Introduction

Question 1

Definition of Income:

Answer 1

Amount of money made during a specific period (what you earn).

Question 2

Definition of Wealth:

Answer 2

Net Worth (Value of Assets - debts/liabilities).

Question 3

Which is a bigger problem: wealth inequality or income inequality?

Answer 3

Wealth inequality.

Question 4

The inheritance system perpetuates__________.

Answer 4

Inequality.

Question 5

What 9 things would result it the government took everything from someone after they die?

Answer 5

1) Incentive Argument: People are less likely to work hard.
2) It would encourage overspending during life.
3) Heirloom Argument: The government holds no value with some pieces of property.
4) Inter Vivos Gifts would become more prevalent.
5) Equal opportunity argument: government taking property still doesn’t give everyone equal opportunity.
6) Very likely would be unconstitutional.
7) Less attentive to elderly.
8) People would leave the country.
9) Violates human nature.

Question 6

How the inheritance system is good for donees:

Answer 6

1) Provides donees with better opportunities.
2) Provides psychological benefit of knowing you don’t have to worry about money.

Question 7

How the inheritance system is bad for donees:

Answer 7

1) Distorts donee’s incentives to work.
2) Erodes the notion that work is a principle of life.
* If you think work builds morals—inherited wealth is bad.
3) Shows young people they are largely unaccountable to anyone.
4) Makes donees an obvious target.

Question 8

How inherited wealth is bad for society:

Answer 8

1) Perpetuates inequality.
2) nothing to do with merits in getting that amount of money (undermines equal opportunity).
3) High concentrations of wealth.
- Rich less likely to support public amenities.
- The middle class give up when they think they can’t get ahead.