Tutorial 3 - Is inheritance fair?

Question 1

What are the arguments against inheritance being fair?

Answer 1

1. Inheriting negative isn’t fair (Children being held accountable for parent’s crimes)
   - We can’t inherit debt either (we just declare bankruptcy) so it isn’t fair
   - Counter –> it’s an all or nothing argument (negatives can be diff. than positives)
2. Inheritance is an ASCRIPTIVE trait (not earned, gained from birth, violates meritocracy)
   - Achieved VS Ascribed status
   - Counter –> The inheritance was earned by the parents and passed on to the child (They earned it, so they can decide who it goes to)
3. Those who inherit great wealth have a major unfair advantage
   - Counter –> Parents already pass on advantages (Ex. genetics), but the difference is that those things can’t be taxed (and even then, something like talent needs to be worked for)

Question 2

What are bad arguments for inheritance being fair?

Answer 2

1. Inheritance of wealth being equal with the inheritance of talent (one violates meritocracy, the other doesn’t)
2. Inheritance tax = people not working hard (the idea that people want to pass on all of their wealth or else they won’t work, ALL OR NOTHING ARGUMENT)

Question 3

What are the arguments for inheritance being fair?

Answer 3

1. Death shouldn’t be a taxable event
   - Double taxation –> person has already paid tax while alive
   - Counter –> rather than it being a fine for dying, it can be a tax for inheriting large amounts
2. People are going to spend it (helps nobody to put in laws that encourage extravagant living)
   - Rich will spend the money in order to not pay tax
   - Counter –> buying assets will be a part of the estate tax, so the rich will probably give their money to charity to avoid tax entirely
3. Wealthy will leave Canada (they’ll become citizens of other countries to avoid tax)
   - Counter –> citizenship is more complicated than tax (must be outside Canada for half the year to be exempt from tax)