Both directly worse, in that the confiscation of the wealth is itself an abuse, and indirectly worse in that it would have negative side effects such as a people making greater effort to find ways to avoid taxes rather then invest the money efficiently.
Well confiscation of wealth may be an abuse, but if the system was known (you can't pass on more than you create) and accepted, in fact promoted by the vast majority (of course the non-wealthy are going to like the idea), it is no longer an abuse; rather, it is giving the people what they want. The son of an inheritor of great wealth who created nothing with that doesn't get the wealth - that's not all that controversial.
Inheritors that were investing the wealth efficiently wouldn't have a problem since, if they inherit $100 million and are investing it "efficiently", they are probably going to be able to produce $100 million in their lifetime, and pass on to their heirs what they produced. It's the lazy ones that don't produce anything with the wealth - they just live a jetset life - that don't get to pass it on to their kids. Remember, the idea is that an inheritor of wealth can only pass on at the reasonable tax rate the amount that he creates (something like what he declares as his income in his lifetime statements).
In fact this would encourage the very wealthy to pay taxes so that they can pass their wealth on to their kids. If they hide their tax obligation, they don't earn the "credits" that determine what amount they can pass on to their own children at the current tax rate.
As for people avoiding taxes, that happens anyway.
The thing that comes to mind is Gate's children. They are going to inherit perhaps $40B in MSFT stock. If they can't create $40B in their lifetime with that inheritance, their kids don't get it. It may be a bit unfair for their kids, but what have they done to deserve the money other than being born? In fact it doesn't really sound all that unfair to Gates' kids kids. If Gates kids don't do anything worthwhile with their inherited wealth, why do Gates kids kids deserve to enter the world with $$Billions? Just because?
I don't have ANY evidence to back it up, but I would imagine the existence of HUGE outlyers like Gates' kids kids in the economic system may be hurting the system, and at the very least it seems quite unfair for some children to be born multi-billionaires in a land where all men are created equal.
I mean come on - $5 million seems like plenty to be born with! |
