Presuming you’re not trolling: take the implication of what you’re saying to it’s natural conclusion (no inheritance tax, no property tax, etc) and explain to me how we don’t end up with a feudal society in a generation or four?
In my view, there should be some correlation between hard work, smarts and financial outcome that isn’t entirely determined at birth.
A rhetorical question isn't a troll. If someone is a troll, just flag them.
> explain to me how we don’t end up with a feudal society in a generation or four
As wealthy people die, they give their money to foundations and split it among their progeny and spouses. Some of them, it turns out, aren't great with money. The richest of the rich are no longer Carnegie, Rockefeller, or Weyerhäuser. A few generations out and the fortune is already spreading out naturally. Sure, some grandchildren are regional socialites and minor celebrities, but we're not exactly worried about which politicians Paris Hilton is palling around with.
I guess I don’t understand why smart people, like you seem to be, would want to design a system that inherently rewards nepotism instead of one that rewards innovation in the present.
Your system of “natural” fortune spreading was the default for all time until the modern welfare state came along. That’s what you want to return to? Hope that stupidity somehow spreads wealth the best?
Some of these people would've called it quits a long time ago though, if not for the ability of their offspring to have it (much) better than they do. Nothing wrong with that.
Some people are born with above average intelligence, or above average physical skills. Nothing wrong with that either.
Why shouldn't people be allowed to inherit significant fortunes?
Because fortune on it's own does nothing.
(As opposed to investment in manufacturing or research.) The result is stagflation and stagnation in long term.
Generally the tax is not supposed to be on inheritance but on unreasonably frozen money. Inheritance tax is a work around.
Skills when applied are supposed to be net positive for society.
Additionally with money comes influence, media and politics. Stagnation in those areas is risky too.
Where are the Scrooge McDuck money bins? The money is invested. Or it's spent and someone else has it.
Inheritance tax is a double tax. The money was already subject to income tax, capital gains, property tax, sales tax, etc. If the problem is that capital earnings accumulate faster than labor earnings, then we should just address that problem.
Property isn't about what it does for the rest of society. Property is a human right. Taxes generally are on voluntary actions for a reason. You choose to purchase something, own taxable property, emit carbon, etc. People don't choose to die, so it's an involuntary tax, something we should think about.
Lots of people don't care about the ethical implications for personal reasons, I guess, and that's their prerogative. But there's no moral high ground on not caring about the ethics of property rights.
There are plenty of heirs that continue to participate in business. Taking their money away isn't going change much, aside from taking their money away.
You act as if all inherited wealth is just sitting in bank accounts. Some is, some isn't, some heirs are active in and good at business, others aren't.
It is not doing as much as it should. What it does is bring profits to financiers who control it.
This as opposed to direct investment (VC or starting new enterprises). even having a controlling share in a company is not exactly the same. Working on a business is not enough of most of the money gets frozen in fixed assets or rented away to bankers.
Honestly, VC is probably one of the least attractive investment opportunities around. It's a crapshoot, very high risk, and the returns (if you even get any) are low.
It's a lot easier making money through Private Equity deals.
If I had $100m, I wouldn't be putting it in a VC fund. Not saying I wouldn't make direct investments, but I would only make those on the assumption the money is gone.
I don't think anyone makes investments in the stock market and private equity on the assumption the money is gone.
Exactly. Everyone wants to get rich at little risk. This means putting money into blue chips with their huge inefficient bureaucracies and fixed assets.
Moreover the real unasked question is, how the company benefits the society if at all.
Capitalism really promotes amoral and immoral investing. Biggest returns for lowest cost and risk to investors.
The democratic urge to use the state for preventing the transfer of wealth between generation is sickening. It shows neither a respect for property nor liberty.
In my view, there should be some correlation between hard work, smarts and financial outcome that isn’t entirely determined at birth.