Fri, April 26, 2024 at 20:41

• 

  Kang-hoon

  • Hello Annie.

  • Today's news is about a massive wealth transfer from the baby boomer generation to their younger counterparts.

  • This transfer, estimated to reach $90 trillion in the US alone, has sparked a political debate on inheritance taxes.

  • 
• Annie

  • Wow, $90 trillion?

  • That's a huge amount!😲 But why are they debating about inheritance taxes?

  
• 

  Kang-hoon

  • Good question.

  • The Organisation for Economic Co-operation and Development (OECD) recently suggested that redesigned inheritance taxes could help governments redistribute wealth, boosting equality and federal revenue.

  • 
• Annie

  • Hmm...so it's like killing two birds with one stone.

  • But isn't inheritance tax unpopular?

  
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• 

  Kang-hoon

  • Indeed, you're correct.

  • Inheritance taxes are not popular and their potential impact on the economy and society is debatable.

  • 

  • Aswath Damodaran, a professor of finance at New York University, argues that an inheritance tax doesn't fix the core problem of an economy in decline and an ageing population.

• Annie

  • I see...🤔 So it's not just about the money, but also about the state of the economy and society.

  
• 

  Kang-hoon

  • Exactly.

  • Furthermore, Damodaran points out that you're taxing income that's already been taxed, essentially resulting in double taxation.

• Annie

  • Double taxation?

  • That doesn't sound fair at all!😠

  
• 

  Kang-hoon

  • Many share your sentiment, Annie.

  • Damodaran also warns that this could lead to a situation where nobody saves and the government acts as the pension fund or wealth creator of last resort.

• Annie

  • That sounds like a dangerous precedent.😨 But then, is this news good or bad?

  
• 

  Kang-hoon

  • From a short-term perspective, it can be seen as bad news.

  • If the government decides to increase inheritance taxes, it could discourage savings and investment, potentially slowing down economic growth.

  • 

  • However, it's important to note that this is still a matter of debate and no decisions have been made yet.

  • Upon comprehensive consideration, this news is perceived as a 😱Bearish.