Time to change inheritance tax NOW
I don’t mean to be morbid but unless we want a whole new bunch of spoiled billionaire kids — we better deal with inheritance tax now.
Inheritance Tax
Inheritance tax is very important. We all want to leave something for our children, and we should be able to. Let me reiterate though, the problem is neither the upper middle classes, who make hundreds of thousands of dollars a year, nor the rich, who make millions of dollars a year. It’s the super-rich, who make hundreds of millions and billions, and pay almost no tax.
People who inherit vast fortunes are a different matter. Often, they haven’t earned anything themselves. Don’t get me wrong. Some are amazing philanthropists who contribute to society and good causes. Great. Many though contribute little of social value to society.
Children of wealthy families grow up with every opportunity possible; great educations, lives, toys, networks and opportunities. But when they turn eighteen, they should be treated like everyone else. Well almost. We all work for our children after all, and we should be able to help them, within reason. Bill Gates agrees, as do many other very wealthy people who aren’t leaving all their fortunes to their kids – well, only a part, but not all. The kids are being provided for. Bill Gates’ kids are not going to be billionaires through inheritance; they will only inherit $10 million each.
And Warren Buffet famously said, “I still believe in the philosophy … that a very rich person should leave his kids enough to do anything, but not enough to do nothing.”
Sure, a motivation of parents is to provide for their children, but there should be a maximum that can be inherited from an estate as a whole and a maximum per person. The question is: how do we set this amount?
If everyone has a minimum income or UI (Universal Income), which we’ll discuss later, we could use UI as the basis for maximum inheritance levels. Let’s see how that could play out with a UI of £12,000 per year.
If one person could inherit up to 1,000 (years) x UI and in this case it would be £12 million, the maximum that could be inherited by any one person would be £12 million.
For the estate maximum as a whole, let’s multiply this (£12 million) by 10, so there’s plenty to share. So, in this case, the maximum that could be inherited from an estate would be £120 million.
£12 million per person tax free, coupled with the UI, that should keep them in clover for the rest of their lives.
So, what happens to the rest? It gets split. Half goes to the government of the day as social; the other half goes to the sovereign wealth fund (as discussed later).
Let’s look at a £1.2 billion UK estate example to see the breakdown:
£12 million maximum per recipient
= 1,000 (years) x £12,000 (UI)
£120 million maximum per estate
= 10 (inheritors) x £12 million
Balance: £1.08 billion
= £1.2 billion (total estate) – £120 million (inheritance)
Balance split: = £1.08 billion / 2 = £540 million
£540 million – social to the government
£540 million – social investment to the SWF
Easy. Inheritance tax solved and even the super-rich will want a decent UI. No more super-rich from inheritance though. They’ll have to earn it!
There shouldn’t be any caps on wealth earned. Inventors and entrepreneurs are the backbone of our society and their potential incomes should not be capped, nor should they pay more tax than others. Whether it’s new products and services or space exploration, we don’t want to stifle this. Today, space exploration is partially driven by private fortunes such as Elon Musk and SpaceX. We should applaud this and not stifle this. We need trail blazers – whether to climb mountains, go to space, invent or invest in new health devices or develop new goods and services.
These measures will help reduce tax evasion, but more is needed.
Let’s put a stop to tax evasion in a very simple manner, keep it simple. Imagine how much easier it would be to complete your tax returns if there were no exemptions and a flat-rate tax.
If you were a resident of a country, you would file a return in that country. Residents would then pay tax dependent on where they spent their time. If they split their time between two countries, the tax would get split proportionally between the two.
It’s more than fair and makes it easier to deal with supposed offshore investors.
https://www.cheatsheet.com/entertainm...
https://www.cnbc.com/2015/03/09/boome...
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