Wednesday, April 27, 2005
Death and Taxes --or-- Give them the Raspberry
I heard Neil Cavuto on Fox News the other day explaining why the Death Tax is wrong. This seems to be a constant drum beat with the Fox crowd. I have always been FOR the Estate Tax, but Neil almost had me for a second -- only a second. Neil's logic was as follows, take two men making the same income, one saves wisely until his death and expects to pass it on to his heirs. The other spends all his money as he acquires it. At the end of their lives they have both been taxed the same amount on their identical incomes, but the frugal man will be taxed again upon his death.
Of course you're not really taxing the dead man, your taxing gift income to someone that is only deserving of wealth in so much as they share some common DNA with a dead person and this windfall death lottery income tax only kicks in at very high levels leaving behind, well, very high levels of money.
I have never been one to champion reparations, but with the wealth concentration that can occur from generation to generation without an Estate Tax, those that come from family lines that have been deprived in the past can certain point to those at the top and ask why they should enjoy the advantages handed to them by their forefathers in perpetuity and not make amends for disadvantages their forefathers may have caused in acquiring their elevated status in life.
Another argument against Neil's reasoning would be that people with identical incomes rarely pay identical taxes. You make choices in how you invest, purchase, give to charities, have children, and these choices affect your final tax burden. You could gift yearly to your heirs or set up trust funds of some sort that mitigate the Estate Tax sting. I have always found it unseemly how at the end of life many peoples' heirs exhibit a sort of mine-mine-mine temper tantrum in their attempt to grab assets. For many that have passed away with large fortunes I suspect they wouldn't have given a rat's ass where the money goes, it having been acquired for the sake of acquiring it, and would look with loathing and disgust as selfish offspring maneuver to grab what they can, having done nothing to contribute to its obtainment.
Take it all and give the spoiled offspring the raspberry I say!
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2 Comments:
I agree, in the event my DNA has its way, my children can mostly fend for themselves. If they cant. Tough.
By Daniel, at April 28, 2005
Why is it ever OK to complain about your own situation by point of reference to someone else's? So what if you neighbor inherited lots of money? That doesn't deprive you of the opportunities to do what your neighbor's heirs did. I am the child of a teenage mom. I studied hard, got scholarships to college, then scholarships to law school, and now hope to give as much as possible to my daughter when I die. She is growing up several income levels above where I did, but I didn't believe that I was deprived as a child. Only the vice and sin of jealosy justifies being unhappy b/c someone else received a windfall and you didn't.
Also, the death tax really does hit small business hard. The family farm, a liberal "sanctity," is disappearing b/c of the death tax. A large tract of farm land is easily worth more than death tax deduction. The family must chose between borrowing to pay the tax or selling the farm to the corporate farming interests. The reason family farms are being sold to the corporations isn't b/c farmers can't make it. It is b/c their families can't pay the tax and keep the farm when they die. The same is true for small businesses of all kinds.
You tax like helk when they earn the money. Why tax it again except to satisfy some "jealosy" impulse of the non-achievers of the world.
I actually find this issue analogous to the death penalty argument you made at my blog. Revenge isn't a good reason for the death penalty. Well, jealosy/revenge isn't a good reason for tax policy either.
By KJ, at April 28, 2005
