Reply #39: In the past, both progressives and conservatives favored confiscatory inheritance taxes

[HamdenRice]

There is no justification in either traditional or liberal or conservative capitalist ideology for allowing a lot of wealth to pass from one generation to the next.

You might be surprised to learn that in the 1800s, many extremely conservative ideologues railed against inheritance. Not only were inheritance taxes created to prevent inheritance, but the very system of trust inheritance was shot through with devices to make it more difficult for the rich to pass most of their wealth to their children.

The main conservative and liberal economic reasons for allowing some wealth to be passed down is as an incentive for the present generation to work hard and get wealthy. In other words, we have a certain amount of "utility" from getting rich and enjoying it while we live; but we get some additional "utility" from getting rich and knowing that we can also take care of our loved ones.

This justification, which used to be agreed on by both conservatives and liberals provides for limited inheritance with very high, confiscatory progressive taxation above a certain ceiling -- in current prices, probably about $2 million.

The ideology we have today, epitomized by Bush, which favors unlimited inheritance is not traditional conservatism. It's more like what Krugman calls "economic royalism" -- a desire to create a permanent aristocratic class. That is not traditional conservative capitalist doctrine.

That said, there has been a lot of scholarship that shows that the passing down of wealth is trivial in providing advantages to the next generation compared to the passing down of connections, status, elite education, and other intangibles.