Milton Friedman on Wealth Redistribution
In light of the Occupy Wall Street protests, it is worth listening to what Milton Friedman had to say when asked about the need for wealth redistribution (HT to Mark Perry):
Friedman explains that the only effective way to redistribute wealth is to destroy the incentive to have wealth. He also answers the question about taxing inheritance at 100 percent by making the point that wealth creators tend to be motivated by the prospect of leaving wealth to their children. If you impose a 100 percent inheritance tax, you encourage wealth creators to consume all their wealth, which would in turn reduce savings and investments, with negative consequences for economic growth.
This idea of leaving a better world for our children is an appealing one, and it makes me wonder how most people feel about the fact that, without reforms, we are likely to leave our children
a world of debt.