Wednesday, 27 November 2013

Property is theft

I have heard this argument all my life, why should family or friends benefit from the hard work of others simply through inheritance? They did nothing to earn it, so why should they be any more entitled to it than others (ie the state, which is the only alternative if wills are not permitted).

This is an official policy of some on the left of Labour, no need to go any further to the fringes, so needs a serious analysis in case for any reason it ever becomes part of their manifesto in any form.

Looking at a family, until the children are old enough to work it is fully accepted the parents support them through their earnings, but under the far left equality is most important so requires vast levels of taxation, so even though some parents earn far more than others, as each person, and especially the children are equal the end result must be equalised as far as possible, so the successful share with everyone regardless of their abilities.

This is interesting in itself, as high taxation of the top levels of society is very similar to children of working age being given money by their successful parents, only in a long way round. The only difference is the children here are strangers, whose parents happen to earn less than average so must be brought up to the mean for equality.

That aside, what actually happens with the wealth of the parents after the children reach working age? Under socialism, the far end, whatever amount the parents add to the system most is removed and put back into it, not directly (there are no examples of negative taxation in any manifestos, ie returning money back not just to non-working people, but everyone who has less directly, beyond the margins of the lowest earners). Instead those taxes go to the state who spends it as they wish, as they have the role of protecting society whatever their specific aims and ideals.

Therefore the wealth of the parents left behind after taxation may actually not be sufficient to spend on children of working age, but when there is then although it's not legally binding to do so, most parents do keep spending money on their children because they still have more and may reach a point where their mortgage is paid off they need less so are more able to do so.

Therefore all they have to do where inheritance is banned is to share their spare money while they are alive. Assuming they are allowed to have any of course. And what about charitable donations, to strangers or non-related friends? What if someone chose to hand over their spare money to people in need of it because they wanted to? Or even put their property in trust so a charity could get rent or other benefits? Would the government see that as a good thing?

Making laws is a thoroughly Byzantine task, as every possible result must be considered in advance, otherwise any loopholes or injustices will be translated to reality and the damage will be done.

Therefore, if you ban inheritance, you must regulate living gifts. If someone can't hand over their property on death but reverts to the state, is it OK to give your money to charity, friends, or family before you die? Once you decide that then technically you must have the same rule for wills, as what's the sense in being allowed to give to charities while alive and not after death? If you donate £50,000 to the RSPCA and die the next day it would be OK, but if you left them the same in your will it would be void as all property went back to the state, so then you would need exceptions. Any property could go to charities but nothing else. Then wills must return, and the likelihood would be the state loses out altogether as nearly everyone would prefer to decide who got their property than the state, and the state would lose a massive amount of income (although it all went to good causes beyond their control). They would then need to raise taxes even higher to fill that gap.

They would, of course, also have to restrict gifts within life to stop people simply sharing what they have before they die (although that is exactly what the state are doing by compulsory means under socialism). So children may be banned from receiving money at 18 from their parents (try enforcing that mind you) otherwise all that would happen is besides their capital (which can be transferred, but requires far more complexity) all they'd do is work out how much they can afford to give their children while they live, and then make sure they get as much as possible that way. But what about other relations or friends? People don't just leave money to their children, often not at all through personal disputes. So really you won't be allowed to hand over any gifts or be accused of evading inheritance taxes. Except charity I suppose.

Basically a simple view can be seen to operate in practice, although this is a conventional opinion and policy of the far left, and secondly the very fact they clearly have not run this very simple experiment of the consequences demonstrates their hearts rule over their heads, and there is very little going on in their heads or they could not allow that to happen.

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