity redistribution and no property ownership etc are toxic and historically always lead to poverty and death.
Why oh why would anyone want everyone to own their stuff that their labor and sacrifice brought them?
The idea is unreasonable.
It’s not a sound understanding of human nature to theorize that all people will all work together towards common good.
That’s a Fairy Tale.
But that’s the very premise of socialism.