The 100% inheritance tax

Professional contrarian Megan McArdle makes the case– and its a pretty good one– for a 100% inheritance tax:

To wit: the living person was entitled to dispose of their assets, but they are no longer living, and are not entitled to anything except an undisturbed grave.  Since they are out of the picture, we must look to the heirs.
Do they deserve to inherit?  By virtue of what? Being born?  Having parents?  Maybe they put up with their parents, and their parents were difficult, even terrible.  But if the parents wanted to pay someone to put up with them, they could have done so when they were alive.  And no matter how awful your parents were, “putting up with them” doesn’t seem so terrible that it should entitle you to all their stuff, tax free.  Even if your mom is Joan Crawford, I can pretty much guarantee that foster care or institutionalization would have been worse.  Why not give the stuff to those kids?  Because they were unlucky enough to be forced to endure their abuse from poor people?
Inheritance not only hands people valuable income in return for something we don’t really want to further reward–being born lucky–but also, in doing so, it entrenches the least attractive feature of our economy: the fact that people who are born to affluent parents are much more likely to themselves be affluent than children born to the less well-heeled.  Lack of economic mobility is generally regarded as a bad thing that we should combat.
There’s much more and she talks about what sort of exemptions we’d want, the possible implications, etc.  It’s never going to happen, but I found it a really interesting thought exercise.   Especially, since I think that as a society we way underappreciate the lack of social mobility and how much of our life’s successes and failures are tied into the accidents of our birth.

About Steve Greene
Professor of Political Science at NC State

2 Responses to The 1002 inheritance tax

  1. itchy says:

    I’ve long said that about beneficiaries who complain about the “death tax.” It’s not a tax you you; it’s free money. If you don’t want any of it taxed, put it all in the coffin.

  2. itchy says:

    Easy for me to say since I’ll be getting no inheritance. But it’s obnoxious how quickly members of the party of “free market, earn your own keep, anti-socialism” complain when they get less than 100% of a handout they didn’t earn.

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