Health and Social Affairs Minister Rauch has enjoyed the role of a revenant of Robin Hood since the day he was sworn in: Take from the rich and give to the poor. The fact that the story isn’t true, because the British hero actually didn’t take the wealth from the rich, but rather the loot from the tax collectors and returned it to the rightful owners, is overlooked.
Now there are contemporaries who, thanks to their diligence, their skills and their entrepreneurial skills, have success in life that is reflected in material prosperity. That many of these people don’t check the clock when they work; that many of them go years without vacation and put every cent they earn back into their businesses; their willingness to shoulder significant risks and risk being unsuccessful in their endeavors is seldom appreciated. You don’t see the many failed businesses (only a few start-ups live to see their fifth birthday and even fewer their tenth). At the center of the arrogance and covetousness of unproductive envious people are only the relatively few who make it and, thanks to their energy, their skills and the luck of the capable, actually build up significant fortunes.
Those who do not contribute to value creation – such as ministers, trade unionists or labor chamberlains – will always develop a soft spot for the expropriation of top performers or their heirs. After all, a few “rich” people face many “socially disadvantaged” whose favor it is to buy. Consequentially, property and inheritance taxes are the coddled pets of envy. There will be about free gifts to the heirs swaggered inheritances as unearned income referred to which – unlike earned income – would not be taxed; the Gap between rich and poor would increase in the absence of inheritance taxes; and eventually it would die social require justice, asking the rich to pay. The fact is: the last thing a country with the highest taxation like Austria needs is the introduction of new taxes.
Incidentally, the same applies to taxes on assets as in Frederic Bastiats parable “What you see and what you don’t see”. This gives the government the means to hand out short-term boons to its favorites (and secure their goodwill at the next election), but ignores the lost investment opportunities and unrealized output gains. In other words: The consumption stimulated with tax money is financed by investments that have not been made. Because what Mr. Rauch and all the other class warriors studiously do not address is the fact that property and inheritance taxes always result in a punishment of entrepreneurs, since large fortunes are in the companies and every finance minister shies away from expropriating small home builders or swarming out the financial police to assess the value of stamp collections, family jewelry and fur coats.
Remember that fortune inventory sizes form, an inheritance changes nothing. It is therefore absurd in this matter to income tax rate to bring into play. The fact that heirs receive something “as a gift” is also just a jealousy-driven assertion, since many later heirs had to pay for their parents’ professional commitment by making sacrifices and/or had already worked in the company for a long time. Moreover, the argument lacks any logic because the profiteers of the expropriation action (primarily the state bureaucracy, less the “socially weak”) yes nothing at all have contributed to the accumulation of the assets to be inherited. So why should they be entitled to a share of it?
The short-sightedness on which it is based is typical of the demand for taxes on assets, because of course it has a strong steering effect – and in exactly the wrong direction.
Regarding wealth tax: Anyone who has no opportunity to build up business assets without being immediately punished by the tax authorities, while the state uses the expropriated funds to finance gender officers, equality guards, quota block supervisors and other nonsense, will react accordingly. In case of doubt, a socially desirable investment that would otherwise be realized is not made, or the potential entrepreneurs realize their plans in more tax-friendly areas and disappear abroad never to be seen again.
Regarding inheritance tax: Those who cannot inherit their life’s work undiminished to their children or other persons or institutions designated by them will ensure during their lifetime that nothing remains to be inherited. You will always find knowledgeable experts who point the way forward for good money.
Unfortunately, the prevailing obsession with equality cannot be countered with arguments. For their protagonists, justice always manifests itself in material equality. Due to the diversity of people, this can only be achieved through the use of coercion and violence, which discourages entrepreneurs and destroys opportunities. The warriors for social justice always prefer collective scarcity to material inequality. The fact that some contemporaries, thanks to their ability and with a bit of luck, hit it better than others was, is and remains an unbearable impertinence for them.