Long Live the Death Tax?
Benjamin Franklin once wrote, “[I]n this world nothing can be said to be certain, except death and taxes.” In 1916, Congress decided to combine those two unfortunate aspects of the human condition by enacting the modern estate tax, otherwise known as the death tax — a tax on a dead person’s assets above a certain level. The rate and money subject to the tax has changed over the years, but the House is scheduled to vote today on repealing it entirely. That has class-warfare-waging Democrats, who think your money is really theirs, up in arms. They claim all the money collected is put to good use (i.e., redistributed to their constituents), we can’t “afford” the drop in federal revenue, and eliminating the death tax would only help the wealthy. As The Hill explains, “[I]ndividuals with estates valued at less than $5.43 million this year, and married couples with estates worth less than $10.86 million, are exempt.” But the economic price is a steep one. Those estates were already taxed while a person — often a small business owner — was alive, and many family-owned businesses are forced to sell just to cover the death tax bill. Somehow, Sweden, Russia and China all get along without a death tax. It’s time the U.S. did, too.
Meanwhile, Ed Kilgore, writing at Washington Monthly, explains exactly why his side loves the death tax: “In any event, progressives should be quite aggressive in welcoming this debate. They have plenty of ammunition, including the passionate arguments of the father of the federal estate tax, Theodore Roosevelt. And they really do need to counter the mythology of the small struggling business or farm being taken away by a socialistic Uncle Sam. This is all a cover for the real beneficiaries, the wealthiest people in America, who hardly need the kind of protection against taxes in death they’ve managed to secure in life. Large inheritances are and have always been an enormous factor in long-term inequality, and an offense to the presumed morality of capitalism, in which material rewards follow market utility or economic ‘virtue,’ not birth lotteries. Beyond that, it’s fun, if not especially charitable, to mock the tears of the undeserving heir at the indignity of having to share his or her windfall with the commonwealth.”
Leftist tax policy is always built on class envy. At least Kilgore doesn’t try to sugar coat it.
Update: The House voted 240-179 for repeal.