Mathematics of the inheritance dividend

My previous post about the inheritance dividend brought forth some comments saying that it’s not possible.

The GDP of the United States is approximately $12.5 trillion, and there are approximately 220 million citizens 18 years or older. If 18% of GDP were earmarked towards paying the inheritance dividend, this would amount to an annual income of $10,200 per adult citizen.

Currently the federal government spends approximately 20% of GDP. The majority of this spending is for social services and transfer payments. If just half of current federal government spending could be eliminated on account of being made unnecessary by the inheritance dividend, than the federal government would need to spend 28% of GDP.

A 28% flat tax on all income, with no exemptions or deductions, would cover all the required spending and would in fact result in a lower tax rate than the current top rate of 35%.

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I’ve renamed this the inheritance dividend because it puts a more positive and more accurate name on the concept.

It’s an inheritance because, just as some people lucky enough to be born to the right parents receive money without having to do any work, under my proposal all Americans inherit some of the wealth previously created by older generations of Americans.

It’s a dividend because, just as shareholders of a company receive dividends merely for their ownership, all Americans citizens are shareholders of America and therefore are entitled to receive dividend payments from the wealth generated by the nation.

Comments

[The Superfluous Man]

Your defense hinges on two assertions:
A) Inheritance is unfair
B) Birth on a nation's soil entitles one to its fruit.

The wealth generated by the parent is his and his alone to give, after taxes at least. Is his child lucky? Surely. But that is irrelevant. Furthermore, the inheritance for most is small enough to necessitate employ for life. Plainly, why does the inheritance of wealth irritate you?

And it is surely not a dividend, for our recipient has invested nothing to gain this undue sum. Our recipient may not even be an asset to his country, possibly due to immoral and antisocial conduct and thus doubly unworthy.

You indicate a concern for higher taxes, and how best to avoid them, by modifying our current policy. Were your proposal enacted, nature would reveal the inequity of foresight among men, many of whom would promptly spend as vice and license dictate. Those intolerant of inequity would raise their voice in protest, of the lack of health and shelter among the shortsighted.

Your assertions are at base dogma that are neither true nor false. They appeal to the egalitarian tendency among us all to varying degrees. And they have no backing beyond such emotions, at least as provided by you.

You remind of the articles in any given issue of The New Republic, where agreement with the author's biases is simply assumed, and the defense of such stands is not attempted. One can hardly begin to dispute the author, for the argument is predicated upon agreement with the author's biases.

[michael vassar]

Hmm... Dogma's that are neither true nor false... let's see here.

"The wealth generated by the parent is his and his alone to give, after taxes at least. Is his child lucky? Surely. But that is irrelevant."

"Our recipient may not even be...worthy" (as if 'worth' was in principle anything but an in-group/out-group measure.

And then for the part that is not even dogma, simply non-sequitor or rambling

"Furthermore, the inheritance for most is small enough to necessitate employ for life. Plainly, why does the inheritance of wealth irritate you?"

"Were your proposal enacted, nature would reveal the inequity of foresight among men, many of whom would promptly spend as vice and license dictate."

"Those intolerant of inequity would raise their voice in protest, of the lack of health and shelter among the shortsighted" (so what? More-so than today? Do they in Sweden?)

And the simply false

"our recipient has invested nothing to gain this undue sum." (nothing like, for instance, accepting years of otherwise uncompensated compulsory schooling in order to shape him for the convenience of the state, or prehaps a duty to serve in the armed forces or on a jury...)

"Your assertions... have no backing beyond such emotions, at least as provided by you."
(the ONLY assertions he made were simple 1st grade arithmatic using standard statistical data on the US. Is THAT enough backing for you?)