Estate Tax observation

Just today, the House of Representatives passed a bill reducing the estate tax (recently dubbed by some liberal wag “the Paris Hilton tax”). The Senate will now consider the bill.

Conservatives, including the administration, were hoping to eliminate the estate tax altogether.

I can’t help but break out in a rueful smile every time I think of the issue. Conservatives, particularly when talking about economics and welfare, like to speak fondly of the archetypical American success story: the rags to riches tale of the man who “makes it” by the sweat of his brow, self-reliance, and steely determination, who pulls himself up by his bootstraps to stand on his own two feet. Hard work builds character, and we can appreciate our circumstances more if we have to work for it, these conservatives (rightfully) explain.

But these same people are hellbent on eliminating the estate tax, a tax limited to several thousand of the nation’s wealthiest inheritors.

Go figure.

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3 Responses to “Estate Tax observation”

  1. Brian Says:

    Isn’t the estate tax just another way to legislate morality? Specifically charity. The arguments for the death tax are often that it encourages people to give to charity.

    It is best for people to earn what they have, but don’t we all want our children to have it a little better than we did? How many small businesses are going to suffer because of the death tax? I seem to remember a report of a museum for an old singing cowboy that was going to close because the family could not afford to keep it open and pay the death tax. I did not hear how it turned out.

    Of course we need a way to pay for all those able bodied people on welfare.

  2. Jennifer Says:

    Only the very top wealthiest families need pay the estate tax, and even then it’s often only the ones who believe in it, since there are ways around it (trust funds, charitable donations, etc.)… If someone has actually made that much money in our economic/business environment, then giving some back to the society is fitting. No billionaire’s child will become destitute over this. –

  3. Derek Staffanson Says:

    Brian.

    Nope, this isn’t legislating morality. It is part of “establish[ing] Justice, insur[ing] domestic Tranquility, [and] promot[ing] the general Welfare.”

    A constitutional amendment on marriage, on the other hand, is SOLELY an effort to legislate morality.

    Those trying to eliminate the estate tax often warn of the perils to small business. But the evidence doesn’t bear their dire prophecies out.

    After all, according to the report to which I linked in the blog, only 30,000 people paid the estate tax in 2004. That is a fraction of the proverbial 1% that the Democrats like to talk about. And how many of those do you think own small businesses? A small percentage. Considering the fact that we’re talking about the very richest Americans–the Waltons, Buffets, Gateses, Ellisons,–I don’t think we could honestly talk about their business ventures as “small business,” do you?

    I’m afraid your argument just doesn’t hold water.

    The non-partisan group, Factcheck.org, put the pool of estate tax payers at much smaller than the CNN report I cited:

    http://www.factcheck.org/article398.html

    If I had a nickel for every false anecdote I’ve heard about how taxes broke the heart of some earnest, hard-working, god-fearing person by taking away their house, business, or singing cowboy museum–well, my eventual children would have to pay the estate tax when I died…
    😉

    I’ll deal with the much exaggerated issue of welfare abuse in another blog entry sometime.

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