5 thoughts on “The coming boom in inherited wealth

  1. Thomas Pikkety has written a lot about this area, using census data from Europe and the USA. He also has outlined how governments can tax this unearned wealth. But in Australia we have not had a full National wealth survey that would outline the benefits and costs of such wealth taxes. Just like the Henderson Inquiry back in the 1970s, we need a national wealth survey in Australia. Then governments can consider the wealth tax options on unearned wealth.

  2. Could explain why newer generations seem increasingly servile and atavistic ideas hold on for a long time as wrinklies rule with an iron fist.

    Perhaps Dickens as much as Austen

  3. J.Q. begins his article by writing: “… sometime in the early years after the global financial crisis concerns about inequality moved to centrestage.” He ends it by writing: “Whether we like it or not, the patrimonial society seems to be on its way.”

    The only conclusion is that while academics, armchair socialists and poor people themselves are concerned about inequality, the powerful and rich people who run our society are not. And the powerful and rich people keep on winning. The decaying and dwindling middle class have been getting enough scraps to keep supporting the system. But for how long?

    Inside Story also has the article “Organised irresponsibility” by Ryan Cropp, which is a review of “Shutdown: How Covid Shook the World’s Economy” – By Adam Tooze. People rush into print while an historical phenomenon is still playing out. There are reputations and dollars in that path. Are there insights? Well, yes, sometimes, it seems:

    “All of which raises the question: was this a turning point, the beginning of the end of the neoliberal age? Tooze is sceptical. The radical policy choices of 2020, he writes, were “Janus-faced.” On the one hand, they did reduce inequality, pull people out of poverty and reinvigorate left politics. But the “basic logic” of these fiscal interventions was always conservative. There was no redistributive impulse behind them, no coherent program for societal change. The actions of governments and central banks, he writes, were not Keynesian but Bismarckian: “Everything must change so that everything remains the same.” It was an ad hoc, top-down, crisis-fighting response with the thoroughly unrevolutionary goal of preserving the system.” – Ryan Cropp.

    Tooze’s insight seems perfectly valid to me. Quiggin’s prognosis supports this view. The patrimonial society is not just on its way. It’s here, completely in charge and it’s preserving and intensifying itself. What becomes clear is that late stage neoliberalism is entirely reactive: to climate and environmental crises and to novel zoonoses. The system must be preserved and indeed intensified. The crises it creates can only be reacted to. To prevent the crises would require changing the system itself. That is not permitted.

  4. This article in the NYT provides the mechanism perpetuating intergenerational transfers. Exactly the same laws hold in Australia. If dear old dad passes away and leaves his 100,000 BHP shares to his son and the son sells them at a profit then the capital gains paid date from the day the son inherited the shares not from the date the father purchased them.

    A great way of avoiding tax. Moreover, dear old dad has incentives to invest in equity in order to leave what is a tax free bequest.

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