Question

9. Describe how government policy changed from 1900 -2010 with respect to taxes on income and on inheritance/estates.

a. As part of your answers, discuss:

i. Overall trends in advanced countries, with specific reference to differences between the early 1900s, the post war period, and the neoliberal period (1980-2015+)

ii. How the United States and Britain differed relative to European countries such as France and Germany.

b. What are the three factors discussed by Piketty that determine inheritance flows? How can it be that inheritance flows are increasing despite the fact that people are living longer?

Answer 1

a) i) The Trend shifted the total change from post war period and the neoliberal period. To describe in the nutshell, Neoliberal period followed laissez-faire policy which is nothihg but the encouraging the role of Private Sector to contribute in the Economic Development. But it was opposite to the situation before post war period. Only Govt have only have the rights to take part in Nation-building Activities and to help in Economic Progress and restricting Economic Liberalism.

ii) US and Brittain accepted the policy of Neo-liberal Reform. But France and German Countries not accepted the policy of Neo-Liberal Reform as those countries supported the effects of Classica way of Economic Thoughts.

b) The three factors such as Inter-relationship of Wealth and Income, Difference in income levels and Prevailing Differences in Wealth are signifacantly analyzed by the Eminent Economist Piketty which determies inheritance flowr.

The Inheritance flows are increasing amidst the situation related to the people for the longer period is determined by

Ratio with Wealth at period of Death/Ratio with Wealth of Living * Mortality Rate *Increasing or decreasing ratio of capital and income.