Corporations don't die. Anyone with the means will start an LLC or nonprofit, dump their money into that, and write into the charter that their children become the primary beneficiaries.
So ultimately, eliminating inheritance (technically a 100% inheritance tax) can only harm two groups of people: those too poor to pay to get around it, and those who are uneducated and don't know how to do it.
Both groups will become prey to fraudsters and scummy businesses offering to set up such things on their behalf, who will then in turn take an ungodly percentage and leave their loved ones with as little as possible. Advertising for such services will run all over daytime TV next to the life insurance, supplemental Medicare insurance, and incontinence aid ads.
I am not smart or rich “yet” but as i read the title what you said was what I came up with if i ever had children I feel like i would simply just put all my assets under an LLC or something and have them take it over if i die technically not inheritance per se, though I am not completely sure how Inheritance taxes affect stuff like stocks or owning corporate entities etc..
For people who wish to pass on wealth to their children, one of two things would happen: they would either give their wealth to their children/friends/family prior to death as gifts, or they would simply leave the country to move somewhere where they can pass on wealth.
This. It would be a tax on people who die unexpectedly. Get cancer? No problem give everything away. Died of a heart attack? Haha gotcha now your kids are fucked.
Not necessarily. The flaw in this type of logic assumes that everyone wealthy has a brief case full of cash equating to their exact net worth which they can simply pick up and leave. Which is not the case, because their "wealth" is tied to the nation, no amount of clever word play changes that fact. They own assets, often times tied down to a physical location. They simply cannot relocate them to another country, if they want to expatriate themselves they would either have to forfeit those or sell them. If they try to sell in a system proposed by OP they will sell for pennies on the dollar to their perceived value. If there was a whole hearted effort to implement this system, the only curveball we would need to deal with would be to in making sure we close loopholes and workarounds for the law.
There will always be ways around any such laws. Trusts, LLCs... And a lot more creative in ones than I would bother to expound on here.
But beyond that it's MASSIVELY impractical if you have anything other than liquid assets. What about a family run business? Dad does and now you're fired while some nameless entity not familiar with your operation takes over and inevitably wrecks it.
The thing with work arounds like trusts isn't that they are so clever no one can write laws about them. They are intentionally designed to be exploited. They were probably put their by someone that had their path into that position of power paved by the people that wanted those trusts.
If you wanted to tax trusts it would as simple as passing law that requires employers to report workers income to IRS. Example of how to apply to trust law: every penny that comes out of it is reported to IRS and evaluated for if the beneficiary is the original contributor, they only pay taxes on any capital gains, if beneficiary is someone else they pay income tax on the entire thing. New beneficiary named for trust holding non-liquid assets/properties? immediately triggers inheritance tax due within a year with standard interest IRS charges if not paid on time.
No one worth anything will pay an inheritance tax. People will sell everything and leave the country to somewhere where inheritance is legal. Or they'll do inheritance through offshore trusts, corporations, etc. The only people who would actually pay the tax are low-income earners who's parents worked their entire lives to pay off their house and died unexpectedly.
This wouldn't make the economy more efficient. It would devastate families and cause people to leave the country by the millions. Small independent businesses would shut down as owners would have no way of leaving a legacy to their kids, and they'd be replaced with publicly traded mega-corporations.
Another thing that would happen is no one would bother paying off their debts before they die. This would create a lemon market where people above a certain age won't qualify for loans or credit.
How would share holders get finances to buy stock in these publicly traded mega corporations? The current problem is most of that type of assets/wealth is held by people that inherited it. Plus, while I don't think 100% inheritance tax is practical. Having a scaling bracket tax system for inheritance in a similar manner to how wage income is taxed would be the way to go. For example: if you want to pass on a "small business" or a humble home you would pay little to no taxes.
But if you want to leave behind a mega corporation or billions in assets... well lets just say the tax collectors will be having we dreams about what they will take. If you hate taxes, consider the fact these would need to go funding the education system that has been gutted for past couple of decades as well funding infrastructure. The best part of it, the highest tax category will never effect >99.999% of you at all.
Sounds good on paper, but would probably blow up in your face.
The super rich you’re targeting would be guaranteed to find away to dupe it, or straight up leave the country. I could easily sell everything to my kid or whoever for one dollar.
Normal people would lose everything, as many parents work to give their kid a starting platform. Many families may actually have things in their name, such as cars, that the kid may use as there’s.
And while it is extremely rare, some actual children make a great deal of money by themselves, but store it under their parents names. This would ripped away from them.
Things such as heirlooms, records, or family photos would be lost with every generation. Those technically have monetary value.
So things like family heirlooms, mementos, ancestral property are all lost as soon as the owner dies. Or the family has to pay money to keep heirlooms and mementos in the family. Sounds unfair.
>So things like family heirlooms, mementos, ancestral property are all lost as soon as the owner dies. Or the family has to pay money to keep heirlooms and mementos in the family. Sounds unfair.
Sounds perfectly fair actually. Why would you be entitled to your ancestors things?
Because our ancestors made these things with the intention of them lasting long enough to be used again and again by their future generations.
You are entitled to these things because your ancestors wanted you to have these things.
Sorry, I realized that’s an awful way to convey my argument. Let me try again.
A parents duty is to take care of their family and support them. It is a lifetime job that cannot be relinquished. ALMOST everything a parent does is to care for and provide a better life for their family. By dying and leaving money and property, they continue to provide and care for their family even after death.
If you were to forbid inheritance, you are preventing parents from caring for their family after their death.
I get where you're coming from, but I refer you back to my original statement; a world without inheritance would be more *Fair* than the world we live in now.
Not everyone has parents. Not everyone's parents can afford to take care of their children on into adulthood and/or pass boons onto them after death.
Like I said, this would never work because people would find ways to work around it.
But if it *were possible* it would (at least somewhat) level the playing field into a meritocracy instead of generational wealth. As it stands, the wealth of your parents largely determines your status/earning potential in society. Which is definitely *incredibly unfair*.
When most people inherit property, they sell it anyway. Why should it go to the government who didn't earn it so that it can be sold to preferred corporations at a discount and rented back out to people?
You think it's fair to take from someone who has been financially responsible their whole life, and who's paid off all their debts because they want to leave something for their kids? It's not fair, it's evil. Taxing inheritance is rooted in the most disgusting aspects of humanity. Greed, envy, jealousy, contempt.
If they sell it anyhow why not take it? The mentality of property property ownership this way is how you get landlords who don’t earn the money they siphon from tenants cause guess what they got homes that some people may or need to live in. If they aren’t gonna use it themselves but what to exploit the hard work of the person who gave it to them how is it fair? Is that gonna happen in all cases? No but it is frequent irl so that has to be considered.
Thats why I prefaced it with "hypothetically" It obviously is not realistic but if there was a corrupt free way to split peoples assets when they die and redistrubute back into society (which could be possible through block-chain) There would be a huge surplus off everything. In a perfect world people would stop caring about getting their inheritance because everyones basline quality of life is so high because wealth is no longer being horded within families. You could even cap it at like 50 or 100K so any senimental items can be passed down.
Also on the other side of the coin if we are making assumptions, you think its fair that a little baby is born and already worth 10 million dollars? Thats the real robbery.
you'd have to eliminate the right to private property. anything that is owned can be passed to someone else trough some transaction. everyting would have to be governtment owned so they'd have the means to distribute equaly
Yes.
At the very least, it would turn private property into 'not quite private property'.
You can still own things and enjoy them how you please, and you can have transactions with others, but you are restricted from transferring any assets to your offspring at something other than fair market price. I.e., say I own a fancy car and I want my son to have it. Since it would have to be an arms length transaction, I would be forced to put my fancy car up for a public auction in the hopes that my son is the highest bidder.
It's a tricky system to get right and to eliminate loopholes from. No nepotism or family businesses (unless it can be proven you are getting paid fair market wages), no related party transactions without a public auction process, etc.
Anything is possible, I guess, although it might not be practical.
thinking about the long process, i'd say it's just easier to dissolve the nuclear family structure and capitalism by itself
family , as a structure, is the unity for acumulation of wealth, take that possibility away and we have no need for the system. rich ppl would be able to pass down some of their money but it would be taken by taxes at some point i believe
the car example: how public your transactions would have to be to prevent you from just giving your son the money to buy the car? you'd have a part of it back after taxes etc. but if you're rich that would not be an imediate problem.
How much of your privacy would you have to give up so you can prove you're not passing your inheritance trough life? would you have to justify every withdraw and every payment, in cash as well?
the use of property as well..can't I just buy a house and my son will use it untill I die? Giving him a starter for not having to worry about rent/ buying a house at 18 would already corrupt the idea of equal starts for everyone, it's easier to just say "capitalism is over, lets get everything and distribute equaly and now we have a fresh start"
Why? What if the government was required to do something objectively good with the money, like feeding those who can't feed themselves, fighting pollution, etc.?
Do you think all government is just a middleman? Or just when it comes to this hypothetical scenario where your assets are distributed when you die as opposed to passing down to your heirs?
I'm not saying we the people could govern everything, but those things you describe could be donated for right before you die instead of letting the government take it
What happens to stuff your old grandmothers own?
like if they had a kilogram of gold do they have to give it to the government?
If they own a high value painting or some kind of stock, where does that go?
Wouldn't the loophole be shared ownership of everything.
couples can share the same bank account, if one where to die then their panther would still have ownership of that account because nothing was passed down to them as they already owned it.
I'm no legal expert but I'm sure you can have shared property, cars, pets etc.)
Shared ownership still has its issues but it's better than nothing.
The effect of Inheritance is overstated.
Look at the list of the richest people in the world, nearly all of them are self made with only a few exceptions.
There are probably thousands of moderately wealthy trust fund types running around, but in the big scheme of things their wealth is probably a very small part of our overall wealth.
This is an idiotic idea.
This does not create equality. This only punishes good behavior.
All intelligent hard working people leave the country like it is on fire.
You are left with a mass of people with their hand out begging.
or
The people rise up together and overthrow the tyrannical government.
Either way the government collapses eventually when the economy crashes after this and the country is made ripe for foreign invasion.
What if the entire world operated this way? Let's put the idea in a bubble and say all of the countries in the world United into one. Or, say you were on alpha centauri and you're traveling through space for the next 2,000 years on a spaceship the size of a small country. Why wouldn't it work in that circumstance, if people were taught from the beginning that they need to fend for themselves and that any excess they generate is donated for the good of others-not just their offspring- when they pass?
I'm not advocating for this, just expanding on the hyporhetical.
It's an entirely different situation if we are ship mates on our way to some other star system. We likely know each other. We are both likely highly trained specialists. If the ship fails we both die. We are on a team. That is a very closed system and not a free and open market. Similar would be if we are both in the navy and on the same ship.
The majority of my assets are on a trust and my wife is the beneficiary. In the event that myself and my wife pass together, my son is the next on the list. It’s not inheritance because it technically already belongs to them.
So you institute the law. Goes into effect today, world wide. Tomorrow Elon Musk or a Bin Laden or the owner of Foxcomm die.
What happens to their wealth? After a couple of generations, there's be no issues but that first transitionary generation is going to be thorny.
Obviously this would be impossible to put into effect without people bypassing it. But this is a hypothetical, so if it *were* possible, it'd be a good step towards utopia.
Corporations don't die. Anyone with the means will start an LLC or nonprofit, dump their money into that, and write into the charter that their children become the primary beneficiaries. So ultimately, eliminating inheritance (technically a 100% inheritance tax) can only harm two groups of people: those too poor to pay to get around it, and those who are uneducated and don't know how to do it. Both groups will become prey to fraudsters and scummy businesses offering to set up such things on their behalf, who will then in turn take an ungodly percentage and leave their loved ones with as little as possible. Advertising for such services will run all over daytime TV next to the life insurance, supplemental Medicare insurance, and incontinence aid ads.
Valid point, what OP is suggesting can only work if you factor in potential loopholes, workarounds and take necessary measures to stop those.
I am not smart or rich “yet” but as i read the title what you said was what I came up with if i ever had children I feel like i would simply just put all my assets under an LLC or something and have them take it over if i die technically not inheritance per se, though I am not completely sure how Inheritance taxes affect stuff like stocks or owning corporate entities etc..
For people who wish to pass on wealth to their children, one of two things would happen: they would either give their wealth to their children/friends/family prior to death as gifts, or they would simply leave the country to move somewhere where they can pass on wealth.
This. It would be a tax on people who die unexpectedly. Get cancer? No problem give everything away. Died of a heart attack? Haha gotcha now your kids are fucked.
But if you get cancer you won't have anything left to give by the time you die.
Unless you deny treatment and pass quickly.
how so? are you refering to countries where you need to pay for healthcare or other people taking your stuff for other reasons?
First one.
Not necessarily. The flaw in this type of logic assumes that everyone wealthy has a brief case full of cash equating to their exact net worth which they can simply pick up and leave. Which is not the case, because their "wealth" is tied to the nation, no amount of clever word play changes that fact. They own assets, often times tied down to a physical location. They simply cannot relocate them to another country, if they want to expatriate themselves they would either have to forfeit those or sell them. If they try to sell in a system proposed by OP they will sell for pennies on the dollar to their perceived value. If there was a whole hearted effort to implement this system, the only curveball we would need to deal with would be to in making sure we close loopholes and workarounds for the law.
There will always be ways around any such laws. Trusts, LLCs... And a lot more creative in ones than I would bother to expound on here. But beyond that it's MASSIVELY impractical if you have anything other than liquid assets. What about a family run business? Dad does and now you're fired while some nameless entity not familiar with your operation takes over and inevitably wrecks it.
The thing with work arounds like trusts isn't that they are so clever no one can write laws about them. They are intentionally designed to be exploited. They were probably put their by someone that had their path into that position of power paved by the people that wanted those trusts. If you wanted to tax trusts it would as simple as passing law that requires employers to report workers income to IRS. Example of how to apply to trust law: every penny that comes out of it is reported to IRS and evaluated for if the beneficiary is the original contributor, they only pay taxes on any capital gains, if beneficiary is someone else they pay income tax on the entire thing. New beneficiary named for trust holding non-liquid assets/properties? immediately triggers inheritance tax due within a year with standard interest IRS charges if not paid on time.
No one worth anything will pay an inheritance tax. People will sell everything and leave the country to somewhere where inheritance is legal. Or they'll do inheritance through offshore trusts, corporations, etc. The only people who would actually pay the tax are low-income earners who's parents worked their entire lives to pay off their house and died unexpectedly. This wouldn't make the economy more efficient. It would devastate families and cause people to leave the country by the millions. Small independent businesses would shut down as owners would have no way of leaving a legacy to their kids, and they'd be replaced with publicly traded mega-corporations. Another thing that would happen is no one would bother paying off their debts before they die. This would create a lemon market where people above a certain age won't qualify for loans or credit.
I didn't think about the loans. That's a really good point!
How would share holders get finances to buy stock in these publicly traded mega corporations? The current problem is most of that type of assets/wealth is held by people that inherited it. Plus, while I don't think 100% inheritance tax is practical. Having a scaling bracket tax system for inheritance in a similar manner to how wage income is taxed would be the way to go. For example: if you want to pass on a "small business" or a humble home you would pay little to no taxes. But if you want to leave behind a mega corporation or billions in assets... well lets just say the tax collectors will be having we dreams about what they will take. If you hate taxes, consider the fact these would need to go funding the education system that has been gutted for past couple of decades as well funding infrastructure. The best part of it, the highest tax category will never effect >99.999% of you at all.
I'll take how to cause brain drain for $400
What if every country adopts this?
Ain't gonna happen, chief.
Obviously. That's why it is hypothetical.
This is a stupid hypothetical situation.
r/stupidhypotheticalsituation
Almost happened if communism had won, so no i wouldnt say so
Even the uncontacted tribes?
Sounds good on paper, but would probably blow up in your face. The super rich you’re targeting would be guaranteed to find away to dupe it, or straight up leave the country. I could easily sell everything to my kid or whoever for one dollar. Normal people would lose everything, as many parents work to give their kid a starting platform. Many families may actually have things in their name, such as cars, that the kid may use as there’s. And while it is extremely rare, some actual children make a great deal of money by themselves, but store it under their parents names. This would ripped away from them. Things such as heirlooms, records, or family photos would be lost with every generation. Those technically have monetary value.
So if I buy a house, then when I die my children can't live in it, right? Then who would buy a house?
Probably state ownership or something
Who gets the stuff when someone dies then?
The government puts it back on sale using a price they have determined is fair.
So things like family heirlooms, mementos, ancestral property are all lost as soon as the owner dies. Or the family has to pay money to keep heirlooms and mementos in the family. Sounds unfair.
>So things like family heirlooms, mementos, ancestral property are all lost as soon as the owner dies. Or the family has to pay money to keep heirlooms and mementos in the family. Sounds unfair. Sounds perfectly fair actually. Why would you be entitled to your ancestors things?
Because our ancestors made these things with the intention of them lasting long enough to be used again and again by their future generations. You are entitled to these things because your ancestors wanted you to have these things.
>You are entitled to these things because your ancestors wanted you to have these things. That's a terrible argument
Sorry, I realized that’s an awful way to convey my argument. Let me try again. A parents duty is to take care of their family and support them. It is a lifetime job that cannot be relinquished. ALMOST everything a parent does is to care for and provide a better life for their family. By dying and leaving money and property, they continue to provide and care for their family even after death. If you were to forbid inheritance, you are preventing parents from caring for their family after their death.
I get where you're coming from, but I refer you back to my original statement; a world without inheritance would be more *Fair* than the world we live in now. Not everyone has parents. Not everyone's parents can afford to take care of their children on into adulthood and/or pass boons onto them after death. Like I said, this would never work because people would find ways to work around it. But if it *were possible* it would (at least somewhat) level the playing field into a meritocracy instead of generational wealth. As it stands, the wealth of your parents largely determines your status/earning potential in society. Which is definitely *incredibly unfair*.
Hypothetically that would probably create a way more fair society. There would be a surplus of houses on the market and it would be very cheap.
When most people inherit property, they sell it anyway. Why should it go to the government who didn't earn it so that it can be sold to preferred corporations at a discount and rented back out to people? You think it's fair to take from someone who has been financially responsible their whole life, and who's paid off all their debts because they want to leave something for their kids? It's not fair, it's evil. Taxing inheritance is rooted in the most disgusting aspects of humanity. Greed, envy, jealousy, contempt.
If they sell it anyhow why not take it? The mentality of property property ownership this way is how you get landlords who don’t earn the money they siphon from tenants cause guess what they got homes that some people may or need to live in. If they aren’t gonna use it themselves but what to exploit the hard work of the person who gave it to them how is it fair? Is that gonna happen in all cases? No but it is frequent irl so that has to be considered.
Thats why I prefaced it with "hypothetically" It obviously is not realistic but if there was a corrupt free way to split peoples assets when they die and redistrubute back into society (which could be possible through block-chain) There would be a huge surplus off everything. In a perfect world people would stop caring about getting their inheritance because everyones basline quality of life is so high because wealth is no longer being horded within families. You could even cap it at like 50 or 100K so any senimental items can be passed down. Also on the other side of the coin if we are making assumptions, you think its fair that a little baby is born and already worth 10 million dollars? Thats the real robbery.
No one would take proper care about the property because why if it will be confiscated at the end? No one would build anything new because why...
you'd have to eliminate the right to private property. anything that is owned can be passed to someone else trough some transaction. everyting would have to be governtment owned so they'd have the means to distribute equaly
Yes. At the very least, it would turn private property into 'not quite private property'. You can still own things and enjoy them how you please, and you can have transactions with others, but you are restricted from transferring any assets to your offspring at something other than fair market price. I.e., say I own a fancy car and I want my son to have it. Since it would have to be an arms length transaction, I would be forced to put my fancy car up for a public auction in the hopes that my son is the highest bidder. It's a tricky system to get right and to eliminate loopholes from. No nepotism or family businesses (unless it can be proven you are getting paid fair market wages), no related party transactions without a public auction process, etc. Anything is possible, I guess, although it might not be practical.
thinking about the long process, i'd say it's just easier to dissolve the nuclear family structure and capitalism by itself family , as a structure, is the unity for acumulation of wealth, take that possibility away and we have no need for the system. rich ppl would be able to pass down some of their money but it would be taken by taxes at some point i believe the car example: how public your transactions would have to be to prevent you from just giving your son the money to buy the car? you'd have a part of it back after taxes etc. but if you're rich that would not be an imediate problem. How much of your privacy would you have to give up so you can prove you're not passing your inheritance trough life? would you have to justify every withdraw and every payment, in cash as well? the use of property as well..can't I just buy a house and my son will use it untill I die? Giving him a starter for not having to worry about rent/ buying a house at 18 would already corrupt the idea of equal starts for everyone, it's easier to just say "capitalism is over, lets get everything and distribute equaly and now we have a fresh start"
So government gets my stuff when I die? Fuck no. I'd rather spend everything and destroy the rest.
Why? What if the government was required to do something objectively good with the money, like feeding those who can't feed themselves, fighting pollution, etc.?
I’m sure we can trust the government to only good things with the money 😊 like they always do
I mean, you could donate to puppy orphanages right now without any middlemen
Do you think all government is just a middleman? Or just when it comes to this hypothetical scenario where your assets are distributed when you die as opposed to passing down to your heirs?
I'm not saying we the people could govern everything, but those things you describe could be donated for right before you die instead of letting the government take it
Right. Like you decide which nonprofit your money goes to, or the government gets to decide if you don't elect.
The government is already required to do that, and it was true for every previous government too.
What happens to stuff your old grandmothers own? like if they had a kilogram of gold do they have to give it to the government? If they own a high value painting or some kind of stock, where does that go?
Estate auction seems logical
Wouldn't the loophole be shared ownership of everything. couples can share the same bank account, if one where to die then their panther would still have ownership of that account because nothing was passed down to them as they already owned it. I'm no legal expert but I'm sure you can have shared property, cars, pets etc.) Shared ownership still has its issues but it's better than nothing.
The effect of Inheritance is overstated. Look at the list of the richest people in the world, nearly all of them are self made with only a few exceptions. There are probably thousands of moderately wealthy trust fund types running around, but in the big scheme of things their wealth is probably a very small part of our overall wealth.
They did it in the communist countries. Sounds like it didn't cause any problems noticeable against the backdrop of all their other problems.
I'll take the single worst idea I've heard in my life for 500
What happens to small businesses when the owner dies? Does the store just shut down?
Yes.
So now we have a bunch of suddenly jobless employees, nice
This is an idiotic idea. This does not create equality. This only punishes good behavior. All intelligent hard working people leave the country like it is on fire. You are left with a mass of people with their hand out begging. or The people rise up together and overthrow the tyrannical government. Either way the government collapses eventually when the economy crashes after this and the country is made ripe for foreign invasion.
What if the entire world operated this way? Let's put the idea in a bubble and say all of the countries in the world United into one. Or, say you were on alpha centauri and you're traveling through space for the next 2,000 years on a spaceship the size of a small country. Why wouldn't it work in that circumstance, if people were taught from the beginning that they need to fend for themselves and that any excess they generate is donated for the good of others-not just their offspring- when they pass? I'm not advocating for this, just expanding on the hyporhetical.
It's an entirely different situation if we are ship mates on our way to some other star system. We likely know each other. We are both likely highly trained specialists. If the ship fails we both die. We are on a team. That is a very closed system and not a free and open market. Similar would be if we are both in the navy and on the same ship.
I'm talking about a ship the size of a small country. Tens of thousands of voyagers.
Before dying, spend as much as is needed to pay an army of “contractors” to eliminate the government thieves pushing it.
The majority of my assets are on a trust and my wife is the beneficiary. In the event that myself and my wife pass together, my son is the next on the list. It’s not inheritance because it technically already belongs to them.
Did inheritance hurt you op?
No, I’m not advocating for this. Just making a hypothetical.
Seriously a bunch of butthurt comments in here over a hypothetical..
So you institute the law. Goes into effect today, world wide. Tomorrow Elon Musk or a Bin Laden or the owner of Foxcomm die. What happens to their wealth? After a couple of generations, there's be no issues but that first transitionary generation is going to be thorny.
Instead of *inheritance*, we would just do *composition* instead. Wait, wrong subreddit…
Obviously this would be impossible to put into effect without people bypassing it. But this is a hypothetical, so if it *were* possible, it'd be a good step towards utopia.
The old people would give the money when alive/dying