Inheritance and the PCT

I was picking through Chris Dillow’s advocacy of a Progressive Consumption Tax, and followed a link to this description of such a Tax. I basically disagree with Tim Worstall’s sympathy for Parents desiring to Save for their Children. The primary reason for capital aggregation lay in the accumulation of wealth for personal security; Tim advocating this security be passed on to their heirs. There is a marked degree of denial of economic incentive in this train of Thought, and a fair amount of injustice as the worst can benefit as well as the best. A secondary consideration of inheritance rights states that invariably Those who did most to aid the accumulation of wealth, are invariably disadvantaged with no participation is the distribution process. I would advocate an Inheritance Claims Court where Anyone could initiate a Claim on the Inheritance, and division of the Inheritance be distributed according to the labor involved by each Party in it’s accumulation. The right of award will be denied to the Benefactor, as he or she did not make a distribution prior to Death, but demanded the economic power of his wealth through his lifetime; thereby forfeiting his right of distribution.

Such an Inheritance Court grants previous Employees and Partners some degree of protection from unbridled patrimony damaging previously viable business practice. It assures the maintenance of economic incentive in Children, who must now gamble on whether effective claim can be made against their inheritance rights. It pressures Benefactors to divest themselves of economic power upon their Retirement from business organizations, and to properly awards grants to their Children prior to their death. Proper distribution of Assets should be conducted by the Benefactor, but only in such circumstance as to properly supervise the distribution and utilization of those Assets. Failure to fulfill such duties is avoidance of basic patrimony in the first place, so effective replacement discretion should be effected on all Parties.

The Progressive Consumption Tax, returning to the Dillow argument, has some serious pitfalls. Definition of Necessities would always endure pressure for expansion, a prime Bone for lobbyists. All Income groups use the same basic Necessities, though they be divergent in Price, they are not in Kind. The PCT thereby assures higher Income groups of a like unwarranted reduction of taxation, to the effect that higher overall Tax rates will be imposed. The PCT raises an additional barrier to lower Income groups advancing their quality of life by buying above the Necessities. The last point is that the PCT is too complicated and hard to regulate, presenting a quite at variance set of Opportunities to Economist and Politicians. The end-result would be the higher Income groups would escape even more taxation without benefit to Anyone. lgl