[EliRivers]

"First, if we have a system where people are allowed to own capital and that's legitimate, doesn't inheritance just follow?"

No, it doesn't necessarily follow. We could have a system based on the idea that people should benefit from their own efforts. You can own capital, well done you, and you can even choose to give your property to other people - it's yours, after all - but giving involves one person losing the benefit of it. Inheritance involves people holding onto things until they don't need it any more, and have no use for it, and whatever happens to it next affects them not at all, but they still want to be able to dictate what happens to it. We could jack up inheritance tax to basically 100%, and still have a society in which people can own capital and we encourage people to benefit from their own efforts.

[JoeAltmaier]

In this day of clever contracts, I could write one where I co-own my capital until I die. Thus constructing inheritance even if it doesn't generally exist in law. Like charitable remainder trusts etc.

[EliRivers]

You could; that would be better. Such a contract would have to surrender some control to the other co-owner; in effect, you've given something away, while you were alive. Trusts do a similar thing; the Duke of Westminster just "inherited" a large chunk of London, but he can't just do whatever he wants with it (that said, it is clearly tilted way too far in his favour).

I've no doubt some people would try to cheat the system, but that requires the taxman to look the other way; we already have situations in which people have tried to cheat by obeying the law in paperwork only, and a taxman paying attention can get them.

There already are cases in which people try to come up with clever contracts to attempt to dodge inheritance tax, and the taxman has been known to tear it up.

[dpark]

> Such a contract would have to surrender some control to the other co-owner

No, it wouldn't. You could easily structure this contract such that the person on the receiving end has no control until the original owner dies.

[EliRivers]

We call that a "will". They already exist. The new owner pays inheritance tax because they've inherited things. Labelling it something else doesn't change it. People already tried.

I did say that people already tried this sort of thing and that the taxman has come down on them in the past. This has really been tried and really not worked.

[dpark]

> We call that a "will". They already exist. The new owner pays inheritance tax because they've inherited things.

You're hypothesizing a world where inheritance isn't a recognized thing and asserting that in such a world, it would be impossible to effectively recreate inheritance with clever contracts. I'm telling you that you're wrong. It would be trivial in any world where contracts and transfer of ownership are accepted to recreate an inheritance system.

[EliRivers]

I am speaking of this world; the world in which we live today. In this world, "inheritance" is a thing we already know about. In this world, when actions are taken to stop something we know about, people don't suddenly forget about it.

We have laws already against people trying to dodge inheritance tax, and when people try to do that, it is frowned upon. In this world, should inheritance tax effectively become 100%, and based on the knowledge people have now, I see no reason why society would not notice people trying to break the law by clever use of contracts to recreate the inheritance system. This is something that already happens; laws come into being, some people try to break those laws, it is frowned upon. This happens already. Fact.

"It would be trivial in any world where contracts and transfer of ownership are accepted to recreate an inheritance system."

This would be some other world entirely. Sure, in that world that you're hypothesising, you can have whatever you like. I'm talking about this world; the world in which we already live, where we have hard evidence of people already trying to dodge inheritance tax with contracts and getting busted for it, and hard evidence of new laws being created and people being busted for breaking them. You have no such evidence (hardly your own fault; your world doesn't exist), so I find your argument less convincing. I will find any argument based on hypothetical worlds where you simply assert whatever you like as fact to be unconvincing.

If you have no facts and no evidence to present, the usefulness of this conversation is at an end.

[Eridrus]

We should probably get rid of the charity tax exemption above a small threshold anyway.

[JoeAltmaier]

It doesn't take charity to hold property in common. Or shares in a corporation with a nominal value of $1. No gift is required I think.