Iraq and the Estate Tax
In his most recent column in the New Yorker, Hendrik Hertzberg ties together two points that I've made previously in seperate contexts.
I know this sounds cynical. We'd all like to think that our political leaders pursue policies because they believe they are in the best interest of the country (even if they are mistaken). But that's simply not the case with the Estate Tax. The elimination of the Estate Tax makes no sense from a policy perspective. It is a naked giveaway to a powerful special interest lobby (the nation's richest families), and one that we as a country can ill afford.
"The [Iraq] war’s political managers have made absolutely
no effort to create even a simulacrum of equal sacrifice,
and 9/11 did nothing to change what has been from the
beginning, and remains, the Bush Administration’s top
priority, not excluding fighting terrorism: the use of the
tax code to transfer wealth to the rich and, especially, the
superrich. Next week, even as the national debt grows by
another $11 billion and military recruiters scramble with
ever-mounting desperation to fill their quotas, the Senate
will reassemble to take up the proposal, already passed
by the House, to permanently eliminate the estate tax,
thereby shifting some $1.5 billion a week—about the
same as the Iraq war—from the public treasury to the
bank accounts of the heirs to the nation’s twenty
thousand biggest fortunes."
I know this sounds cynical. We'd all like to think that our political leaders pursue policies because they believe they are in the best interest of the country (even if they are mistaken). But that's simply not the case with the Estate Tax. The elimination of the Estate Tax makes no sense from a policy perspective. It is a naked giveaway to a powerful special interest lobby (the nation's richest families), and one that we as a country can ill afford.
posted by A.L. at 10:35 PM
2 Comments:
Tax rate reductions are not a transfer to anybody nore is cutting the estate tax the shifting of money from the treasury to individuals. By reducing a tax rate you do not give something you take less of someone elses money.
The estate tax is ridiculous because it is taxing monies that have already been taxed when they were earned, thereby creating a situation in which someones rightly earned assets are taxed a second time. Secondly, the super wealthy already have sheltered their assets in such a way that those tax barely touches them. They only people hurt by the estate tax are those whose families are in the 1 to 10 million range because they do not invest in heavy estate planning and have earned their money legitimately and probably benefitted from the housing market.
Respectfully, that's rubbish. While it's true that the richest Americans can afford fancy estate planning that minimizes the amount of estate tax they'll owe; when all is said and done, they still have to pay a sizeable amount of estate tax. That's why they are lobbying so hard to have it abolished. The notion that the estate tax only significantly affects the "somewhat rich" is just flat-out wrong.
As for the idea that the estate tax is somehow unfair double-dippping on the government's part, that's just silly. The government is essentially allowing people to have lower income taxes during their lifetimes in exchange for an after-death tax on their estate should they be lucky enough to amass a significant fortune. That's an entirely fair and sensible policy. It essentially allows people to defer their taxes till death, allowing them to keep more of their money during their lifetimes.
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