After thinking about this idea for a while, it occurred to me: couldn't the same thing be accomplished by banning inheritance? Debts are already forgiven upon death. The average human life isn't that much longer than 50 years, and the resets would be happening continuously.
This is an entirely different idea. Banning inheritance makes corporations even more powerful, as they can increase their wealth from one generation to another and families cannot.
> Banning inheritance makes corporations even more powerful
Corporations are legal fictions through which their owners operated. If ownership of corporations can’t be inherited, it doesn’t make “corporations” more powerful, it just distributes power over corporations (presuming that the absence of inheritance means that assets escheat to the State, and that the State itself is fundamentally democratic.)
Not quite. You should have life insurance and something the bank can seize to be able to get financing. So even if you die the bank can recover some of the principal. You can also file Chapter 11; that's actually a reset.
Any fixed amount only makes sense in a world with sound money, otherwise inflation or deflation will make the fixed number shift over time. Unfortunately because of these pernicious "inflation targets" with monetary and fiscal policy being popular the purchasing power of currency isn't even being attempted to be held stable in many parts of the world at the moment.
Why is inflation targeting pernicious? To the extent that currency is a replacement for bartering, a positive inflation rate is a mechanism for enforcing a sort of temporal locality in that conceptual bartering. Why is that bad, or else what other functions is currency serving where inflation targeting is undesirable?
Not sure. Maybe a policy like this stops crazy property inflation? And limits farm sizes? Meaning, local agriculture flourishes?
I think it's better for people to stop working when they get pretty rich, like $20mil. People should stop working when they get rich enough to pay for an awesome life, and give someone else the chance. And if they actually enjoy working, they can do it pro bono.
I do not trust the uber rich to mind their own business and stay out of other people's lives.
This view comes from the largely flawed assumption that making money is a zero or negative sum endeavour. In some cases it is but in many it's not. Whatever you think of his character, if Musk just threw in the towel at PayPal we wouldn't have SpaceX. I can say the same thing for Jobs, eg if he gave up after Next where would Apple be.
Making money is generally a positive sum endeavour as long as you're not generating unpriced externalities such as carbon pollution, and as such I don't like the idea that rich people stop working after they're rich. As long as they're not creating externalities we want them to continue building and contributing to society. It's a much better alternative to them relaxing on a yacht somewhere, which contributes nothing.
It's also inaccurate to think that making money by building crowds out other people from doing so. The opposite is the case. It's the same mindset behind the "immigrants took our jobs" train of thinking.
People can work as much as they want. They just don't get paid after $20mil.
I'm not worried about making money being zero sum. I'm worried about uber rich people doing uncalled for things with too much money. No one should have that kind of power.
What happens to any startup founder when the company hits 20 million? Do you propose we confiscate the extra shares? Obviously, putting a 20million dollar cap on the value of any startup would be profoundly distorting to the market for startups.
Ownership in a company that grows in value is not equivalent to getting paid (which is approximate 100% of the click bate tweets).
> No one should have that kind of power.
I fundamentally disagree. I strongly prefer that Bill Gates gets to spend his money the way that he sees fit rather than it go to the federal government. Just the same with Elon Musk and Warren Buffet.
I think we'll find a lot of the people who are currently uber rich would've either stopped working at $20 million (which would've been a big loss to the economy and society at large), or they would've gone to another country (as we see in countries with a wealth tax in EU - also a big loss). Money continues to be a motive even for those with enough to satisfy every need, because it becomes a marker of status, achievement, etc. If you remove that motive then you remove the output of some of our best minds.
You'll certainly remove their clout over society but I think you also need to consider the significant downsides to this proposal. Maybe you would be better off finding ways to limit the power of rich people over society (eg political contribution laws) instead of trying to ban being rich?
I think the issue is that people don't work to have money. They work so they can:
1. Have real practical advantage over other people in their community
2. Have real practical power to shape their community
For #1 that's mostly the middle class, who want better schools for their children, and safe pleasant environments for their families. Actions that remove that incentive, make the middle class irrelevant. Very few people are willing to work 9+ hour days during the start of their career, just so they can have more toys, and not a larger house in a good neighborhood later in life.
For #2 that's mostly the elite. If they're denied influence via money, they'll simply go into politics or religion where we'll end up with a society shaped by lucky charismatic people, and not necessarily anyone who has any skill. At least we can say non-hereditary wealthy people are lucky, and skilled as opposed to just being lucky.
> What about just limiting inheritance to, say, 500k per child?
What about just charging income tax on inheritance (but allowing deferral of tax recognition of windfall income over a period of, say, up to 10 years from the date of receipt.)
I wonder if this would massively increase conspicuous and frivolous consumption. Some may go the direction of Bill Gates, but others may not be so benevolent. At least when wealth is conserved in the family unit it's mostly passively invested in the economy as capital supply.
