In Defense of the 100% Solution
In response to a question from a reader, I elaborate herein on a prior statement (see Workers' Bill of Rights) that "inheritance is un-democratic."
So what would you do with your Inheritance is Un-Democratic scenario… Is Life Insurance part of inheritance? If so, say my wife and I get run over tomorrow…. So do you just took my kids means of survival away? Does my designated guardian now have to use his own funds to feed, school them?
I haven’t worked everything out yet. And Barak, Hillary, Nancy Pelosi, etc. haven't exactly pressed for details.
But basically, in the premature parental death case, I don’t see that necessarily as an inheritance issue – I see that as child support in advent of parent(s)’ death – depending on the amount at stake I suppose.
Also, I don’t know if you know this but in that hypothetical case, your children receive your (or your wife’s) social security benefits until age 18 or age 22 (maybe it's 24 or 25) if attending university.
But the reality is that my 100% inheritance tax premise is designed to target just one class of inheritance – the kind that allows an imbecile like Shrub to become President of the United States – when I don't see him elected dog catcher -- if his daddy isn't George Herbert Walker Bush or his granddaddy isn't Prescott Bush!
Note that Bill Gates and Warren Buffet are doing the right thing in my view – both for their chidren and society at large (not just the U.S.). And I think that kind of (foundation, donation, public trust, etc.) handling of vast wealth should simply be codified – i.e. made law - it's as simple as that.
In my world view, Sam Wall’s kids don’t deserve his money – except perhaps what they made on their own building up the Wal Mart empire. But then imagine the advantages they started with? I mean, who screws that pooch – no one.
And Johnson and Johnson (J&J), for example, was once apparently a family business too – and old man Johnson was smart enough to prevent his kids (and their kids) from getting into – by that time he’d found people 10x smarter than he to run it. Why risk having his heirs in there?
So as I said, I just think we need to get rid of irrevocable title – i.e. implement a new, Capitalistic, moral equivalent of the Magna Carta to eliminate the unfair advantage of family wealth as irrevocable title. It seems only fair. Irrevocable title is not Democratic. And I was taught to believe my country is a Democracy. But today I find that my Constitutional right to petition my government has been put up for auction. And I can’t afford the price. So I guess that means, by Shrub calculus, that I deserve to be a 2nd, 3rd, or 4th class citizen. And Shrub deserves to be President -- Reagan/Bush-onomics at its best!
Another issue that critics of 100% inheritance tax often raise involves family land holdings (e.g. ranches and family farms). To these heirs, I ask -- did you settle the land? Did you defend it from floods, fires and crooks. If not, then I don’t see what you did to deserve inheriting it? I could see room for exceptions – e.g. if you hold the land for subsequent generations -- as a cultural and environmental trust as most ranchers do -- then I could see continued familial transfer. But if you try and profit from the efforts of your progenitors -- e.g. by selling off the land to developers -- then the profit is not yours to keep and should be either destroyed (deflationary) or put toward the benefit of the larger society.
Transfer of wealth and property is simply un-democratic and this inequity has created too much societal inequity while solving no societal problems.
So… go ahead and have your Capitalism – out-smart, out-work, get lucky, risk your soul for your ambition, etc. That's fine. I have yet to find another system superior to laissez faire Capitalism that can foster innovation – certainly not top-down Communism or Socialism.
But look around, obviously Capitalism has its flaws too -- and irrevocable title is arguably the greatest I have seen and experienced as a U.S. citizen.
In case you don't know, my idea is actually based on a concept introduced, as I understand, by the poet Ezra Pound. He espoused a concept he termed “expiring capital.”
Thus my idea is not new. I have simply extended the period of capital expiration until death – but not beyond -- to heirs.
It's a great idea if you consider it objectively. It helps to fix so many problems (government/infrastructure funding, probate, inflation) while it promotes fairness -- all men created equal...
Obviously no system is perfect, but expiring capital is a better idea than inheritance leading to a Capitalist form of irrevocable title. Greed may be good – but it needs to be regulated like every other potentially damaging behavior in a complex and interrelated society. After all, perhaps I'd like to have sex with 11 year old girls (OK, it’s an extreme, hypothetical example – but demonstrates my point) -- but oh, wait, there are laws designed to prevent that sort of behavior – because preventing adults from having sex with children leads to a more moral and less exploitive society.
So, finally, it’s time to view the direct transfer of millions and billions of dollars from parents to children – i.e. irrevocable economic title - to the exclusion, exploitation and net detriment of the rest of disinherited society – in that same “there ought to be a law against that” light.