Thought experiment

Below are options you can decide to take. You can take one and only option.

  1. Work an extra 10 minutes every day for the rest of your life in exchange for, upon your death, a guaranteed payment of $300,000 to your family (divided among them as you choose)
  2. Work an extra 10 minutes every day for the rest of your life in exchange for, upon your death, a guaranteed payment of 1/10 penny to each American plus a payment of $150,000 to your family (again, divided among them as you choose)
  3. Don’t work the extra 10 minutes every day

Which do you choose if only the first and third options are available? What if only the second two options were available?

The second option is the estate tax. If you switched from working the extra hour to not working when the ‘death tax’ was imposed, then you can start to see the economist’s argument against the estate tax (or any wealth-based tax for that matter).

Now try this one. Given your current estate plan, you will have $3,300,000 in the bank when you die. Pick one:

  1. Give a little less than 1/2 penny to each American and $1,800,000 to your family
  2. Give each American 1/2 penny and give $1,650,000 to your family
  3. Work 10 minutes less than you currently do per day and have $3,000,000 in the bank when you die, giving a little less than 1/2 penny to each American and $1,500,000 to your family

Which do you choose if only the first and third options are available? What if only the second two options were available? Did your answers change?

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7 Responses to “Thought experiment”


  1. 1 *fumiko* June 7, 2006 at 6:25 am

    Okay before I can continue to make a decision, I have some questions.
    Do I assume I only work 10min while I’m at work? For example, if i work 40hrs a week (5 days a week) that is 50min extra a week. But if i work 4 times week that is onlny 40 min a week. or does it go by 10 min every day?
    or does it matter?

    answer that first please.

  2. 2 Will June 7, 2006 at 6:36 am

    I based my numbers on an assumption of 10 minutes a day, 5 days a week, 50 weeks a year, for 35 years at $20 an hour…

    but this isn’t a trick question with hidden gotchas or anything. I mean I’m just trying to gauge your gut reaction. Work a little bit extra for a payoff to your children when you die or don’t and does the estate tax change your decision. that’s all.

  3. 3 Will June 7, 2006 at 6:42 am

    If you don’t like the 10 minutes at work thing, just replace that with a require that you have to make me a cup of coffee every morning until you turn 65. In exchange, I’ll give the money to your kids when you die.

    I’m just trying to indicate that its a very small amount of extra work. Of course, when you add all those cups of coffee over your life time, you get a substantial amount.

  4. 4 *fumiko* June 7, 2006 at 7:09 am

    Assumptions and data collected:

    298,918,147 people according to the U.S. Census Bureau.
    you retire when your 65
    you only work 5 days a week
    and you work 50 weeks a year at most

    RETIREMENT PLAN
    Gut feeling: DON’T WORK

    Option #1
    I’m 27 so (65yr-27yr)= 38yr*(5days/week)*(50weeks/year)= 9500 days (10min/day)=95000min
    $300,000/95000min= $3.15/min *(10min)=$31.50/10min

    Option #2

    1/10 of penny = $0.001
    $0.001 * 298,918,147 (assume all are Americans) = $298,918.147
    add $150,000 = roughly $448,918.147 will be given to ur children
    (this is a much better deal)

    After calculation…..
    I will take #2 because more money is better for my children.

    If we have to chose 1 or 3, i will choose 1 for the same reason above.
    If 2 or 3, 3 is what i will choose.

    ESTATE PLAN
    I’m not sure how the calculation work…. so i’m going to pick #3, just because I don’t have to work, and I can still give money to Americans and some to my family. My answer will not change with either option presented.

  5. 5 *fumiko* June 7, 2006 at 7:11 am

    correction: If 2 or 3, “2” is what i will choose.

  6. 6 ギャビン June 7, 2006 at 11:10 am

    I’m finding it very hard to feel excited about any of these options because none of them involve me getting the money to spend on myself before I die.

  7. 7 Will June 7, 2006 at 4:07 pm

    I take this to mean that you’d choose the 3rd option… work less. I mean that benefits you personally.


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