to be a bit bitter about inheritance

[ShagOBite]

I had a horrible childhood, and lived in poverty. I won't get an inheritance.

Friends of mine had lovely childhoods, the best education money could buy, and as many boosts as possible to their careers. They are already much more privileged. They don't need any more money now, as their careers are ticking along nicely, and still get parental help when they can't afford a new conservatory or whatever.

Soon enough, their parents will die and leave them with even more money. That they don't need. And so the cycle continues.

I know it is bitter of me, I don't like feeling like this, but it is so unfair. I've had to work so hard to make a success of my life, it is so frustrating when others get handouts for nothing. Some of my friends have hardly ever worked, safe in the knowledge that they will be fine and dandy in a few years.

I get the argument that you work hard to provide for your kids. But if it stops them from working hard, and especially if it's 'old money' (ie. the working hard bit was done generations ago) it seems so unfair.

AIBU?

I hate this inheritance malarkey . My parents are well off and have a big house and money in the bank etc . I have never asked them for a penny . I have friends who have even said to me that I'll be ok when they go as I'll inherit loads ! .. Err no , the way I see it is the house will be sold and the money will go towards their care in their old age . It's bloody expensive ( up to £1000 a week) and they may live till they are 100. They have offered money over the years but I won't take it , we are currently having a conservatory put on which has taken 5 years to save for. Don't be bitter , just get on with your life and know that everything you have is down to you !

As a tax practitioner, may I tell you that inheritance tax is frequently described as the 'voluntary tax'.

The reason is that the poor do not have to pay it, because the threshholds are deliberately set high. The very rich do not have to pay it, because they can afford the advice to set up trust fund planning, or migrate to a suitable other tax jurisdiction. It's only the middle-class who pay inheritance tax really. Bizarre form of taxation.

I would not want the money that I have earned (and I repeat I have had no handouts) to go back to the government to finance wars against Iraq and other such obscenities. If 100% inheritance tax were to be introduced in the UK, I would very probably move to another jurisdiction. I was planning to retire abroad in any event, as many people do. I simply would not allow the state to take it all.

Our Tax System Explained: Bar Stool Economics

Everyday ten men go out for beer after work and the bill for all
ten comes to $100. If they paid their bill the way we pay our taxes
it would go something like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do. The ten men drank in the bar every day and
seemed quite happy with the arrangement, until one day, the owner threw them
a curve. "Since you are all such good customers," he said, "I'm going to reduce
the cost of your daily beer by $20." Drinks for the ten now cost just $80.
The group still wanted to pay their bill the way we pay our taxes so
the first four men were unaffected. They would still drink for free. What about
the other six men - the paying customers? How could they divide the $20
windfall so that everyone would get his 'fair share?' They realized that $20
divided by six is $3.33. But if they subtracted that from everybody's share, then
the fifth man and the sixth man would each end up being paid to drink his beer.
So, the bar owner suggested that it would be fair to reduce each man's bill by
roughly the same amount, and he proceeded to work out the amounts each
should pay.

And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four
continued to drink for free. But once outside the restaurant, the men
began to compare their savings. "I only got a dollar out of the $20," declared the sixth man. He pointed to the tenth man, "but he got $10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!"
"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"
The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

I agree that parents income has a massive impact on future success, but there is no way that money buys the means to create your own happiness. Sorry, but I could not disagree with that statement more.

Money buys financial security, nothing more. It does not provide a stable loving upbringing, it does not provide good health, it does not provide an attitude that has the power to make someone see the good things they have.

You can be a billionaire and still suffer grief, disability, stress, depression, chronic ill health, mental illness, childhood abuse, addictions etc etc.

Money might make those things slightly more comfortable, but it does not buy happiness.

helloclitty I bow to your superior knowledge and story. Superb thank you for that.

Infact, the wealthy are often far more afflicted with a lot of those problems than many people realise. Look at poor old Whitney. So much talent, so much money and yet so much destruction. She isn't alone.

Love that post Helloclitty!

No money doesn't vbuy happiness. But all the stats show that people who are vwell off are much more likely to have good health, to live longer, be less likely to divorce, have a better education, etc etc.

poohbear - It is well documented that the kind of people who seek to become famous are often those least equipped psychologically to deal with it. Stats show that bpeopel who are well off are more likely to be happy than those who are poor in the UK

Shag even if things were theoretically equal in this country so everyone started from the same place it wouldn't stay like that. If your parents and my parents had started in the same place, judging by what you say about your childhood, they wouldn't have ended up in the same place because for various reasons (possibly beyond their control) your parents would not or could not make the most of the opportunities available to them. Consequently, despite my mother's early death, I would have started my journey from a more stable place than you making it easier for me to make the most of the opportunities out there etc.

I was feeling a bit annoyed by some of the jealousy and assumption that others have easier lives but I think you probably have a fair bit of anger about your childhood to work through and maybe its easier to turn the anger on those you see as having a softer time of it.

Inheritance and financial support is only one part of the picture. Its getting home in the evening to a warm house with food in the cupboards so you can concentrate on doing your homework. Its having someone to bounce ideas off when you have a difficult decision to make. Its having someone there who you know will back you up as best they can if things go wrong, even if its only tea and sympathy. I'm not sure you had any of those things and that can make life feel really tough.

Statistics are about a general population though, and what actually matters is individuals.

You are right, but even good health and a long life and a good education do not mean happiness.

I'd rather be happy until my sixties than be unhappy until my nineties. I'd rather be happy than have a degree. Id rather be happily divorced with no money than in an unhappy marriage with a healthy bank balance.

Money also buys pointlessness.....

I have saved and lived within my means and worked hard and finally got the job I have been working for all my life. However, my FIL died around 6 years ago and as a result the mortgage, we painstakingly put together the deposit for, will now be paid off over night. I feel (as well as that I would rather my DD had gotten to meet her grandad) that my role in life to provide for my children has some how been circumvented. That there is no point to my existence any more. Of course that might be the PND talking...I find it hard to tell some days.

I think that rich kids that have never had to work have also been deprived of the opportunity to have to work. What is the point of a life spent going out on bender after bender and then dying too young....

What Quatrro and HelloClitty said.

I started off with nothing and in fact had help from the government when we needed it so I am happy to pay 50% tax rate on my income . So I do that and any income I don't spend and park in a bank account is also taxed at 50%. Fair enough. A few years ago the money we bought a house, so we basically took some of the taxed earnings that we had saved and paid the stamp duty. (Admittedly I bitched and moaned, but again fair enough).

However.....Do you really think that I (and others like me) would hang around or not do tax planning if I couldn't pass on what I had saved out of my taxed income to my dc and had to return it all to the government? .

My DH grew up without much money at all. (Think beans on toast for dinner as that was all they could afford.) He and his brother both earn plenty now. They had the following advantages:

1. Assisted places at school so they could go to the good grammar school even though his parents couldn't afford the fees.
2. Free university and grants while they were there.
3. Parents who supported them emotionally and felt that education was the way out of poverty.

I think that investing in free, excellent education for all is the best way to create a level playing field. Taxing inheritance tax 100% would just make more money for accountants and solicitors working out how to avoid it.

I like your beer story, helloclitty, and it's a neat explanation of how income tax works. In the UK at present, though, the super-rich don't pay 59% or even 10%. It's more like 3% and, in some cases, zero. That is where I take issue, not with uneven wealth distribution amongst the 99%. Favouritism to the 1% causes greater impoverishment to everyone else.

I know it's not the topic of this thread but, since you've raised it, the difference between tax avoidance and tax evasion is superfluous nowadays imo. Your rich beer drinker helps the others by paying taxes. If he claims he doesn't have to pay in the pot because he owns the brewery, it becomes a very different story.

entropygirl - I mean this kindly, but that is almost certainly the PND talking. Children need many things, and can benefit from countless more. Think of all the wonderful opportunities and experiences you will be able to offer her, because you have had the pressure of providing a roof removed.

I honestly would, in a perfect world, take everything off everyone when they died. I find it grossly unfair that people inherit everything off the back of their parents' hard work.

I know that this would never work in reality and that part of the reason people work hard is to provide for their children, but it really irritates me.

IUse - fair point. My post deserved that as it was badly phrased. I didn't mean to say that money buys happiness itself, which you've correctly took issue with because it doesn't. What I meant was that money enables you to create and take opportunities that can contribute to happiness. The absence of it makes it much more difficult to find happiness. No matter how much you love your children and have a great relationship with them, for example, you will find it difficult to find happiness if you are struggling to feed them, stressed out beyond all belief because you cannot pay the rent, etc.

And what garlic said.

I know lesley it is so sad, there are also documented cases of people who have always had money and still not been able to cope - the 7th Marquess of Bristol and his family being a valid case in point.

Actually those lord types seem to let it happen to them all the time.....on this I shall comment no more as I might get me knickers in a twist

Op -I understand how you feel to some extent although did not experience the extreme poverty you talk about.

I think your feeling maybe stems from a lack of mobility, that in the past funding for higher education, renting/ purchasing a home was more achieve able whereas now there seems to be a stark divide between those with plenty of disposable income and those with no room for manoeuvre at all.

Access to home ownership, higher education and the professions is so much more limited. And I think many people are unaware of that.

camdancer there were / are NO "fees" pertaining to Grammar school. That was the point. It was supposed to be a meritocratic system so that rich or poor could access it Plenty of people in my past extended family couldn't afford to pay for the uniform so they didn't go.

And beans on toast is a perfectly balanced and healthy meal.

I agree about the decline in social mobility

It's been caused by lack of freely available academic education IMO, and not just at tertiary level but at secondary level as well.

Bit late coming back to the thread but DamnBamboo thanks for your reply about the debt issue, and thanks Alibaba for the info about house clearers etc - the issue weighs heavy on my mind. My mum has wanted to move for years anyway as the house is horrible, dad won't move... so many issues there so in a way it's not about the money anyway.

Bit cheeky of helloclitty not to credit her source for the Bar stool economics. It's David R Kamerschen's, by the way.