Estate Tax

I'll trust that anyone reading this blog is well-read enough not to need a primer in why repealing the Estate Tax in the face of massive deficits is not the height of sound policymaking. For your delight and amusement I will, instead, offer some thoughts out of season. Taxing estates doesn't really seem like a great plan. If I die with a $10 million estate and want to give $5 to 2 million different people, there doesn't seem to me to be a good reason why the estate should be taxed. Better to tax inheritance since the actual concern is that I'll give $10 million to my son and he'll be rich, rich, rich without ever having worked. Second, perhaps it's politically effective, but I'm disquieted by the Paris Hilton-bashing. The problem is that not every wealthy heiress is a Paris Hilton. But every wealthy heiress ought to pay tax. Implying that the decadence of Miss Hilton is somehow integral to the case clouds the issue.

Speaking of which, fuck the small businessman. This is exactly the problem posed by obsessive focus on Paris Hilton. I might be an earnest, hardworking dude who works in the store. And somebody might die and give the store to me. The store may be worth millions and millions of dollars. If so, I ought to pay tax on it. Why? Because I've just inherited millions and millions of dollars, that's why. That I'm earnest and hardworking, and that my riches came in the form of a valuable store rather than a heaping plate of gold matters not a whit. What about those sad folks forced to sell the family business? Don't cry for them. Here you are, you inherit a store worth $X. You owe $Y in taxes, with Y being less than X. So you are "forced" to sell the store, and accept "only" $X-Y as your inheritance. Note that X is a figure in the millions, and Y a small proportion of X. This is a very good problem to have, abstracting away from the fact that someone you love has probably died and this is probably a bigger concern of yours that the tax bill. This is, in other words, a non-problem. The government ought, perhaps, to facilitate some kind of lending arrangement so that people who prefer to keep the store and pay the tax down over time out of operating revenues can do so.

The last point, however, is the first in importance. Liberals should not mistake getting self-righteous about estate tax repeal for having a serious program to combat inequality or reduce poverty in America. Repealing the estate tax is dumb. Putting it back in place would be a good idea. But a serious program to combat inequality or reduce poverty would be better. Ressentiment, my comrades, will only get you so far.