After all we’ve done to encourage their investment during their lifetimes, the rich want more? The Senate is considering legislation to repeal the estate tax.
I’ll amend that first sentence: Some of the rich, the least patriotic, don’t want to pay estate taxes. They want to revert to a socio-economic model that pre-dates the American Revolution, making a blunt statement to society that they are entirely in this life and the next for themselves.
Patriotic and thoughtful wealthy people are not trying to find a way out of the estate tax. They recognize everything this society has done for them and support the tax. Bill Gates Sr. and Jr. are on the correct side of this debate, siding with supporters of the estate tax. Wrote Sr. in his book, Wealth and Our Commonwealth:
“How can we justify this tax? At the core of our advocacy for a highly progressive estate tax is our belief that society has a just claim on the accumulated wealth of its most prosperous citizens. This is not rooted in a belief in enforced charity or redistribution, but in an assessment of the undervalued role of society’s investment in each of us. This is substantial and often invisible.”
Indeed, most of the wealth created in this country has evolved directly out of the massive investment across society in the capabilities and competence of everyone, so that companies and entrepreneurs have vast resources to tap into, so that it isn’t necessary to invent an education for oneself if you are rich but to choose among many educational opportunities. The infrastructure that facilitates rising productivity and innovative logistics and distribution systems, the list goes on and on.
If the estate tax is repealed, it will be another blow to the fiscal and social stability of the nation, placing everything at risk, it is not just a matter of lost revenue from the estate tax.
Sebastian Mallaby writes in the Washington Post today, Reward for the Hereditary Elite . . .:
The abolitionists don’t respond to this question because there is no convincing answer. Paul Volcker, the former Federal Reserve chairman, has written that “we would be hard-pressed to find evidence that, compared with the alternatives, a reasonable estate tax significantly discourages work or innovation or savings.” In other words, killing the estate tax and raising some other tax instead would damage the economy. And that’s before you take into account the positive distortions introduced by the estate tax, such as more social mobility and higher charitable giving. Charitable bequests will fall by at least a fifth if the estate tax is repealed permanently.
It is time to stop this mad disassembly of the great country we were born in. Start by calling your Senator today to demand they vote against the repeal of the estate tax. And if you are a Democrat, send a note to Democratic Senators Blanche Lincoln of Arkansas, Bill Nelson of Florida, Ben Nelson of Nebraska and Max Baucus of Montana, who are siding with repeal of the estate tax. Tell them you are disappointed.