It is not the whole story, no, it is also a function of wealth. Yes, "money" is just an abstract placeholder for "value", but given that it is, I don't see how you can argue that wealth and income are not the sole defining factors of "poverty". If you have no land, and then you get lots of money, and buy land, now you are no longer landless.
Then you can start growing your own food, being productive rather than relying on government or charity.
You misunderstand my point. Go into any environment with substantial numbers living in poverty and hand them cash and you will not fix the problem. Give them land and resources and everything they need to be wealthy, but stick them with corrupt governments, no institutional support structures, and no culture of both the protection of property and the concepts of self-reliance and wealth management, and you're right back to where you started, if not right away, within a few years, at most a generation.
It requires an understanding of the concept of capital. This is something the government fundamentally misunderstands. Every cent you hand them will get spent, the overwhelming majority will get spent on non-infrastructure, non-capital expenses.
The inheritance tax is an exercise in converting Capital into Money, which is stupid. You think you're getting the area under the curve, but all you're doing is reducing the slope.
That doesn't make any sense. At all. First, how is "jobs" even relevant? If income doesn't measure poverty, than jobs sure as heck doesn't. If you work in a factory in a foreign country for 5 cents a day, you have a job, yet you are never going to get out of poverty.
Second, what is the connection between inheritance and jobs? Are you saying the only people to ever "create" jobs are people who inherited their fortune?
A source of income is one way to begin the process of taking care of yourself. It is not the only way. Most jobs in this country are not created by people who inherit their fortunes. But quite a few are, a staggering number of them, I want to say around 45% of non-government jobs. My point is that the fortune exists, and it is creating jobs. It isn't being spent, it is serving as the capital which supports jobs. It's the machine you operate, the building you work in, the credit against which additional capital is borrowed to take a chance hiring you, in the hopes that you'll end up revenue-positive. It does that today, and it does that tomorrow. If the government gets it, it is spent today and doesn't exist tomorrow.
And if a rule change is implemented that drastically reduces the levels of those fortunes, the overall wealth of the country will decline, as there won't be investors around who can buy those means of production anymore. We just took away their fortunes and spent it. So instead of getting 2 billion dollars for space X, the gov't gets 40 million, or some other lower price, because there isn't another billionaire out there to pick it up. The "value" of these fortunes is incredibly misleading. The liquid value is far far lower.
It's like, if you had to sell your house right now, and there were no buyers who could afford it, you have to lower the price? That's what I was talking about. Upon death it has to be sold to pay the tax bill, so you get what you get for it, and it's going to be way less, particularly the longer this goes on, as overall wealth declines.
Your own example is the opposite of your point. Musk (supposedly) "created" jobs. He didn't inherit his fortune.
Now those jobs exist. No matter who takes over when he dies, those jobs already exist, and no new jobs get created.
I wrote a whole blog post on the catch phrase "A poor person never gave me a job" ...
No, Musk is the perfect example because he didn't inherit his wealth. He did neat things that contributed to the world and continues to do so. He didn't have to inherit his wealth, but he's done far greater things with the money he's been given than the government has during that time. If someone had handed Musk 2 trillion dollars a year for the last 10 years he wouldn't have a net worth of negative 40 trillion, he'd have turned it into 90 trillion, solved the energy crisis, fixed social security and ensured world peace for all time. There's no reason to think that what he wants to happen to his wealth upon death
isn't the best thing. It might not be, and he's free to stipulate that it go to the government, but the idea that the government knows best what to do with that money is ignoring the facts. And one of the foundational premises of the income inequality idea is that to be rich, you have to inherit rich, and Musk works as a guy who didn't do that. Instead of worrying about what Musklings will do with the Musk fortune, get as many people as you can to go out and become Musks themselves. Start a company, improve the civilization. Your progeny will benefit from it.
well, yeah. The highest bidder, obviously. That they can afford gives at least some minimal evidence that they can manage money and are interested in that particular company. Similar to how companies like get their seed money in the first place. Then the investors select who they think is the most qualified executive to run it.
The premise of such a large inheritance tax is that it contributes to inequality. Ergo, most of the people who do buy and take over companies are the wealthy who inherited their wealth. Within a generation this massive wealth would be totally wiped out by such a large tax. Everybody in the country would have gotten an extra 50k in services, and now the majority of the wealth of the world is gone. So when it comes time to sell...there's no buyers. Certainly the buyers that exist lack the same means, and so the "value" of the "billion dollar fortune" that was based on value of a company, now nets far less in taxes than you were hoping.
Might not be? There is no reason at all to think they would be the best custodians. But why is it "gone instantly" otherwise?
May as well just give it to any randomly selected person on the street.
I'd favor randomly assigning inheritances to individuals over giving it to the government. At least with a random person there's a chance it will be preserved as capital. The false choice is false. The government is a shitty custodian. Descendants don't have a stellar track record, particularly second or third generation, but there are fortunes out there hundreds of years old whose families are doing a fine job not being 1. massive assholes and 2. squandering their wealth on shit.
Thing is, going to work and earning money by doing productive labor is even more good for society. So, if your theory is correct, why would we disincentivize working, relative to investing? Investing does not directly increase GDP. Working does.
Also, it is debatable how much investing really does help "everyone". Basic economic theory suggests that any excess profit is an indication of market inefficiencies. When price sits where supply and demand curves meet, there's no money left over to pay dividends.
I feel like I'm being trolled.
Basic economic theory suggests nothing of the sort! Profits do not represent some sort of inefficiency! Profit,
mutually profitable endeavors, are the whole point! I make money selling you apples, you get apples! My profit is in the money yours is in the apples.
Investing and working are both necessary to increase "GDP" whatever the hell you think that is. This is why communism failed in the soviet union. They failed to understand that prices weren't exploitation, they were communication.
You need labor, AND you need capital. A 100% tax on either
will not work. Taxes on capital are far worse for long term economic growth and societal advancement, due to the illiquid nature of capital.