I know it's not a hot issue right now, but anyone who has hung around here for a while has encountered conservatives whining about the "Death Tax" (Estate Tax). While obviously this framing was chosen for it's negative rhetorical impact, I'm willing to accept it in proposing a way that the death tax can solve our economic problems.
The consensus of economists seems to be that the economy won't get better without putting people back to work, and that people won't be put back to work without some kind of dramatic government action. Given that it's also regarded as a bad idea to cut spending or raise taxes, this action would need to be paid for by borrowing. I'm not breaking any new ground here. :)
But eventually, we are going to need to pay for that borrowing. That's where the death tax comes in. We need to increase it, substantially.
The way I look at it, we allow people to accumulate wealth to allow their children easier lives. That's a fairly common sentiment at all income levels. I think it's pretty noble. But there's a difference between an easier life, and being part of the ruling class.
The maximum amount of inheritance for an individual should be based on allowing them to live without working until they die. So take the median individual income, and multiply it by the number of years until that person reaches the median age of death. For example, let's say people usually die at 78, and the median income is 24k. Let's say that Bill Gates were to die tomorrow, and he had $59,000,000,000 to be divided up among his wife and 3 children. Melinda is 47, and his children are 15, 12, and 9. That's $744,000 for Melinda, and $1,512,000, $1,584,000 and $1,656,000 for the children. Sounds like a lot of money, but it's only one-hundredth of one percent of his current net worth.
Note that I really like Bill Gates, and I think he's doing great things with his wealth. I just picked him because he was so well known.
The 400 richest individuals in the US control approx 1.5 trillion, based on googling. Let's assume the average number and age of dependants matches up with Bill Gates. That would mean of that 1.5 trillion, approximately 2.2 billion of it would be inherited, and the rest taken in taxes. So pretty much the entire 1.5 trillion. We can cut unemployment in half with 7 million new jobs. But why don't we shoot for 10 million, so those who are underemployed have a shot to get back in the game?
From what I've read, we could create 2 million jobs with a $100 billion green jobs initiative. Just for arguments sake, lets cut that in half, and say it's $100,000 per job. So if we borrow a trillion, we should be able to create those 10 million jobs. Then, when it comes time to pay that back, regardless of economic growth, we can use our revamped death tax to pay for it.
Now, there are definitely ways to get around the death tax. You can spend all of your money. That's good for all of us. You can will it to 1000x more people than you otherwise would have. Given the maximum amounts, those people will be spending it, which is also good for us. You can work hard to raise the median income and life expectancy, so your children can inherit more. Again, something which benefits everyone.
This punishes no one for their wealth. They can get as wealthy as they want. But their wealth will be of limited benefit to their dependants. Enough to not work a day in their lives, but not enough to ensure their hands remain on the levers of power. The days of being born on third base will be over.