Thomas piketty, a prestigious French economist, argues that the importance of inheritance as a factor of accumulation has increased in recent decades throughout the world. In turn, he projects that the twenty-first century will be marked by an increase in the total volume of capital transmitted by inheritance and in this flow of capital as part of national income.
To this greater importance of hereditary receptions is added the unequal distribution in favor of those who already have wealth. As expected, the possibility of receiving a large inheritance depends on the social class to which one belongs. In this sense, the German sociologist and political scientist Szydlik points out that with the receipt of an inheritance it applies “The principle of Matthew: to the one who has, it is given. The wealthy receive even more wealth, the prosperous get rich, the rich even richer.
The importance of this institution and the unevenness of its distribution is confirmed in recent studies that show that inheritance is one of the main factors of concentration of wealth among the richest part of the population and of its intergenerational reproduction. Therefore, the inheritance of wealth is a notable component of the total inequality that characterizes our societies.
The great inequalities of wealth generated by inheritances cause serious social and political problems in contemporary societies. In the mid-nineteenth century, the philosopher and economist Stuart Mill He highlighted that unrestricted hereditary transmissions cause huge concentrations of wealth that turn into an improper political power that threatens democracy. In this sense, Economic inequality is strongly linked to the lack of political participation, as well as to the lack of influence and representation on the part of sectors with fewer resources.
In turn, when capital concentrations exceed a certain level, equal opportunities are at risk. Equal opportunities require that all people have roughly the same chance of accessing a quality education and good jobs. If there are few families that concentrate a large amount of economic resources, the possibilities you have of accessing the best schools, universities and jobs will be several times greater than those of the rest of society. John Rawls, one of the most important political philosophers of the twentieth century, argued that equal opportunities and democratic institutions are incompatible with high levels of economic inequality.
In addition, there is something that differentiates the great wealth resulting from personal activity from those products of millionaire family inheritances, merit. Valuing merit implies that people should be held accountable for their decisions and not for their circumstances. Receiving or not inheriting assets is one of these circumstances, insofar as it does not depend on the decisions and efforts of the beneficiary, but on the good or bad luck of having been born into a wealthy family. What is the merit of the descendants of billionaires that makes them worthy of large inheritances or donations without having to pay for them? For the entrepreneur Warren Buffet, one of the ten richest people in the world according to Forbes, “Without the inheritance tax there will be an aristocracy of wealth, which means that the ability to control the nation’s resources is passed on based on inheritance rather than merit.”
Taking into account the economic, social and political consequences that the unrestricted transmission of assets by inheritance causes, a good part of the countries of the world have an inheritance tax in their legislation. In our region countries like Colombia, Chile, Brazil and Ecuador are some of those who apply this tax. This tax is even more common in central countries where it has aliquots that exceed 30%. Among others, United States, Belgium, Germany, France, Denmark, Spain, United Kingdom, South Korea and Japan present this tribute.
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In recent years, various academics, public figures, and organizations have championed the inheritance tax. Joseph Stiglitz, Nobel laureate in economics, warns that if the United States reduces the inheritance tax it currently has, “it is very possible that the country will increasingly become a country of a hereditary oligarchy.” In a letter signed in 2017, hundreds of American billionaires warned Congress that lowering the inheritance tax would vastly increase economic inequality and imply major adjustments in state welfare policies. For his part, heThe Organization for Economic Cooperation and Development (OECD) in its latest report strongly recommends the implementation and strengthening of this tax for reasons of equity and efficiency.
What characteristics should the inheritance tax have?
The OECD establishes that this tax has to present a progressive rate that especially affects large assets. In turn, as the main objective of the tax is to reduce economic concentrations, it must tax the person who receives an inheritance and not the transferor. Finally, you must have a non-taxable minimum high enough to allow most people to be exempt from tax.
Argentina has the possibility of taking an important step towards a more efficient and equitable tax system. The tax on large inheritances will bring us closer to the meritocratic ideal and will allow us to reduce the great concentrations of wealth that make up dynasties of political, economic and social power in our country.
In turn, the proceeds from this tax may contribute to public policies that reduce the high levels of poverty and indigence that we suffer. For this reason, a progressive tribute to the free reception of goods today implies a significant advance towards the construction of a more just society.
Lawyer and doctoral fellow from CONICET.
Source From: Ambito
