Inequality
We read a lot about inequality, it is a topic in almost every national election coming up. Inequality appears to be rising and most people agree that a rising inequality is detrimental to society.
A possible solution
Below, I will outline a system which I came up with (after having read Pikkety's capital in the 20th century.)
Note: I do not agree with many of Pikkety's ideas, but, credit where credit due.
The solution according to me is to have an estate tax (like stated by Pikkety), but at the rate of 100%. At your demise, all your money, down to the last penny and all your goods, down to the last pen will go to the state.
BUT
This income is not to disappear into the state's coffers, all the money is to be kept in an account, and all goods, real estate, shares, companies, etc are to be sold for money. The total amount of money which was collected should than periodically be distributed equally amongst all inhabitants of the state. (I would go for yearly, but every three months or so could be possible as well.)
What is the point off this system? According to Pikkety's book, in Western Europe the total amount of capital which is inherited every year amounts to 6000€ per person per year.
The benefits to society
Three benefits can be enumerated:
1: equal educational or business opportunities for 18yr olds
If we were to block this income for children, so that they can only access it at the age of 18 (thereby also preventing parents from using their children's money), every kid would reach the age of 18 with 108000€ in the bank. That amount of capital should give everybody the chance to pursue the studies of his/her choice, regardless of the financial situation of the parents. It is also a nice starting capital for a business.
2: A basic income implemented
Another side of this plan is that we implement a form of basic income. Everyone will keep on receiving these 6000€ per year, from the richest industrialists to the poorest people, from 1 year old children to 100 years old senior citizens. (This 6000€ will rise when the total amount of capital in the society rises (through real economic growth on the one side and inflation on the other side). This also means that those 18 year olds who waste their starting capital still maintain the 6000€ yearly income (asides of anything earned through a job) as a fallback.
3: capital eventually benefits everybody
If your neighbour makes a lot of money, or if some guy who you knew in school had a great business idea and is raking in the money, you know that in the end all that money is going to society. It will benefit your children and grandchildren as much as his.
The emotional side of inheritance
In order to mitigate certain emotional aspects of this system, I would provide for 2 limitations to the 100% rule:
1 For couples, the longest living partner gets the right to use all communal goods untill his/her death.
2 For family, and even friends indicated by the deceased, they get to buy any material goods with an emotional value, at the market price, thereby maintaining the high emotional value for them, whilst giving maintaining the economical value to society.
A reason for working
For individuals in the entire society, they have the advantage to be working for themselves, enjoying the income they earn, whilst after their death the entire society will be benefitted by their work (income taxes etc can exist like in our current day societies). They will also know that their own children will be in an equal starting position to all others, and also in the same position which they originally began from.
I realise that this is not immediately implementable, and that there will obviously be resistance to this but that is to be expected with all major societal changes. I believe that this system would provide an objective and fair system, in which people are justly rewarded for their personal achievements during their lifetime, and benefit society afterwards.
Please feel free to discuss this idea in the comments section.