Quora Answer: Should Inherited Wealth be Abolished?

The following is my answer to a Quora question: “Should inherited wealth be abolished?” 

What do you mean by abolished?  Are you saying that the wealth should be seized by the state, and redistributed?  That sounds like Communism.  Are you saying that the wealth should be seized by the state and managed?  That sounds like a kleptocracy.  Marxism flirted with these ideas, and in 80 years of Communism, it never worked.  One group of wealthy was simply replaced with another. 

Countries have an inheritance tax because it is unhealthy to have extreme wealth concentrated on one segment of the population, while the rest of the population is in poverty.  That wealth is garnished, and given back to society.  When the divide between the haves and the have nots is too wide, it inevitably leads to instability and regime change.  We all want to avoid that. 

Seizing all that wealth, however, would create bigger problems.  For one, the people who gather that wealth, the most entrepreneurial, the connected, the influential, will simply leave the country.  They have the means to.  There will be capital flight on a massive scale, and it will crash the economy. 

Putting such an insane law through Parliament would be impossible, unless there are a confluence of unlikely events that make it possible.  The people who have that sort of wealth would have that sort of connections to challenge the passage of such legislation, and fund legal action through the courts as well.  A government that decides to wage war on an entire class of its wealthiest citizens is a short-lived government – unless it is some form of dictatorship.