The Iron Yuppie

Last night I heard an opposition view of the Estate/Death Tax on Marketplace. It struck me as being outright wrong in some places, and I had to respond on here.

• "For 90 years now, the death tax has never prevented billionaires from passing on their wealth to children and grand children. These families have legions of tax accountants and lawyers help find clever loopholes around the estate tax." - So because there are loopholes, you throw away the tax? Why not just close the loopholes? Bizarre logic.
• "Most Americans oppose it because they believe it is fundamentally unfair to tax people twice on income that was already taxed when it was earned." - Maybe most Americans oppose it (which should be logic enough to get rid of it... we are in a Democracy). But I'd like to see that study... "Do you dislike every tax the government takes from you?" is very different than "Would you prefer to get taxed now or taxed after you die?" and very different from "Would you prefer to go without taxes or without social security?"
• Then he goes on to mention Russia and Sweden's policies about repeal of the tax. Remind me when we started taking direction from them? If we did, wouldn't we have avoided invading Iraq? Then he goes on to mention about Karl Marx (!) and the Communist Manifesto (!!). I believe it's Godwin's law that as discussion time increases, the likelihood of someone mentioning Nazi's (as a counterargument) increases to 100%. I wonder if there's a corollary for communists.
• “One recent study suggests that the tax discourages investments in small businesses” – Um, what?? ‘I’m sorry, I’d like to start this new business, but I’m worried about the taxes my kids will pay when I’m dead and they’re inheriting it from me.’ You’ve got to be kidding me.
• “It encourages older Americans to spend down their assets before they die.” – Again, I’m not sure what the source is that says that people with $1.5 Million are racing to spend it all before they die. Besides, even if they WERE spending it wouldn’t that be a BOON to the economy? How does someone inheriting millions of dollars help the economy?
• Finally, “the death tax causes all this economic damage but only raises 1.5% of all federal tax revenues.” –According to this, the revenues total $123 Billion (at its peak in 2001). This would cover the nearly the entire budgets of NASA, Education and Transportation combined. Are you really ready to throw all that out? And remind me again what the economic damage is?

On the other side of the coin is Daily Kos who goes into some choice comments about the hyper-rich. I am not opposed in the least to someone being hyper-rich… I want to be one of them! On the other hand, I certainly do not have any problem with the rich paying their fair share. But that’s what it should be… a fair share. No one who makes more money than me in a given year should pay less in taxes, and vice versa. Kos points out that someone making $100 million pays as much in percentage as someone making $50k. I don’t have any problem with that… if the $50k person pays 25%, they’re paying $12.5k. If the $100 million person pays 25% they’re paying $25 million. I think I can live with that. It’s the concept that someone is able to weasel out of the system where it becomes galling. Just make it nice and progressive… that’s the only fair way.

D

posted by Iron Yuppie  # 7/29/2005 12:09:00 PM