Comment on "Wealth inequality, family background and estate taxation”

Alwyn Turner’s compendious study, A Classless Society: Britain in the 1990s (2013), ends after 574 richly observed pages seemingly contradicting its title. Turner writes of John Major and Tony Blair, that ‘both had sought to create a classless society, both had failed, with wealth inequality increasing and social mobility decreasing, and both found themselves ill at ease with the kind of classless culture that emerged instead’ (574). Turner adds that Major and Blair (and before them, Margaret Thatcher) had aimed to refashion Britain as a meritocracy, where ability was more pertinent and consequential than family background and traditional networks of social power.

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Estate Taxation, Entrepreneurship, and Wealth

The American Economic Review ◽

10.1257/aer.99.1.85 ◽

2009 ◽

Vol 99 (1) ◽

pp. 85-111 ◽

Cited By ~ 63

Author(s):

Marco Cagetti ◽

Mariacristina De Nardi

Keyword(s):

Small Businesses ◽

Wealth Distribution ◽

Investment Decisions ◽

Wealth Inequality ◽

Borrowing Constraints ◽

Welfare Gain ◽

Business Investment ◽

Estate Tax ◽

Estate Taxation ◽

Fiscal Balance

This paper studies the estate tax in a quantitative framework with business investment, borrowing constraints, estate transmission, and wealth inequality. We find that the estate tax has little effect on the saving and investment decisions of small businesses, but does distort the decisions of larger firms, thereby reducing aggregate output and savings. Removing such distortions by eliminating the estate tax does not necessarily imply that everyone would be better off. If other taxes were raised to reestablish fiscal balance, those at the top of the wealth distribution would experience a large welfare gain, but most of the population would lose. (JEL D31, E21, H2)

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Unequal Opportunities and Individual Achievements: Effect of Family Background

Bulletin of Kemerovo State University Series Political Sociological and Economic sciences ◽

10.21603/2500-3372-2021-6-4-444-452 ◽

2022 ◽

Vol 2021 (4) ◽

pp. 444-452

Author(s):

Zul'fiya Ibragimova ◽

Marina Franc

Keyword(s):

Equal Opportunity ◽

Family Background ◽

Economic Status ◽

Wealth Inequality ◽

Well Being ◽

Parent Status ◽

Biological Parents ◽

Just Society ◽

Parental Family ◽

One Parent Families

Equal opportunity theory is based on the idea that inequality of individual achievements is a complex phenomenon. It is formed by two groups of factors: (1) one's own decisions and efforts (inequality of efforts) and (2) circumstances beyond one's control (inequality of opportunities). Therefore, wealth inequality caused by effort factors (1) is fair and is not to be compensated for, whereas differences in welfare caused by objective circumstances (2) are unfair and should be compensable (the compensation principle). This paper introduces an assessment of circumstances associated with family background: composition, psychological atmosphere, well-being, occupation, education, etc. Parents' education and two-parent status appeared to be the most important circumstances. Respondents who grew up in a two-parent family with both biological parents had a higher income than those who grew up in one-parent families or with one biological and one stepparent. The low economic status of the parental family also proved to affect the well-being of grown-up children. Thus, efforts to provide equal opportunities can have a long-term effect on social inequality and build a more just society.

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