# The best division of wealth in a society **URL:** \ **Category:** Great Debates\ **Created:** [December 11, 2017, 1:55pm UTC](https://boards.straightdope.com/t/the-best-division-of-wealth-in-a-society/804193 "2017-12-11T13:55:41Z")\ **Posts on this page:** 20\ **Page:** 4
**Author:** ![puddleglum](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/puddleglum/32/137_2.png) [@puddleglum](https://boards.straightdope.com/u/puddleglum)\ **Post date:** [December 13, 2017, 3:28pm UTC](https://boards.straightdope.com/t/the-best-division-of-wealth-in-a-society/804193/61 "2017-12-13T15:28:25Z")
> [@Damuri\_Ajashi](#): > > America taxes its citizen and its residents on their worldwide income. And the estate tax is levied against all property they own. > > Now that I think about it, tax rates above 50% are too easy to get around so lets cap it at 50% The point is that even the super rich like the Rolling Stones are willing to go to great lengths such as moving to another country to pay less tax. If they are willing to move possibly they would be willing to work less as well. There are probably plenty of inframarginal cases but that does not mean we should stop thinking on the margin. On the margin the higher the estate tax the more people will do to get around it. There is no way to know if 50% is an acceptable rate so that enough rich people do not alter their behavior to get around it. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [December 13, 2017, 3:31pm UTC](https://boards.straightdope.com/t/the-best-division-of-wealth-in-a-society/804193/62 "2017-12-13T15:31:03Z")
> [@WillFarnaby](#): > > Wealth has traditionally been managed and passed down through the family. If a successful person passes down wealth to an irresponsible steward who doesn’t satisfy consumer desires, that person will find that his or her wealth dwindles correspondingly. So, once you get past a certain level of wealth, the descendants aren’t being stewards, they are the leisure class, they don’t have to satisfy anyone or anything. I mean we’re talking about estates in excess of $10 million/couple at the low end. Their assets are managed. ---
**Author:** ![puddleglum](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/puddleglum/32/137_2.png) [@puddleglum](https://boards.straightdope.com/u/puddleglum)\ **Post date:** [December 13, 2017, 3:35pm UTC](https://boards.straightdope.com/t/the-best-division-of-wealth-in-a-society/804193/63 "2017-12-13T15:35:58Z")
> [@Damuri\_Ajashi](#): > > OK, so what value is there to society in giving billions of dollars to Paris Hilton and her crowd that exceeds the social value of food stamps? Society is not giving billions of dollars to Paris Hilton. Her grandfather would have been the one to give her any money. Since it is his money, it is his value that must be taken into account. ---
**Author:** ![WillFarnaby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/willfarnaby/32/514_2.png) [@WillFarnaby](https://boards.straightdope.com/u/WillFarnaby)\ **Post date:** [December 13, 2017, 4:02pm UTC](https://boards.straightdope.com/t/the-best-division-of-wealth-in-a-society/804193/64 "2017-12-13T16:02:43Z")
> [@Steve\_MB](#): > > “Families” don’t do any of that; individual people do. Really, it’s one thing to argue for socialism, but you’re arguing for social-insect-ism. If an heir succeeds in growing or maintaining wealth, that is a demonstrated value for consumers. If an heir loses wealth, it is redistributed to people who are satisfying consumer desires. Allowing large inheritances is a no loss proposition. ---
**Author:** ![WillFarnaby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/willfarnaby/32/514_2.png) [@WillFarnaby](https://boards.straightdope.com/u/WillFarnaby)\ **Post date:** [December 13, 2017, 4:06pm UTC](https://boards.straightdope.com/t/the-best-division-of-wealth-in-a-society/804193/65 "2017-12-13T16:06:39Z")
> [@Revenant\_Threshold](#): > > No, there’s no guarantee of that. Let’s say I inherit 250 million dollars from my successful parents. I put it in the bank, never touch it, and live off the interest. I am an irresponsible steward who doesn’t satisfy consumer desires - and my wealth isn’t dwindling. In fact, it might even increase. Not true. Your savings provides capital for banks to recognize potential consumer satisfiers. IOW, you left it to the experts. If your inheritance was confiscated, it would likely no longer be available for experts to invest. It would instead go to families or individuals who have shown no history of satisfying consumer desires. ---
**Author:** ![Steve\_MB](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/steve_mb/32/5339_2.png) [@Steve\_MB](https://boards.straightdope.com/u/Steve_MB)\ **Post date:** [December 13, 2017, 4:10pm UTC](https://boards.straightdope.com/t/the-best-division-of-wealth-in-a-society/804193/66 "2017-12-13T16:10:29Z")
> [@WillFarnaby](#): > > Not true. Your savings provides capital for banks to recognize potential consumer satisfiers. Whereas if it’s collected in estate taxes, the government just burns the money or buries it deep in the earth’s molten core or does some damn thing that prevents it from ever entering the banking system. It clearly doesn’t satisfy consumer desires, as no consumer anywhere has ever desired a road upon which to transport his goods or police to keep his goods from being stolen or firemen to keep his goods from burning up or any of that stuff. That’s Farnabynomics 101. ---
**Author:** ![WillFarnaby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/willfarnaby/32/514_2.png) [@WillFarnaby](https://boards.straightdope.com/u/WillFarnaby)\ **Post date:** [December 13, 2017, 4:14pm UTC](https://boards.straightdope.com/t/the-best-division-of-wealth-in-a-society/804193/67 "2017-12-13T16:14:21Z")
> [@Damuri\_Ajashi](#): > > OK, so what value is there to society in giving billions of dollars to Paris Hilton and her crowd that exceeds the social value of food stamps? If Hilton leaves her money with wise managers, they identify opportunities for profit (ie opportunities to satisfy desires at lower cost inputs). > [@Damuri\_Ajashi](#): > > So, once you get past a certain level of wealth, the descendants aren’t being stewards, they are the leisure class, they don’t have to satisfy anyone or anything. I mean we’re talking about estates in excess of $10 million/couple at the low end. Their assets are managed. Would you rather investors with a track record of identifying opportunities to satisfy consumer desires manage the money or the people who haven’t? That is the choice. Remember that investment in capital results in higher production possibilities (More food). The fact that there is a leisure class is offensive to our Protestant sensibilities, but there is no harm to society. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [December 13, 2017, 4:14pm UTC](https://boards.straightdope.com/t/the-best-division-of-wealth-in-a-society/804193/68 "2017-12-13T16:14:58Z")
> [@puddleglum](#): > > The point is that even the super rich like the Rolling Stones are willing to go to great lengths such as moving to another country to pay less tax. If they were Americans, moving would not be enough, they would have to renounce citizenship. There are tax consequences to renouncing citizenship. > [@](#): > > If they are willing to move possibly they would be willing to work less as well. Are we still talking about the estate tax? Or have we moved onto the income tax? > [@](#): > > There are probably plenty of inframarginal cases but that does not mean we should stop thinking on the margin. On the margin the higher the estate tax the more people will do to get around it. There is no way to know if 50% is an acceptable rate so that enough rich people do not alter their behavior to get around it. You are basically making an argument for getting rid of all estate taxes. That is of course ridiculous (even if that exactly what the Republican tax plan does). Some of the effects you are talking about here are extremely marginal and you would basically give up taxation to avoid those marginal cases. I have yet to see any cite that estate taxes on estates in excess of $10,000,000 has any effect on the lifetime income of the decedent. ---
**Author:** ![WillFarnaby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/willfarnaby/32/514_2.png) [@WillFarnaby](https://boards.straightdope.com/u/WillFarnaby)\ **Post date:** [December 13, 2017, 4:15pm UTC](https://boards.straightdope.com/t/the-best-division-of-wealth-in-a-society/804193/69 "2017-12-13T16:15:24Z")
> [@Steve\_MB](#): > > Whereas if it’s collected in estate taxes, the government just burns the money or buries it deep in the earth’s molten core or does some damn thing that prevents it from ever entering the banking system. It clearly doesn’t satisfy consumer desires, as no consumer anywhere has ever desired a road upon which to transport his goods or police to keep his goods from being stolen or firemen to keep his goods from burning up or any of that stuff. > > That’s Farnabynomics 101. How is the value of your road demonstrated? Value can only be demonstrated through voluntary exchange. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [December 13, 2017, 4:17pm UTC](https://boards.straightdope.com/t/the-best-division-of-wealth-in-a-society/804193/70 "2017-12-13T16:17:30Z")
> [@puddleglum](#): > > Society is not giving billions of dollars to Paris Hilton. Her grandfather would have been the one to give her any money. Since it is his money, it is his value that must be taken into account. And what is the benefit to society in letting her grandfather give her all that money free of taxes? It is no longer his money once it is taxed. Its kind of the big issue that some people have with taxes, its not theirs after it is taxed. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [December 13, 2017, 4:24pm UTC](https://boards.straightdope.com/t/the-best-division-of-wealth-in-a-society/804193/71 "2017-12-13T16:24:02Z")
> [@WillFarnaby](#): > > If an heir succeeds in growing or maintaining wealth, that is a demonstrated value for consumers. If an heir loses wealth, it is redistributed to people who are satisfying consumer desires. Allowing large inheritances is a no loss proposition. There is opportunity cost in giving the capital to an incompetent heir rather than a competent capitalist. What makes the heirs any better repositories for that wealth than you or me? From a societal perspective we no longer need dynastic accumulations of wealth like we did during the early years of capitalism to fund enterprises. We have this thing called the capital markets now and the market decides who would best grow and maintain that capital. We no longer rely on business acumen being a heritable trait. There is NOTHING about free markets that favors large transfers of dynastic wealth to people who won the genetic lottery. The argument seems to mostly rise from partisan aversion to taxes generally. I have yet to see a cite that lifetime productivity is influenced by an estate tax on assets over $10,000,000. ---
**Author:** ![HurricaneDitka](https://avatars.discourse-cdn.com/v4/letter/h/96bed5/32.png) [@HurricaneDitka](https://boards.straightdope.com/u/HurricaneDitka)\ **Post date:** [December 13, 2017, 4:25pm UTC](https://boards.straightdope.com/t/the-best-division-of-wealth-in-a-society/804193/72 "2017-12-13T16:25:39Z")
> [@Damuri\_Ajashi](#): > > And what is the benefit to society in letting her grandfather give her all that money free of taxes? It is no longer his money once it is taxed. Its kind of the big issue that some people have with taxes, its not theirs after it is taxed. I don’t think anyone’s making the claim that the benefit is to society. Letting individuals keep more of their money is a good thing in my eyes, but it’s a good thing for those individuals, not society at large. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [December 13, 2017, 4:29pm UTC](https://boards.straightdope.com/t/the-best-division-of-wealth-in-a-society/804193/73 "2017-12-13T16:29:08Z")
> [@WillFarnaby](#): > > Not true. Your savings provides capital for banks to recognize potential consumer satisfiers. IOW, you left it to the experts. If your inheritance was confiscated, it would likely no longer be available for experts to invest. It would instead go to families or individuals who have shown no history of satisfying consumer desires. So why does the benefit of that interest have to go to the heirs. Would you feel better if the federal government couldn’t use the estate tax money to feed poor children and had to use it to fund the SBA, and other federal elements of the US economic infrastructure (perhaps federal science grants for basic scientific research)? Or is it really because you think grandpa Hilton is getting ripped off if his money doesn’t go to Paris? ---
**Author:** ![Steve\_MB](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/steve_mb/32/5339_2.png) [@Steve\_MB](https://boards.straightdope.com/u/Steve_MB)\ **Post date:** [December 13, 2017, 4:32pm UTC](https://boards.straightdope.com/t/the-best-division-of-wealth-in-a-society/804193/74 "2017-12-13T16:32:22Z")
> [@WillFarnaby](#): > > Would you rather investors with a track record of identifying opportunities to satisfy consumer desires manage the money We are talking about estate taxes. The people with a track record of managing money are D-E-D dead. Do you believe that ghosts communicate with the living? ---
**Author:** ![Steve\_MB](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/steve_mb/32/5339_2.png) [@Steve\_MB](https://boards.straightdope.com/u/Steve_MB)\ **Post date:** [December 13, 2017, 4:34pm UTC](https://boards.straightdope.com/t/the-best-division-of-wealth-in-a-society/804193/75 "2017-12-13T16:34:28Z")
> [@WillFarnaby](#): > > How is the value of your road demonstrated? Simple. Lie down in the middle of it. If the road has no value, you will be able to take a nap and then get up and go about your business. If it _does_ have value, the results for you will be… less pleasant. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [December 13, 2017, 4:36pm UTC](https://boards.straightdope.com/t/the-best-division-of-wealth-in-a-society/804193/76 "2017-12-13T16:36:35Z")
> [@WillFarnaby](#): > > If Hilton leaves her money with wise managers, they identify opportunities for profit (ie opportunities to satisfy desires at lower cost inputs). Once again, our capitalistic system no longer requires dynastic wealth. You don’t need to give the money to Paris to get the money into the hands of those managers especially if Paris gets to pick the managers. > [@](#): > > Would you rather investors with a track record of identifying opportunities to satisfy consumer desires manage the money or the people who haven’t? That is the choice. What track record does Paris have? > [@](#): > > Remember that investment in capital results in higher production possibilities (More food). Sometimes you are pushing a rope on capital investment. There is no shortage of capital in a sub 5% prime rate environment. > [@](#): > > The fact that there is a leisure class is offensive to our Protestant sensibilities, but there is no harm to society. It offensive to meritocratic sensibilities. ---
**Author:** ![psikeyhackr](https://avatars.discourse-cdn.com/v4/letter/p/97f17d/32.png) [@psikeyhackr](https://boards.straightdope.com/u/psikeyhackr)\ **Post date:** [December 13, 2017, 4:39pm UTC](https://boards.straightdope.com/t/the-best-division-of-wealth-in-a-society/804193/77 "2017-12-13T16:39:10Z")
How many high school graduates know what Net Worth is? I don’t even know if my high school had an accounting course when I was there. I was put in College Prep and that was that. Double-entry accounting was 400 years old when Adam Smith was born and 500 years old when Marx was born. But we don’t hear Capitalists, Communists or Socialists suggesting that it be mandatory in our schools. So what would the distribution of wealth be if it had been mandatory in high school since 1960? A Swedish high school teacher who claimed he was a Socialist told me that he objected to the idea on the grounds that, “the math would make capitalism seem logical to the students.” ROFLMAO But then capitalists should be in favor of the idea, right? 😃 The “smart” people that believe in ideologies want other people kept ignorant for their own good. :smack: ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [December 13, 2017, 4:39pm UTC](https://boards.straightdope.com/t/the-best-division-of-wealth-in-a-society/804193/78 "2017-12-13T16:39:38Z")
> [@WillFarnaby](#): > > How is the value of your road demonstrated? Value can only be demonstrated through voluntary exchange. Wait, you’re not saying that roads have no value are you? ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [December 13, 2017, 4:42pm UTC](https://boards.straightdope.com/t/the-best-division-of-wealth-in-a-society/804193/79 "2017-12-13T16:42:31Z")
> [@HurricaneDitka](#): > > I don’t think anyone’s making the claim that the benefit is to society. Letting individuals keep more of their money is a good thing in my eyes, but it’s a good thing for those individuals, not society at large. Yes, and public policy should be based on what is good for society tempered by a healthy respect for individual rights. The individuals in this case are dead. The dead deserve to be treated with dignity but not over the welfare of the living, do they? ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [December 13, 2017, 4:45pm UTC](https://boards.straightdope.com/t/the-best-division-of-wealth-in-a-society/804193/80 "2017-12-13T16:45:38Z")
> [@psikeyhackr](#): > > How many high school graduates know what Net Worth is? > > I don’t even know if my high school had an accounting course when I was there. I was put in College Prep and that was that. > > Double-entry accounting was 400 years old when Adam Smith was born and 500 years old when Marx was born. But we don’t hear Capitalists, Communists or Socialists suggesting that it be mandatory in our schools. So what would the distribution of wealth be if it had been mandatory in high school since 1960? > > A Swedish high school teacher who claimed he was a Socialist told me that he objected to the idea on the grounds that, “the math would make capitalism seem logical to the students.” > > ROFLMAO > > But then capitalists should be in favor of the idea, right? 😃 > > The “smart” people that believe in ideologies want other people kept ignorant for their own good. > :smack: I agree that double entry accounting and basic statistics would be very valuable additions to the high school curriculum (much more useful that trigonometry or calculus in 99% of cases) but WTF are you talking about? Are you in the right thread? [Previous page](https://boards.straightdope.com/t/the-best-division-of-wealth-in-a-society/804193.md?page=3) [Next page](https://boards.straightdope.com/t/the-best-division-of-wealth-in-a-society/804193.md?page=5)