Here there be monsters (socratic) wrote,
Here there be monsters
socratic

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Lessons in simple values

The Estate Tax: Different from the holocaust.

If there is any tax that should be uncontroversial in this country it is the estate tax. First of all it only applies to the rich, exclusively. Without exception. It isn't taking money out of the pockets of hard working poor or middle class people. It isn't doing anything to them. It is exclusively targeted at the Paris Hiltons and George Bush's of the world. People who stand to make huge sums of money for doing nothing more than being born to the right family.

Secondly it is specifically not a tax on productivity. It taxes inheritors, people who may some day serve a purpose as investors but who haven't really done anything for the money they will be receiving. Claiming it is a tax on death is complete bullshit, when you are dead you lose all your property rights instantly, and you should. You really can't take it with you. Instead it is a tax that serves to slow the passing of vast fortunes from one generation to the next and the creation of an American aristocracy of wealth. It also serves to replenish government coffers that are, at least right now, beyond bone dry.

There is a myth in America that everyone who has a large sum of money has it because of great virtuous acts. It's almost like people think the only businesses rich people engage in are running hospitals for the poor and building affordable housing. This is, of course, beyond ludicrous. The fact is that wealth is not a measure of virtue. It's more a combination of luck and ruthlessness. Yeah there's often talent mixed in, and the most talented among us will frequently rise to the top, but rich people and their businesses don't just create jobs and invent new medicines. They also spew toxic waste into our rivers and water tables, they create a health-insurance industry that focuses on profits to the point where patient care in the United States is not just worse than in countries with socialized medicine but notably worse. Life expectancy here is about 3 years less than that of Sweden. If it's not because of guns and it's not because of profiteering health care then what is it? Black magic?

There are also rich people whose fortunes are accrued through outright fraud or incredibly immoral acts. Ken Lay is still rich, despite his atrocious management of Enron. The Robber Barons of the 19th century still have family fortunes passing from hand to hand in today's America. Slavery may be over, but the wealth of the plantation owners and those who did business with them was not wipes out by the 13th amendment, nor did all of it vanish in the Civil War.

That's not to say that rich people are all scum, because they're not. Many people become rich through legitimate means, and capital concentration does important things in our society. Certainly the promise of wealth inspires many people to work hard and sacrifice in a way that benefits us all. The fact is that being wealthy is a value neutral attribute. It doesn't mean you're a good person who deserves to pass everything you have on to your grandkids, it doesn't mean you're an evil bastard who deserves to have all your money confiscated. It just means you have a lot of money. The question is whether the estate tax unjustly deprives you of it (no more than any other tax) or whether it will prevent people from accruing money and by implication from working hard. That second claim is prima facie absurd. Who would say "I will only be able to pass $5 million onto my children rather than the $10 million I would like to, so why bother making money at all?" Most people who gather vast fortunes do not do so with the hopes of making their children absurdly rich after they die. They will not stop working hard just because their children will only become fantastically rich. I'm not going to address the "double taxation" bullshit because "double taxation" occurs all the time. You are taxed on your income and taxed when you spend it. Then the store you give the money to is taxed on its profits from the sale. The government gets you coming and going.

Now there are plenty of legitimate arguments that taxation in this country is completely out of hand. We pay way too much to the federal government and receive less than our money's worth in return. Inefficiency and pork is rampant, with literally dozens of federal agencies existing to tackle the same problems, and government contracts treated by free money by those who receive them.

The estate tax, though, is not the place to start cutting the fat. It is a relatively pain free tax that squeezes the super rich while leaving most people alone, and hampers productivity about as little as a tax can and still be a tax. The opposition to it is a pure P.R. game, and it's engineered by, SURPRISE, the super rich, who all things considered would rather inherit $100 million than $50 million. Now who feels like breaking out the world's tiniest violin for them while the bodies of the New Orleans drowned continue to float in a 20 foot deep pool of contaminated floodwater?
Tags: estate tax, fact, i'm right, rich, tax
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