Inheritance tax should be 100%
What if it were impossible to receive wealth from your parents and illegal to give money to your children?
We are all born naked. From that point onwards, paths diverge pretty damn quickly. Some of us are born into an ocean of privilege, which can come in all sorts of shapes, forms, and colors.
As far as demographics go, I am ‘boring’ — I am able-bodied (74%), English-speaking (78%), I have beyond-basic literacy (79%), I’m cis-gendered (99.5%), heterosexual(ish) (96.5%), white (76%), and I finished high school (90%). All of those things come with significant privileges; if I’d fallen into the minority side of those percentages, my life would be significantly harder. I fall into a number of minorities, too. I have a passport (42%) and a college degree (36%). As much as I won the privilege lottery, there’s something that probably out-ranks all of the above in terms of my personal head start: something that has very little to do with who I am or how smart I am: Inter-generational wealth.
The simple fact that my parents could invest in their children has been the most comprehensive advantage I could have had in life. We were never without water, electricity, or food in the fridge. That was just the first layer. I was lucky enough to be an exchange student for a year when I was in high school — a privilege I’ve benefited from in countless ways. When I went to university, after gaining my degree, they could — and did — pay off my student loans. When I was young, my parents' support meant I was able to take unpaid internships which gave me crucial early work experience. I was able to ‘take a risk’ and start companies, in the knowledge that if I were unable to pay my rent, I could go, cap-in-hand to my parents. I was never, truly, at risk of going hungry.
Intergenerational wealth unlocks something even more insidious than privilege: intergenerational privilege.
And here’s the thing: perhaps all of this makes sense until you realize that intergenerational wealth unlocks something even more insidious than privilege: intergenerational privilege. We have people who have privilege not just because they were born with a cabal of trump-cards; their parents were, too. And their parents. And their parents.
The inverse is also true; the lack of privilege is handed down in the same way, and it doesn’t take long to realize that we’re all standing on top of a pyramid of institutionalized racism and inequality. Take a long enough view, and it becomes clear that the system is rigged, and breaking that cycle is nigh on impossible.
But there is a way:
Inheritance tax should be 100%
And so we should do away with it altogether. Inheritance tax should be 100%. You shouldn’t be allowed to give anything you’ve earned to your children.
Over the past couple of months, I’ve had this conversation — suggesting that inheritance tax should be 100% — with dozens of people. The reaction has largely been one of abject horror.
Side note: In this article, I’m using ‘sending my kids to college’ as short-hand, mostly because it’s a significant expense that parents sometimes carry for their children. I have my doubts whether college attendance is — or should be — a proxy for future success. If ‘help pay the kids to pay for a downpayment on a house’ or ‘help ensure that the kids don’t fall into debt’ or ‘guarantee that the kids can afford to cover an unexpected expense’ works better for you, please mentally substitute those scenarios.
“But I worked so hard to be able to give my children a head start,” they’d object. “My father worked his ass off to be able to pay for our college,” they’d counter. All of that is true, but there’s a problem with that. Merely working your ass off doesn’t guarantee the ability to pay for college.
Ask people around you two questions: 1) Do you work hard? 2) Are you able to put your kid(s) through college? Depending on who you ask, I bet you’ll be able to find a number of people where the answers are “Yes. In fact, I work two jobs,” and “No, there’s no way I can send my kids to college.”
The question crystallizes; just working hard isn’t a direct correlation to being able to send your kids to college. The American dream is a lie, and there’s something else at play.
You’d have to make sure that every school in the country is good enough that you’d be happy for your child to go there.
Imagine that your child’s start in life wasn’t going to be special. Imagine that you wouldn’t be able to leverage your privilege to give them a head start. You wouldn’t be able to give them money to solve their problems. What would have to change about society today, for that to be feasible? You have to raise the floor. You’d have to make sure that every school in the country is good enough that you’d be happy for your child to go there. You’d have to ensure that access to medical care was universal. You’d have to invest heavily in public mental health, drug rehabilitation, and housing. You’d have to significantly raise the minimum wage to ensure your children can afford to live and thrive. You’d need to ensure there were robust social safety nets in place, because if you’re not allowed to save them, the system would need to.
If it sounds horrifying to give all your wealth to the government at the end of your life, that is probably at least in part because the government itself is woefully ill-equipped to help ensure your children have the best possible start in life. Over the decades, the government has become a machine for enriching the 1%. To implement measures that are often inherently racist laws and sentencing guidelines. To run public schooling into the ground to such a point that if you can’t afford a private school, your kids are off to an awful start. Our government is awful. But we have the cheat codes: By not having to rely on it, it means we can bypass it all, and give our children a Falcon-sized boost. And I’m threatening to take that away from you.
The thought experiment
If you’re reading this article and you’re seething with rage, ask yourself why. Does the thought of the government helping your child get a start in life seems absurd? Does having to rely on public education and health makes you angry? Does the extreme lack of safety systems scare you? Is the reason you are so scared and angry right now that you realize that it would be an arduous journey ahead for your kids? That the lives of your children would be so much harder than they need to be?
You’re in luck; I don’t have the power to levy taxes or to make policy; you’re probably safe from my 100% inheritance tax.
For the great number of children out there who weren’t dealt four jacks with an intergenerational wealth kicker, the current system is all they have
But consider this: That emotion you’re feeling right now, is fear of losing a major privilege. One that many people don’t have. For the great number of children out there who weren’t dealt four jacks with an intergenerational wealth kicker, the current system is all they have. And it isn’t a pretty road; there are so many ways to fall into a hole that is extremely hard to extract yourself from. If a prolonged illness results in medical bankruptcy. If they can’t afford a place to live. If they were a victim of a violent crime and can’t afford a therapist to work through the trauma. If they can’t focus at school because the building hasn’t been renovated since the 1940s, and the classroom is a noise-factory staffed by under-motivated teachers. If they, even if they work as hard as they can, are never able to even get a shot at fulfilling their potential.
As a nation, we ought to be judged not by those who started with a massive head start. We should take a look at those who started at the rear of the pack. If you’re okay with what you see there, you should be deeply ashamed of yourself. We’re better than this.