| Bonking for virginity |
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| Written by Tim Worstall | |
| Wednesday, 08 August 2007 | |
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My somewhat quixotic (and one man, I have yet to find Sancho) campaign
to abolish inheritance tax in order to increase social mobility gets
some supporting evidence over in the Wall Street Journal blogs
. The observation is that the children of those who have proven to be
good at making money don't actually seem to be very good at keeping
hold of it. Indeed, precisely because they are such pampered little
darlings they're even worse at hanging on to it than others. Clogs to
clogs in three generations as it were. The problem is inheritance tax itself. Rather than hand over 40% of their lifetime's work to the Treasury, those who've made money set up trusts and foundations: these do not allow their callow youths to get their hands upon the capital, only the income from it, and thus the financially inept do not have a chance to lose that cash. It is thus people's response to inheritance tax, those trusts, which perpetuate the inequality of wealth down the generations. Thus, if we want to encourage social mobility, something which requires that some move down as others move up, we should encourage the wealthy to leave their wealth to their children unencumbered, so that they can indeed lose it. As one such was asked where his inheritance had gone, on "heroin and taxis". They will only do so if they are not threatened with taxation. I realize that at first sight, abolishing inheritance tax to promote social mobility is a little odd. As one wag to whom it was mentioned put it, like bonking for virginity. But then there are counter-intuitive realities out there: as Steven Landsburg has pointed out , if more people have affairs STD rates will go down. So why not? Let's increase the ease with which the rich can lose their money, abolish a tax and raise the level of social mobility, all in one fell swoop. All that's needed now is for a few Panzas to belly up to the bar and join this quest.
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