Let’s see if we can spot the flaky reasoning in this letter to The Times (of London), as prompted by a good(ish) article by Daniel Finkelstein today:
Writing as a parent and as one who stands to inherit a large sum, a far better way to reduce inter-generational inequality would be to set inheritance tax at 100% over a comparatively high threshold (e.g. £500K). Then the older generation would have a strong incentive to sell their large, expensive homes – increasing supply and making property more affordable for the young – and spend the money, boosting the economy, employment and wages. It would also have the benefit of forcing the children of the rich to make their own way in the world – they have enough advantages in life anyway.
First, the writer assumes as a matter of course that “inter-generational inequality” – however defined – is of itself a bad thing, a thing to be prevented by limits on any wealth bequeathed above a certain level. For this writer, he/she assumes that no person should have, in this case, an amount higher than say, £500,000. But why on earth should the state rule that people should be banned from receiving, as a gift, more than whatever some egalitarian thinks is the “right” amount? So the inheritor may not “deserve” it in some sense but so what? If a person does not deserve to inherit £1m, neither do his fellow citizens deserve to have that wealth evenly divided up among themselves, either. I think it was FA Hayek who pointed out that in talking of deserve, we talk of deserve in the eyes of someone else, like a father, boss or God who decides that Johnathan Pearce or AN Other “deserve” to receive X or Y out of the multitudes. But dumb luck in inheriting money or good looks or a high IQ is just that: luck. Luck is neither undeserved or deserved. Through aeons of time, we have evolved into human beings with things like opposable thumbs and relatively large brains. We did not “deserve” those, either, so does this mean we should hold ourselves back to benefit our less fortunate creatures?
Another fallacy here is the idea that when people inherit wealth, the money solidifies in great, useless lumps and therefore other, less fortunate people are denied access to the good things of life. But this is the zero-sum fallacy at work again. If, for example, Fred inherits £1m and John inherits nothing, this does not mean that the range of potential opportunities for advancement has been cut for John, since there are not a finite number of opportunities available. People who inherit money also spend and invest it: the money goes somewhere, on something else. It does not just vanish down a black hole.
Then there is this rather ugly idea that it is an economically good thing to force people to give over a portion of their wealth to the state (!) in order to break up estates, free up land for others, etc. Again, this is the fixed-wealth fallacy. If Lord Bufton-Tufton of Berkshire has a 20-bedroom house and gives it to his son, Lord Twit, that may make would-be homeowners struggling to buy a small semi in Reading seethe, but why should the Lord be coerced into selling his land? When the man dies, his property will either be used as before, or broken up, or sold, or whatever.
It is also a point frequently ignored that people who work hard to create wealth do not just do so for themselves, but also for their children and grandchildren. And when considering inheritance, remember that taxing it is to tax the right of a person to dispose of his property as he thinks fit. Ultimately, how I choose to give away what I have accumulated is none of this letter-writer’s business.
Another fallacy in this sentence:
I think the error is best explained by quoting Dave Barry:
Just substitute “older generation” for “government” and “whoever they sell their homes to” for “taxpayers” and the same logic applies.
A lot of wealthy British will emmigrate to more capital friendly nations if this ever becomes law.
It is also a point frequently ignored that people who work hard to create wealth do not just do so for themselves, but also for their children and grandchildren.
And isn’t the statist, green, left always telling us to make sacrifices for the sake of our grandchildren!
I also fail to see how Lord Twit’s windfall has much effect on the the citizens of Reading apart from to stimulate the jealousy gland in some of them. Hell, he may even employ some of them and pay them sufficiently well that they can afford their dream semi.
The jealousy think is ridiculous. Taken to it’s logical extreme everybody but one on this planet should therefore be jealous of the world’s richest person. The idea of living on a planet with 6.5bn permanently jealous people is hideous.
Anyway, concentrations of money are sometimes very good. Witness the acts of the great C19th philanthropists.
We did not “deserve” those, either, so does this mean we should hold ourselves back to benefit our less fortunate creatures?
How speciest Jonathan! There should be equal opportunities (rigourously enforced by government inspectors) ensuring companies employ their quota of apes. They can work in the typing pooll, presumably producing the complete works of Shakespeare… eventually.
I have seen what the government does with the money it steals from me (and what the people who government gives benefits to do with it), and I have seen what my children do with the money I give them.
If we are going to talk about “deserve” I know who deserves my money more.
***Through aeons of time, we have evolved into human beings with things like opposable thumbs and relatively large brains. We did not “deserve” those, either, so does this mean we should hold ourselves back to benefit our less fortunate creatures?***
Ummmm, yeah, that’s what a lot of people think. I truly think that such logic is behind much of the Green Philosophy, unfortunately.
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Simply put, if a person has built great wealth, their best hopes that the use of that wealth will be in the most accordance with their value system is to leave it to whomever they please, most likely descendants. Some have tried to set up long term foundations with their mission clearly stated, but many have deviated away from the founder’s mission, so a child(ren) are most likely to be similar to the parent.
No one really knows what purpose government will put its plunder to at any given time, as it has a habit of contradicting itself eventually, if not simultaneously. The least best use of the wealth is to give it to the government because, if enough time is spent, the windfall could like be traced to increasing X AND undoing the effect of X. It’s how the Bureaucracy can endeavor to please most of the people most of the time and thereby solidify its position.
This is merely another example of the a priori assumption that “collective” values (meaning those values of the individuals blessed with ‘unquestioned’ Force) are superior to individual values every time. No one can know what a person who gets a windfall will do with it – be a good shepherd of the assets through the market, give it away to others voluntarily, piss it away through bad business dealings (which then benefit the other side of the transaction), or live a spoiled life of excess (which will eventually benefit someone else too). As long as the money and wealth does anything other than molder in the ground behind the mansion, it is doing some good. It merely comes down to whose value system controls wealth. At some point money becomes less a medium for transactions for necessities and becomes a form of power. It’s obvious that power in the hands of individuals is seen as improper, it must always gravitate into the hands of the State and its Bureaucracy. In so doing it becomes blessed somehow. Inheritance Tax is just one means to do so.
Is there such a thing as “enough” advantage in life?
Assuming that one cannot use the government to maintain one’s inherited wealth, there are only a few things one can do to maintain inherited wealth. There’s becoming a miser, which means you live well below your means–so if they want to complain about “undeserved” wealth, well you’re not really enjoying it. There is getting a job and being a miser, which means much the same. There’s starting up a business, in which case you are using your wealth to provide opporunities and possibilities for mutually beneficial transaction for/with others. If you fail, then your wealth is diverted to those who use it more effectively to meet the needs of others.
So, no problems.
What this is really about is the twisted assumption that interactions with others result in either being screwed or being the screwer. Mutually beneficial exchanges of values are not possible in this universe; hence, we must screw the current screwers to make sure no one ends up on top.
Interestingly the same people who complain about inheritance also complain about “corporate power”.
They fail to understand (or perhaps to care) that inheritance tax is one of the major factors in handing over wealth from individuals to corporations.
I disagree with Hayek.
‘Deserve’ is a term thieves use to describe the feelings they have (sub emotive feelings), when ‘acquiring’ something which isn’t theirs.
After spending my childhood observing children competing to ‘deserve’, I replaced all that shit with one concept.
Property!
It really does not matter what the numbers and reasons are. For the most part voters like the inheritance tax because they are envious that someone besides them inherited.
I actually don’t really have a problem with the inheritance tax, particularly relative to other taxes. If you’re effectively going to turn people into government servants by taking the fruits of their labor, better it be people that are already dead.
I am, however, dubious about the letter author’s claim that a higher supply of fancy houses leads to lower costs for starter homes. These aren’t exactly interchangeable goods, here. I know nothing about economics, though, so you probably shouldn’t listen to me any more than you do the original commenter.
And the collectivism is really icky.
I see passing on an inheritance as pretty much identical to giving someone a large gift. It’s legal for me to give all my net worth to a homeless tramp or crack addicted street prostitute, or to my favourite multi-millionaire celebrity. If I had kids it would be legal to give all my money to them too, whilst I am alive. People might view me as stupid, but no legal censure or taxation would accrue.
Therefore why should it be any different, simply if it turns out that I die?
I personally have some degree of contempt for people who accept large gifts which have nothing to do with their initiative, or hard work, and include inheritance amongst that. A wife or husband who gets a £10 million divorce settlement when they did not contribute to the wealth themselves (i.e. would have been joe or jane average if they had married a postal worker); a child of a rich person; a lottery winner; a supermodel or abnormally talented but lazy athlete. Basically anyone who achieves wealth and status by luck rather than choice, decisions, and behaviour.
Yet it is not immoral to be lucky. I can see no crime committed when someone benefits from luck. Ned the workshy scrounger from the local caravan site may simply happen to marry a rich woman, or find a hoard of precious gemstones under the earth in his vegetable allotment. That does not mean we have the right to confiscate any money from him.
I find the whole appeal to “desert” beside the point.
I’m more intelligent than the average person, and that has been a significant factor in the course of my life; among other things, it’s enabled me to indulge in pleasures that I wouldn’t otherwise be able to appreciate, from calculating interplanetary trajectories to conversing with other bright and well-informed people. But I didn’t “earn” or “deserve” that intelligence; my having it was good luck in my genetics and/or my early childhood environment. Do people who didn’t have that good luck have a legitimate grievance against me? Conversely, do I have a legitimate grievance against my sister, who is a professional composer, because I can’t carry a tune in a bucket? If not, then why would anyone have a legitimate grievance against me because I inherited a bit of money from my grandmother’s estate, if their grandmothers had nothing to leave them?
Or take, even, things that it can be argued that I have “earned”: my comparatively good general knowledge, or my skill as a professional copy editor. Part of the reason I have those is that I’m conscientious and willing to make an effort for my own long-term benefit. But psychologists are saying that “conscientiousness” is a fundamental personality trait, one of the half dozen most important, and probably shaped largely by heredity and/or early experience prior to a person’s being able to make the reasoned choice to be conscientious. So my making the effort by which I acquired those “deserved” advantages is also the product of my good fortune in being the sort of person who is inclined to make efforts. To put it theologically, it’s more like grace than like will. Given that, is there anything whatever that can ultimately be said to be “deserved”?
We talk about desert when judging someone, and deciding whether they ought to keep what they have, or lose it, and perhaps be punished for having it. And those who are eager to talk about “desert” are eager to be self-appointed judges.
I find the whole appeal to “desert” beside the point.
I’m more intelligent than the average person, and that has been a significant factor in the course of my life; among other things, it’s enabled me to indulge in pleasures that I wouldn’t otherwise be able to appreciate, from calculating interplanetary trajectories to conversing with other bright and well-informed people. But I didn’t “earn” or “deserve” that intelligence; my having it was good luck in my genetics and/or my early childhood environment. Do people who didn’t have that good luck have a legitimate grievance against me? Conversely, do I have a legitimate grievance against my sister, who is a professional composer, because I can’t carry a tune in a bucket? If not, then why would anyone have a legitimate grievance against me because I inherited a bit of money from my grandmother’s estate, if their grandmothers had nothing to leave them?
Or take, even, things that it can be argued that I have “earned”: my comparatively good general knowledge, or my skill as a professional copy editor. Part of the reason I have those is that I’m conscientious and willing to make an effort for my own long-term benefit. But psychologists are saying that “conscientiousness” is a fundamental personality trait, one of the half dozen most important, and probably shaped largely by heredity and/or early experience prior to a person’s being able to make the reasoned choice to be conscientious. So my making the effort by which I acquired those “deserved” advantages is also the product of my good fortune in being the sort of person who is inclined to make efforts. To put it theologically, it’s more like grace than like will. Given that, is there anything whatever that can ultimately be said to be “deserved”?
We talk about desert when judging someone, and deciding whether they ought to keep what they have, or lose it, and perhaps be punished for having it. And those who are eager to talk about “desert” are eager to be self-appointed judges.
You finally got there, IHT is a gross breach of property rights. As such it has many malign effects, including interfering with the basic human desire to leave your wealth at death to your nearest and dearest, not to mention taking the money from people at their most vulnerable. Until now, it has had majority support because it was seen as a tax paid by other people – the undeserving wealthy – now it is on the table because it affects an increasing number of the middle classes too. When will people grow up and see that, in a society where the wealthy can’t defend their property, neither can the middle classes nor the poor defend what (little) they have.
Cobden, you wrote: It’s legal for me to give all my net worth to a homeless tramp or crack addicted street prostitute, or to my favourite multi-millionaire celebrity. but wouldn’t all these people have to pay tax on that gift? At least i am sure that when you win a lottery there is a tax to pay.
Steve: in a society where the wealthy can’t defend their property, neither can the middle classes nor the poor defend what (little) they have That should be Quote Of The Day.
You are too modest, Stephanie! You obviously do know about economics.
It is not really an inheritance tax, either. You can inherit an indefinite amound without paying any tax, so long as it is from different testators.
It really is a death tax.
I don’t know where DF gets the idea that a confiscatory inheritance tax is an incentive to spend the money and cut one’s children off. Surely it is an incentive to pass wealth to one’s children earlier, either directly or via vehicles that tie the money up, in consequence entrenching privilege further?
I thought that was a bit of a strange argument too. That said, if people have to start planning to avoid tax more than seven years in advance of death, how is a person to know when they will die? Okay, some parents, in their late 50s, say, may already know to whom they want to hand their money, but not everyone is in the same boat. Cirumstances change. So Finkelstein has a point in saying that planning for IHT has become a worry for people even when they are still relatively young and fit.
I believe that it is part of the intention of death tax, (and the US medicare/medicaid structure, and the property tax structure, and imminent domain, and deliberate inflation, and … ) to force properties to be turned over frequently and only held by ‘owners’ paying a lot of taxes.
The government has a vested interested in preventing savings and destroying private asset holding. They have rigged the entire system to this end. Multi-generational savings are just one of the targets in this campaign.
Here is another example of how it works. The system was not necessarily designed for baseballs, they just show up how egregious it is.
Matt Murphy caught the homerun that eclipsed Hank Aaron’s record.
A little bit sickening, isn’t it?
It should actually, even if the goods aren’t perfect substitutes for each other. There will be some people now living in a smaller or poorer quality house who would buy a bigger, fancier house if the price was a bit lower. If more fancy houses are built, then they will be able to do so. This frees up supply of the lower quality houses, thus lowering their price and the effect continues further down the market.
How do you account for the fact that people often create wealth and obtain power with contribution from the state? Or is Microsoft’s treasure of intellectual property protected by angels and John Locke, not the full force of US law? Is the US auto industry, and by extension its shareholders, not getting a massive subsidy in the form of state-funded roads?
The government also does a decent job of keeping the wealthy and powerful wealthy and powerful. Or does anybody think it just random chance that the wealthiest rebel in the American colonies also became the country’s first president?
If none of this were part of the actual landscape, I agree, inheritance taxes should not redistribute wealth. But since we are already redistributing/creating/protecting wealth and power via government, I think we should be more open to a tax that attempts to take some private profits that came through public investment in the first place.
I am unsure of the actual policy that should be in place, but it is pretty obvious the estates of physicians should be taxed at a higher rate than, say, art historians. After all, the physician has a larger estate, in part, because the government distorts the forces in his labor market in a way that cannot be said of the one for experts who interpret sharks in formaldehyde.
I attribute my wealth to having received a good education in Britain, minor public school on scholarship and the University of Liverpool. Obviously since then my experience, knowledge, being in right job and place have also benefitted me. However I now live in Canada where there is no wealth tax. There was one many years ago but it was abandoned, the people didn’t like it. The state does get some money from probate fees, 1 1/2%, and there are capital gains to pay on appreciated assets. But your home is not part of these assets. Come to Canada
They pay income, sales and other taxes, Michganny. Inheritance tax used as a sort of punishment for state employment or privileges is a blunt instrument since it does not discriminate between those who earn their wealth the legitimate way and those that don’t. Far better to hack away at the state privileges you mention in the first place.
I agree inheritance tax is punitive. But with varying degrees, so are any other ones. And the money is going to jobsworths, not adding to GDP, in basically all cases.
Sure, we ought to hack away at the privileges government provides elites, but we also should not act as though government is neutral in the meantime.
Good policy deals with the world as it is, not as we would wish it.
Michganny, you may not realize it, but you sound like it’s 1917 all over again.
“How do you account for the fact that people often create wealth and obtain power with contribution from the state?”
The state is nothing more than representing the people who vote for it, and gives it the money to do so. You seem to be under the misapprehension that the people derive from the state, when it is the reverse.
So if they do not want it to invest in roads or protecting patents or whatever, they would vote for the government who won’t invest in those things.
Intellectual property by the way is no different from other sorts of property such as a house, and unless you know different, your ownership of your home is equally defended by the full force of the law (such as it is). That intellectual treasure by the way has not been created by the state, and nothing stops you from creating something similar.
Do in understand from one of the comments above (re the baseball) that in the US you pay tax on the assets you hold in life as well as in death?
My guess, ian, is that him catching the ball was considered a transaction. He acquired the ball for nothing, and it is worth 1/2 million. Therefore he has to pay a capital gains tax. I would have thought he could have deferred the capital gains tax until he sold it, but apparently not.
If you inherit something that is worth more than the deceased payed for it, it is subject to capital gains tax. Apparently this interpretation also applies to things you ‘inherit’ with a baseball mitt.
But yes, we also pay taxes on assets we hold. There is tax on land and buildings but, for example, factory owners pay taxes on equipment in the buildings that is not considered portable and transitory. A ‘portable’ garden shed is considered personal property and taxed if you do not own the land and pay for it as an improvement. This is a big factor in campgrounds here where people take out a campsite for a year, set a garden shed on it and a deck to sit on, and have to pay taxes on them. If they don’t, the campground owner is assessed for them. Curiously, camper’s trailers, if they have wheels and a towing hitch, are considered vehicles and come under that tax code instead. Unless they are ‘attached’ to the deck in which case they are taxed as personal property.
Yeah. That’s what we think too.
(Oh, and it doesn’t matter that you pay personal property taxes on it, you still have to pay the capital gains tax on it if you sell it and make a capital gain. Whatever it is.)
Here we get taxed on the shed because it is an improvement.
– and yeah we don’t think much of that either.
Michiganny (like so many other well educated and intelligent people) does not fully understand that “two wrongs do not make a right” – indeed that adding another wrong to “balance” a first wrong makes things worse not better.
To say something like the wealth of many people is partly due to various government interventions (fiat credit-money expansion or some other intervention) therefore it is not a terrible thing to have an inheritance tax misses the point that even in these circumstances it is STILL a terrible thing to have an inheritance tax.
Alisa is right about 1917. Lenin promised the peasants “land”, claiming that the land in the hands of the land lords had once belonged to ordinary farmers in past centuries (he did not dwell on the fact that most farm land in the Russian empire was owned by ordinary farmers already – but then Mao played the same trick in the 1940;s in a China where only a tiny fraction of farm land was under the ownership of great landowners).
Of course Lenin was telling lies – he did not intend to give indivdual peasants the land of the land lords (as he implied), on the contrary he intended to steal the land that individual peasants already owned (they would be called “Kulaks” and if totally landless farm workers tried to defend them they would be called “henchmen of the Kulaks” and share the same fate, both under Lenin’s War Communism, which was NOT meant to be temporary when he started it, and under Stalin’s collectivization.
But it would still have been wrong if Lenin had been telling the truth.
Say that the land had been taken by evil robber barons at some point of past history (what Michiganny would RIGHTLY call a violation of the nonaggression principle) and let us say that Lenin had really wanted to hand it over to individual peasants (via some Tom Paine style inheritance tax or whatever) – it would still have been very evil action.
It would have been like the endless “land reforms” of Latin America, where land is taking from landowners (whose forfathers did indeed get the land from the Spanish government – or from some later government) and either divided up into peasant plots or run on communal lines.
Both forms of land reform are a total mess and cause great harm. Eventually large landowners emerge again – or farming says a total mess (that is the nature of the physical conditions of land and climate). And the new large landlords (corporate or non corporate) tend to be more corrupt and ruthless than the old ones ever were (and they think simply of the short term – as they know another “land reform” will come at some point).
It is the same with industry or just cash – whatever government interventions helped create private fortunes, trying to “redistribute” these fortunes (either during the life or upon the death of the owner) just makes things worse.
As far back as the French Revolution such men as Edmund Burke tried to explain these matters.
For example, in “Letter to a Noble Lord” Edmund Burke makes a stong attack on the Duke of Bedford.
Burke points out that the Duke’s family got their land not by any hard work or good fortune – but by being toadies of Henry VIII who gave them land he had stolen from the Church. And Burke points out that the present Duke of Bedford (the “Noble Lord” of the “Letter”) is an idiot – who (for example) is an ardent supporter of the French Revolution – not understanding that the Revolutionaries would steal his land and murder him.
So does Burke support taking away the land and fortune of this man whose family got the land by being disgusting, and whose mental capacity was most likely inferior to the lowest farm hand on his estates?
No he does not. For Edmund Burke understood that such “redistributions” (by tax or other means) were both imoral and caused great harm.
“But how can it be imoral to take away wealth from those who gained (in all or part) from government interventions?”.
And
“How can it cause great harm to take away wealth from fools who can not possibly know how to manage it effectively – indeed who spend their time getting drunk and supporting political movements that would destroy them?”.
Odd though it may seem, it is both imoral and harmful to proceed in this “rational” way, but it is not something that can be explained in short comment.
And, in my experience, people either come to understand these matters by thinking about them themsleves – or they never do understand them.
Paul, I believe that to a large extent it is a matter of personality. Some people just don’t like the rich because they are rich, and the neighbor’s grass is always greener. The excuse that the rich may have gotten to be rich dishonestly is just that – an excuse.
Alisa, finding an analogy between what I say and the Russian revolution makes for interesting reading, but who is to say we are not closer to the first century BC, when the Roman republic was subverted by the aristos? Besides, the Reds and the czars were crap. Both were oppressors.
Paul, I highly suggest you check your timelines. Lenin was dead for 4 years when collectivization started. (’24, ’28). And I suggest you delve a little more deeply into post-Lenin USSR. To link Stalin’s rule to the revolution would please Uncle Joe, but probably no Kremlinologist. Collectivization was, like the purges, part of Stalin concentrating power, changing the USSR from an oligarchy to a totalitarian state.
And we can look to the Stalins (and the Medicis) of the world to see that powerful people will go to great lengths to subvert the current system and bolster themselves. Too much wealth or power in the hands of a few is usually not conducive to democracy. Or necessarily stability.
And Pascal, you are right. Intellectual property is close kin to home ownership. There is a reason why companies like Microsoft and McMansion suburbs flourish in America. It is basically good governance. If you doubt me, or think I misapprehend it, please talk to all the budding entrepeneurs in Harare. Or the Paolistas in tin shacks. They can explain what for-shit government will do.
Lastly, Paul, you need to remember that neither the English nor Spanish crowns were conjuring land out of the mist. I, for one, have no defense for the British aristocracy or Latin American patrons who learned that, contrary to whatever Edmund Burke may have said, people do not like being made vassals on land they lived on from time immemorial.
Michiganny.
I said Lenin and WAR COMMUNISM. Which, as I also said, was NOT at first meant to be temporary.
Under war communism farming (even the smallest farms) were crushed by the state.
I suspect that I know more than you do about “Lenin” and the Reds in Russia. I suggest, if you have not already done so, you start with Robert Conquest and Alexander Solzhenitsyn (if you can not read all three volumes of G.A. just read the third – unless you have read them already).
Then you might read some of the better biographies of “Lenin” (there is a nice series, by one author, on “Lenin”, “Stalin” and so on).
As for “Kremlinologists” well I would say that it is just technical language for “people who do not know much, but use big words” – but Richard Pipers was once called a “Kremilinologist” and he is not all bad (although his view of pre Revolution Russia is unfair)
On government subsidies – I take it that you campaign against government subsidies to students and universities?
As for the concentration of wealth – both “Lenin” and “Stalin” did not live wildly and did not have much wealth.
If one wishes to concentrate wealth good ways are to expand the money supply (as F.A. Hayek was fond of pointing out the “money supply” is not like water it is more like “treacle” that tends to pile up in mounds in certain places – such as the financial services industry and people linked to it) and to impose lots of rules and regulations.
For example, “anti trust” regulations are a good way of protecting established politically connected business enterprises.
Just as the “progressive” (graduated) income tax is a good way of reducing the number of new fortunes that are created – that might challenge established (and protected) elites.
Well at least I am still shockable (so perhaps I am not that old and cynical after all).
A defence of Lenin with the old bullshit that it was naughty Stalin that was the problem, still has the power to shock me (even when I was a school boy I did not fall for that line). Of course the real problem was neither of them – it was Marxism (really any ideology based on hostility to private property in the means of production, distribution and exchange).
We also had “democracy” presented as an end itself – rather than as means to an end – limited government (democracy being a form of government that may be good in some circumstances and bad in others). And the belief that government interventionism could counter (rather than make worse) social problems. With the concentration of wealth being seen as a social problem.
As usual my apologies for any typing mistakes above (Pipers for Pipes and so on), I will not go through them all – after reading stuff I (fasely) thought had died out long ago, I feel dirty and intend to have a bath.
Actually, the only entity which “deserves” to have a say in the matter is the person to whom the money belongs. It is theirs and they can do with it as they will. What anyone else thinks is irrelevant. That some are immoral enough to attempt to separate a person from their possessions through the use of force has less to do with what anyone “deserves” than what people are willing to do to get what they “want”.
Much of the motivation for continuing to work past a certain point is to insure that those you love (and who in many cases have supported you in your efforts) are duly rewarded. My father sacrificed his time with his family in return for the security that his long hours of labor brought to us and his employees. Were there no way to pass along the wealth he was accumulating then the only rational course of action open to him would have been to stop working and spend as extravagantly as possible to avoid having his money arbitrarily seized upon his demise. Oddly enough, I don’t think either his employees or the letter writer quoted above would have thought his money had gone to those more “deserving”…. though for entirely different reasons.
As somebody who lives on a farm that has been in my family for 3-4 generations, I find inheritance taxes to be one of the most transparent thefts imaginable. And I include with them the capital gains taxes that apply at inheritance, which is a situation our lawyer told us to expect. For those of you who don’t know, the capital gains tax is a tax on ‘value’ inflation.
My grandfather immigrated to this country and worked as a child laborer in a furniture factory. He and his also immigrant wife put their life’s work into buying this farm and even so, she had to finish alone (he died at 57). And I am supposed to feel sorry for inheritance tax supporters who think they are entitled put people’s life work to ‘better’ use? Let somebody suggest it to my face sometime and wait for the answer.
Michiganny: why go so far? The 1917 revolution is a perfect example of an implementation of your line of thinking. What Lenin planned and Stalin implemented (or whateverwhoever) was to take the money from those who “created wealth and obtained power with contribution from the state” and give it to people they deemed worthy. Yes, I know, you are not going to take all of their power and money, just tax them – I am feeling much better now. Is it going to be only physicians?
On the point about land, the Edict of Quierzy in 877 A.D. that upheld fiefs being hereditary (rather than the King just having the right to take away land on a whim) was one of the basic building blocks of Western Civiliation (the move from what were once known as the Dark Ages – and a basic difference between the West and Eastern Despotism).
Now Michiganny might say “877 is not from time immemorial, and wicked Kings did grant the land originally” but this misses the basic point I made (although it does confirm my view that if people do not understand for themselves that Lockian style “just acquisition” by a person’s distant forefather is nothing to do with whether it is just to take land from him now, no form of words is going to explain it to them).
At least Michiganny should be against inheritance tax in Iceland (where the present inhabitants can trace their line back to the first farmers of the land – no invasions by new population groups there), but I believe that Michiganny would find some excuse to be in favour of inheritance tax even in the case of Iceland.
As for Edmund Burke, there were efforts to take back land in Britain in his day.
For example, the legal effort to put land of “doubtful title” under the Crown – this did not just effect American colonists, it effected people in England itself (even such important people as the Duke of Portland).
An Act of Parliament was passed (under Burke’s advice) to protect people in England and Wales from such efforts.
“Vassal” do you mean “serf” Michiganny?
There is nothing dishonourable in being a vassal (although the Barclay twins in Sark seem to think there is, perhaps because the man whose vassals they are there has much less money than the Barclay twins do – if only he had put the twins on trial for feudal disloyalty Sark would have been spared moving from a tax code that was one sheet of paper long to one that is the size of a book, and would have been spared having to hire paid government staff and……).
As for Serfs – the de facto status (that of being tied to the land) really goes back before what were once known as the Dark Ages (it was late Roman tax enforcement measure – the Emperor Diocletian, he of price controls and other statism). Although, according the Tacitus, the ancient Germanic tribes had a version of serfdom.
In the English case serfdom was hit a heavy blow by the Black Death and by the various wars between artistocratic factions (serfdom de facto collapsed by the 15th century), although there was a legal discussion as late as 1660 (when it was declared that a person could not hold land in return for compulsory labour services and could not be prevented from leaving a farm if he wished to). However, there were various statutes limiting freedom of movement between parishes – for fear of people of becoming a burden on the Poor Rates (not so much “you can not leave” as “where did you come from, you are not wanted here we do not want to pay for you”).
Slavery in England and Wales is an odd one, in that the Common Law courts found against several times, but it was difficult to get the judgement to “stick” (not a major economic factor but people arriving in England with personal slaves as some sort of weird pet) – till Lord Mansfield’s judgement in 1774. “Slavery” being simply a series of Common Law offences (abduction, false imprisonment, assault,…..).
Still back to Michiganny – you once told me that you did not take sides in the “culture war”, I think it is clear that your claim was not true, and it is also clear what side you are on.
Maybe the death tax is popular in Britain (“popular” in its fullest sense), but I can assure you that it is almost universally loathed Over Here.
It’s detested even more when you discover that for every inheritance tax dollar collected by the State, it costs the State $1.75 to collect it.
The death tax is theft, pure and simple — and the only people who support it are envious socialists and the extreme wealthy whose fortunes are protected by trusts and the like (Ted Kennedy, call your office, you filthy liberal bastard).
What’s really galling is that most fortunes are dissipated within a few generations anyway, without the added iniquity of taxation. Multiple children and financial stupidity see to that — it’s a story common throughout history.
It’s not surprising that socialists look on capital ownership in such a short-sighted manner, however: history is always a malleable commodity in their hands.
It is good to see that Michiganny has taken some time to study these matters. I wrongly thought that he would make a hasty reply.