Matt manages to completely miss the point about the estate tax: the truly rich don’t pay it and haven’t in the past. Charitable trusts and family trusts mean that those with over $100 million of assets (like, for example, some leftist leaning people like Kennedys, a Heinz or two, Du Ponts, Rockefellers) don’t face it. It is those who are not members of America’s aristocracy of the truly rich who do actually pay it. A few months ago Grinch went through all of this on sci.econ (yes, there are some of us who still look at Usenet) and the links are here
and here
The basic point, and one which should be understood by anyone commenting upon the subject, is that the Hewletts, Packards, Fords, Gateses and Buffets of this world do not and never have paid the estate tax and nor have the Grahams, Sultzbergers and Kennedys. It’s pretty easy to be in favour of a tax which people think will apply to you but which in fact, does not apply to you.
Now, I might even be in favour of a tax that forced the occasional Kennedy into getting a real job rather than making more laws for the rest of us but it is quite clear that the old estate tax did not do that. It only affected those in the $2 million to $ 100 million range, not the engorged plutocrats in whose name Matt is stating we should have it.
Matthew Yglesias on the Estate Tax
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2 responses
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“Now, I might even be in favour of a tax that forced the occasional Kennedy into getting a real job rather than making more laws for the rest of us but it is quite clear that the old estate tax did not do that”
What would a “new” estate tax, that did force the Rockefeller and Kennedy clans to work, look like?
I mean, how do you exempt activities of which I might approve — keeping the family farm intact, supporting bequests to charity, providing for the _education_ if not the livlihood, of generations to come — without creating huge lupeholes to be used in ways I might NOT approve? -
I’m not sure that a “new” one that does that is possible. The line about the Kennedys was more of a throw away than a valid addition to the debate.
As a personal point, not one supported by much evidence, I think that the system of trusts thrown up by avoidance of the old tax has actually entrenched economic disparities. Those trust funds kids can’t actually get their hands on the money to waste it as many of them undoubtedly would. We used to say (in the UK) “clogs to clogs in three generations” that being about how long it would take for wasstrel children to piss it all away. Multi generational family trusts make this impossible.
So, I would make a case for zero inheritance tax but the abolition of trusts: capital must be placed in the hands of those very children for them to snort, drink or divorce their way through. That would increase social mobility.
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