Sebastian Mallaby has a nice op-ed with the details: Reward for the Hereditary Elite
A few key facts:
1) The Estate Tax allows up to $4,000,000 (that's four million dollars) to be bequeathed tax free
2) The Estate Tax affects only the richest 2 percent of Americans
3) According to economist Jon M. Bakija and tax policy expert William G. Gale:
Estate tax repeal would have significant deleteriousThat is, charitable giving will likely fall significantly if the Estate Tax is repealed.
effects on charitable bequests and charitable giving
during life. Although estate tax reform will raise many
issues, the impact on the nonprofit sector should be a
central part of the debate.
Aside from the practical effects of increasing the deficit and reducing charitable giving, the bigger issue is a philosophical one. Mallaby sums it up nicely in his article:
The nation faces rising inequality. Since 1980 the gap between the earnings of the top fifth and the bottom fifth has jumped by almost 50 percent. The United States is by some measures the most unequal society in the rich world and the most unequal that it's been since the 1920s. What is the dumbest possible response to this? Identify the most progressive federal tax and repeal it.The nation faces the prospect that inequality will damage meritocracy. When the distance between top and bottom widens, it becomes harder to traverse the gap; people of low birth are stuck at the bottom, and human talent is wasted. What is the dumbest possible response to this? Take the tax that limits what the super-rich pass on to their children and get rid of it. Send a message to hereditary elites: Go ahead, entrench yourselves!
Mallaby is advocating economic justice and a leveling of the playing field (well, OK, reducing the grade slightly) and he's right to because a significant gap in economic equality destroys our notion of democracy, increases class tensions and ultimately makes for a society which is inherently unjust.
There is a deeper argument here, as well, that I don't have time for right now, but would like to write on in the future: what is the purpose of government and why have taxes anyway? There is a certain faction of people in the US who want most, if not all, taxes repealed. It's a silly notion, but goes to the heart of the government question. For now, let's just be intelligent, moral and just and keep the Estate Tax.
1 comment:
I question your assertions. The anecdotal myth of the family farmer losing his farm to the estate tax is a boogie man that the facts don't really bear out. See the following:
Myths and Facts about the Estate Tax
http://www.faireconomy.org/estatetax/ETMythsFacts.html
But it sounds like there is a bigger issue here - whether it is "moral" for the government to tax its citizens to pay for the services it provides. You seem to be asserting that no money should ever be taken from citizens to pay for policing, infrastructure, defense, hospitals, fire departments, education...and everything else the government provides. Well, I guess I'm raving socialist (which is probably true) but I disagree.
Even the most ardent free market capitalist finds solace in the fact that the local police force can help protect his business from being burgled and will gladly pay for that service. You may may suggest that we each pay for the services we want - you want the police to call when you call 911? Pay the local private police force. Fire at your house? I hope you've paid FireBusters their annual fee.
We, as a society, have decided that those things should be available to all citizens for the public good. Since as a society we want public services, we agree to pay for them in the form of taxation. There is such a thing as the Public Good and we all benefit from it. The price of citizenship is taxation. This is one way, as citizens care for one another. This seems a perfectly just and moral choice to me.
If, at some level, we agree that taxation is a social obligation that brings common benefit, then the question turns to how do we establish a just tax policy. I think Mallaby does a nice job of laying out the moral questions of the Estate Tax in his article, but let me quote another moral teacher (and much more) "From everyone who has been given much, much will be demanded; and from the one who has been entrusted with much, much more will be asked." Jesus - Luke 12:48
Even wealthy people agree:
Millionaires Say, "Americans Now Agree - Keep the Estate Tax"
http://www.responsiblewealth.org/press/2006/millionaires_estate_tax.html
See Also http://www.responsiblewealth.org
Post a Comment