The Road to a New American Aristocracy
News at HomeLegislators across the nation are considering eliminating estate taxes for the wealthiest Americans, even as we face budget crises and growing debt.
Yet estate taxes, and other rules governing the transfer of wealth between generations, are vital to the American experiment. They help ensure equal opportunity and prevent the rise of a small set of families whose money and political power separate them permanently from the rest of us. Estate taxes protect us from the dangers of aristocracy.
Why worry about aristocracy in an age of democracy? Aristocracy conjures up visions of bygone ages when noblemen believed that the blood in their veins distinguished them from the common herd. Despite the rhetoric about property rights that has dominated the current debate, the real question is whether we should allow the children of the super rich the status of nobles by inheriting their parents' wealth and the social and political privileges that wealth confers. The movement to repeal estate taxes is in reality nothing less than an effort to establish an American aristocracy.
The fight against aristocracy goes back to the nation's founding and is part of our democratic tradition. Nobody feared aristocracies more than Thomas Jefferson. In Jefferson's day, aristocracies were far-reaching. European nations had powerful nobles who inherited their status, promoted their own self-interested politics and often considered their interests to be superior to those of the majority. They demanded legal privileges unavailable to others. In contrast, Jefferson hoped to create a society in which all citizens were considered equal.
Americans today agree that hard work ought to be rewarded, but inheritance of great wealth and power works against this core American value. Jefferson hoped to replace a permanent aristocracy with what he called a "natural aristocracy" of talent and virtue, but he recognized this meant giving the children of each generation an equal start.
Jefferson argued that the best way to prevent an aristocracy was to limit inheritance. In a 1789 letter to his friend James Madison, Jefferson wrote that "the earth belongs in usufruct to the living" and "the dead have neither powers nor rights over it" -- that is, the dead should not control the opportunities of the next generation. Every child deserves a fair chance.
The estate tax's critics claim that it violates property rights, but how can the dead have a right to property? The right to property emerges from labor, the nation's founders believed. With death, that right returns to society. "The portion occupied by an individual ceases to be his when himself ceases to be, and reverts to the society," Jefferson told Madison. It is up to citizens to determine what and how much children inherit from their parents.
Jefferson's strategy to prevent aristocracies was to mandate partible -- that is, divisible -- inheritance, apportioning estates equally among all one's children. In Jefferson's time, this was a radical proposal. In the 18th century when a man died his estate often passed complete to his eldest son. This form of inheritance, known as primogeniture, sustained aristocracies by keeping family wealth intact over generations. Partible inheritance, Jefferson hoped, would force wealth to be divided successively over generations.
By the 1830s America had become one of the most egalitarian societies in world history, at least for white men. Alexis de Tocqueville, an acute observer of American democracy during the Jackson era, attributed the nation's equality to partible inheritance. Dividing estates, he wrote in "Democracy in America," creates a "revolution in ownership" that "works upon the very soul" of American society. Rather than inherit their status, Americans must earn it anew.
Yet in the 1830s equality was threatened, as it is today, by the growing income and wealth gap between employers and workers. If such inequalities could be maintained over generations in the same families, the rich would think of themselves as a class apart. "What is this, if not aristocracy?" Tocqueville wondered.
In words that resonate today, Tocqueville speculated that "if permanent inequality of conditions and aristocracy are ever to appear in the world anew," they would come from the growing distance between the few and the many. Jefferson was confident that partible inheritance would limit intergenerational inequality. By the 1830s it was clear that we would need to do even more.
As old-fashioned as the word aristocracy sounds, the danger is current. The issue is not just money but how the wealthy relate to society. A permanent elite, as Jefferson feared, might not concern themselves with the majority's welfare. At a time when the gap between America's rich and the rest of society is growing, we must avert an American aristocracy by preventing the richest families from perpetuating their wealth.
Estate taxes reward hard work and talent and protect civic equality. They promote America's most enduring values. We can't afford to repeal them.
Related LinksThomas Reeves: On Plutocracy
This piece was distributed for non-exclusive use by the History News Service, an informal syndicate of professional historians who seek to improve the public's understanding of current events by setting these events in their historical contexts. The article may be republished as long as both the author and the History News Service are clearly credited.
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Sheldon the Duke of Otsego and Warren - 7/9/2007
I wish to draw the author's and reader's attention to the fact that there is in fact a new American Aristocracy. For more information see the discussion group at http://newamericanaristocracy.freeforums.org
Sheldon the Duke of Otsego and Warren - 7/9/2007
I wish to draw the author's and reader's attention to the fact that there is in fact a new American Aristocracy. For more information see the discussion group at http://newamericanaristocracy.freeforums.org
Sheldon the Duke of Otsego and Warren - 7/9/2007
I wish to draw the author's and reader's attention to the fact that there is in fact a new American Aristocracy. For more information see the discussion group at http://newamericanaristocracy.freeforums.org
john crocker - 8/11/2006
"Btw, the fact that no one has a precise blueprint for how anarchy would work is no argument against it."
Do you really believe that dimantling government with no working plan for the next system makes any sense whatsoever?
The chaos that inevitability ensues the downfall of government is arguement against it.
The lack of any workable plan to end that chaos and replace it with a working system is arguement against it.
Your innability to come up feasable answers to the questions I have posed as to how this system would deal with problems inevitably faced by large groups of people is further argument against it.
john crocker - 8/11/2006
How would people be protected from the tyranny of a stronger neighbor?
What would prevent rampant fraud (the return of snake-oil salesmen etc.)?
How would contracts be enforced?
How would the criminal justice system work?
How would the civil justice system work?
Where would the incentive for invention lie without protected patents?
How could anyone be sure of the safety of food, medicines or consumer goods?
How exactly would this anarchist society protect itself from aggressive neighbors?
"Btw, the fact that no one has a precise blueprint for how anarchy would work is no argument against it."
At this point in time in the history of the anarchist movement to have no blueprint is an indictment.
Got to go, but start with this.
William J. Stepp - 8/10/2006
Any tax is immoral. And a crime.
Stable government? Stable tax-robbery? Please.
As George Selgin pointed out, the only stability in life is in a graveyard.
In briefly describing anarchy, you didn't actually make a criticism of it. For how it might work, see Rothbard, "For a New Liberty."
Btw, the fact that no one has a precise blueprint for how anarchy would work is no argument against it.
Chris Columbus didn't have one for how the New World would work either.
Didn't stop it from working, except for the State.
See David Friedman's work on anarchy in Iceland. There's another book by Jesse Byock (sp?)on
legal institutions in pre-state Iceland.
I can't think of one example of government working well.
Your last point is also incorrect.
You think, like lots of people, that a cut in the government's revenue of x (from say a cut in or elimination of a certain tax) means that the lost revenue is made back somewhere else, by raising taxes on other people, etc.
Aside from the fact that it's not the government's money and in fact is stolen money belonging to taxpayers, that isn't how the revenue system works.
The crime state doesn't start with a topline revenue figure of X and work backward, adjusting someone's taxes upward by A to make up a cut after someone else's taxes are lowered.
Instead, the topline figure is simply the sum of all the stolen tax loot during an accounting/fiscal period.
While pundits and Congressmen talk about "revenue neutrality" in the tax law, that's simply a way of putting a moral figleaf, under the guise of a weird social science and accounting bs, on what is a monstrously criminal act, the act of tax robbery.
If the state lowers taxes by X and then seeks to raise them by X to maintain "revenue neutrality," (1) it can't actually do this, because there are too many variables for this to work in the real world, including the inherently unpredictable rate of econonomic growth; and, more to the point, (2) lowering taxes is always a moral act, while raising them is always immoral.
john crocker - 8/10/2006
I did not abandon any claim about the estate tax or its morality. It is no less moral than any other tax.
What I did was respond to your even more outrageous claim that anarchy is preferable to a stable government.
I see you failed to respond to the bulk of my criticism of anarchy.
The only military would be private militias.
Criminal and civil justice would be handled privately.
Contracts will be enforced privately.
No enforceable patents would exist.
All roads will be built privately.
How precisely do you think this would work?
Can you cite any example of anarchy working as a functioning ideology for any society?
PS - The estate tax even with its higher exclusion of 3.5 million per person is projected to raise 776 billion between 2012 and 2021. In the real world this money will come from somewhere and it will most likely come from people who are less able to afford it.
William J. Stepp - 8/10/2006
The dysfuntionality of Afghani institutions is not a mark against anarchy. If anything, it shows that the state, specifically US foreign policy, doesn't work.
I see you've abandoned your lame defense of the morality of the estate tax ripoff.
john crocker - 8/10/2006
So the only military would be private militias.
Criminal and civil justice would also be handled privately.
Contracts will be enforced privately.
No enforceable patents would exist.
All roads will be built privately.
How precisely do you think this would work?
If you want to see how well anarchy works in practice take a look at Afghanistan outside of the immediate viscinity of Kabul or much of Sub-Saharan Africa. There is a good reason that most people give up anarchism after they graduate and enter the real world.
William J. Stepp - 8/9/2006
Anarchy works at least as well as the state, which is a cesspool of theft, corruption, and war.
"Work is not a state function."
--Eric Brewer, libertarian physicist friend, recasting the 2nd law of thermodynamics in a libertarian light
Initially I said only that the estate tax should be abolished. I made the latter point in response to
something you said.
I should have said in my first post that all forms of taxation are theft, including the estate tax.
Government did 100% of what the government did before the estate tax was passed. This would remain true if the tax were to be jettisoned. It adds relatively little to the state's coffers. Repealing it would not entail raising other taxes--why not cut spending by the amount it reduces the state's tax-theft take?
Public financing of elections is a nonstarter. The courts have found a first amendment right to finance political campaigns privately, even if they have circumscribed that right with morally indefensible restrictions. Why should the taxpayers pay for this nonsense?
The way to separate politics and the economy--a laudable goal--is to get rid of politics. There would be no political elections under anarchy.
I agree with your comment about having the government stop enforcing patents and contracts; money production should be privatized, as it once was.
What's the problem with letting people give away their money to whomever they want? This is generally consistent with how the law works now, the estate tax aside.
john crocker - 8/8/2006
"While corporate backers must be perpetually involved in the electoral process, the powers that be in government bureacracies are lifers. Not only that, but, by controlling educational institutions, they assure a kind of intellectual hegemony that crystallizes their plutocratic position."
Did you seriously just call government bureaucrats plutocrats?
john crocker - 8/8/2006
"I am an anarchist; government-run/-financed infrastructure should be privatized, where it shouldn't be abolished."
So the only military would be private militias. Criminal and civil justice would also be handled privately. Contracts will be enforced privately. All roads will be built privately. How precisely do you think this would work?
"I merely said the estate tax should be abolished."
You have said a lot more than that. "All forms of tsxation are theft, including income, sales, and property taxes," is the comment I was responding to.
It is true that very few pay it and it costs the loss of virtually no family businesses or farms and it is also true that it raises considerable money for the government. Regardless of your desire for the dissolution of the government it will continue and the money to run it has to come from somewhere. If the estate tax is abolished the money will have to come from somewhere else and that somewhere else will be from people who can less afford to pay it.
"You can get rid of plutocracy by separating the state from the economy, the way we separate church and state."
The first step toward this would be public financing of elections. As long as more money means a louder voice in politics; the economy and the state will be entwined. Another step would be removing the government's hand in enforcing patents and other contracts. Yet another step would be for the government to stop producing legal tender.
"What matters is the right of the giver to give his money to whomever he wants."
Wow.
john crocker - 8/8/2006
"I am an anarchist; government-run/-financed infrastructure should be privatized, where it shouldn't be abolished."
So the only military would be private militias. Criminal and civil justice would also be handled privately. Contracts will be enforced privately. All roads will be built privately. How precisely do you think this would work?
"I merely said the estate tax should be abolished."
You have said a lot more than that. "All forms of tsxation are theft, including income, sales, and property taxes," is the comment I was responding to.
It is true that very few pay it and it costs the loss of virtually no family businesses or farms and it is also true that it raises considerable money for the government. Regardless of your desire for the dissolution of the government it will continue and the money to run it has to come from somewhere. If the estate tax is abolished the money will have to come from somewhere else and that somewhere else will be from people who can less afford to pay it.
"You can get rid of plutocracy by separating the state from the economy, the way we separate church and state."
The first step toward this would be public financing of elections. As long as more money means a louder voice in politics; the economy and the state will be entwined. Another step would be removing the government's hand in enforcing patents and other contracts. Yet another step would be for the government to stop producing legal tender.
"What matters is the right of the giver to give his money to whomever he wants."
Wow.
Jason Blake Keuter - 8/8/2006
It is better that the receiver of family income squander it than the government confiscate it and squander it. If Paris Hilton fails to capitalize on her advantages, then someone smarter who has inherited less money will fill the void (no pun intended -hard to avoid them when using Paris Hilton's name). And in using their money productively, they will benefit far more people than government tax and squander ever will.
Jason Blake Keuter - 8/8/2006
Nancy,
These distinctions can't be made. Paris Hilton is a Horatio Alger in reverse: hardly emblematic. If anything, history teaches that once you identify a class enemy, and then fool yourself into thinking that what's bad for them is good for everyone else, you will need to broaden those who are subject to confiscation. It wasn't long, after all, before a Kulak simply meant enemy of the state.
It is the height to put a dollar amount on what constitutes "legitimate" wealth. How is it that someone who makes $200,000 per year is not part of some movement of creeping aristocracy but someone who makes $300,000 is? How is it that someone who starts with $100,000 a year and shrewdly invests to create an inheritance for his children is not virtuous while some who squanders their way below the tax threshold is?
Further, if we wish to look at this as a question of principle, then shouldn't we tax all people who don't really deserve what they have at a higher rate? Aren't there a few professors out there shamelessly using thirty year old lecture notes that should pay more? And wouldn't some of their income go a long way towards paying for the government agencies charged with determining whose been naughty and whose been nice?
Jason Blake Keuter - 8/8/2006
Actually, the real Aristocracy is government aristocracy. Passing wealth on to family has always been more than perfectly compatible with democracy and liberty. Empowering government, however, has always been viewed as incompatible with liberty and democracy. While corporate backers must be perpetually involved in the electoral process, the powers that be in government bureacracies are lifers. Not only that, but, by controlling educational institutions, they assure a kind of intellectual hegemony that crystallizes their plutocratic position. In keeping with true aristocratic fashion, they produce little of tangible worth, are insular in outlook and relay on legal (not electoral) mechanisms to maintain their place. Further, in true aristocratic fashion, they pour derision upon the unthinking voters whenever they voice anti-government sentiment. To attack the government is to attack the very foundations of civilization and return us all to the Darwinistic barbarism of the 1920's!
Of course, this talk of class plutocracy is the same old Marxist cant: if the expropriators aren't expropriated it is inevitable that they will use their wealth to turn democratic government into their lap dog hand-maiden. Bullshevik.
William J. Stepp - 8/6/2006
I am an anarchist; government-run/-financed infrastructure should be privatized, where it shouldn't be abolished.
I don't propose going back to a pre-anything social structure; I merely said the estate tax should be abolished.
Presumably you're not naive enough to think the estate tax actually changes any social structure, even if you're doing cartwheels trying to show almost no one pays it, and it doesn't cause family-owned busiesses to be liquidated to pay the tax.
I get a kick out of the taxes proponents, who want to have it both ways. They think almost no one pays the tax and that it has no deleterious effects on business. On the other hand, they fly into paroxysms of rage against anyone who wants to abolish it, becuase doing so would be against their vision of a society founded on compulsory egalitarianism.
What's wrong with the "superrich" not paying taxes on money they made and which belongs to them? Lots of "superrich" give money to charity and don't want their wealth to go to their kids (Gates and Buffett, to name two).
In any event, it should be their call, not yours.
You can get rid of plutocracy by separating the state from the economy, the way we separate church and state.
As for your last crack, what did you
(and the state) do to earn it?
What matters is the right of the giver to give his money to whomever he wants. People give gifts every day to other people who did nothing to earn them. Do you have a problem with that?
If so, don't let me catch you giving a Christmas present to a friend or family member.
There are laws in thie country against giving money to terrorist groups, like
Middle Eastern terrorists. That should include the American state, the world's biggest criminal gang.
William J. Stepp - 8/6/2006
I am an anarchist; government-run/-financed infrastructure should be privatized, where it shouldn't be abolished.
I don't propose going back to a pre-anything social structure; I merely said the estate tax should be abolished.
Presumably you're not naive enough to think the estate tax actually changes any social structure, even if you're doing cartwheels trying to show almost no one pays it, and it doesn't cause family-owned busiesses to be liquidated to pay the tax.
I get a kick out of the taxes proponents, who want to have it both ways. They think almost no one pays the tax and that it has no deleterious effects on business. On the other hand, they fly into paroxysms of rage against anyone who wants to abolish it, becuase doing so would be against their vision of a society founded on compulsory egalitarianism.
What's wrong with the "superrich" not paying taxes on money they made and which belongs to them? Lots of "superrich" give money to charity and don't want their wealth to go to their kids (Gates and Buffett, to name two).
In any event, it should be their call, not yours.
You can get rid of plutocracy by separating the state from the economy, the way we separate church and state.
As for your last crack, what did you
(and the state) do to earn it?
What matters is the right of the giver to give his money to whomever he wants. People give gifts every day to other people who did nothing to earn them. Do you have a problem with that?
If so, don't let me catch you giving a Christmas present to a friend or family member.
There are laws in thie country against giving money to terrorist groups, like
Middle Eastern terrorists. That should include the American state, the world's biggest criminal gang.
john crocker - 8/6/2006
Are you an anarchist. How do you propose that a government should run without taxation?
Should all contributions be voluntary or should all roads and military be private?
Toqueville saw the US as more egalitarian than other places and earlier times. The US of the ninteenth century was perhaps more egalitarian than earlier times, but was less egalitarian than it is now. I don't think you would find many allies if you wanted to return to the social structure of pre 1916.
The attempted aboltion of the estate tax and capital gains taxes are blatantly aimed at ensuring that the super rich pay virtually no taxes and that this growing wealth can remain in the same small group of families. This combined with the system of patronage that has grown in our congress is creating a plutocratic system.
I don't see how paying taxes on inheritance over $2 million is such a burden. What did you do to earn it?
William J. Stepp - 8/5/2006
All forms of tsxation are theft, including income, sales, and property taxes.
I don't know if property taxes are the worst type of taxes, but they are probably worse than consumption taxes.
The author attributed the alleged equality of white men during the Jacksonian era to partible inheritance.
This no doubt made for a more equal distribution of wealth than under a system of primogeniture. It was also consistent with the rule of law and property rights. And all done without the estate tax, which didn't exist before 1916.
The estate tax puts more loot into the pot of the State, so it can commit more crimes, like killing people in Iraq.
john crocker - 8/5/2006
"...the estate tax is theft, and is an assault on the property rights of people who pay it."
How is the estate tax any more theft than any other tax. Do you consider income taxes, sales taxes and property taxes theft?
Property can be capital. Are property taxes also the worst kind of taxes?
"I wonder how all that great Tocquevillian civic stuff happened in America before 1916, the date of the passage of the estate tax ripoff."
Please clarify what you mean by this and I will respond.
William J. Stepp - 8/5/2006
How an inheritance is used has nothing to do with the meaning of capital.
The fact that the inheritance tax has exemptions (it goes away entirely in 2010, but only for that year), and that only a small percentage of estates pay the tax is irrelevant to the fact that the estate tax is theft, and is an assault on the property rights of people who pay it.
The exemption should have been indexed for inflation in the 1976 revision, but the state didn't do it in order to steal more property.
The Wall St. Journal had an article earlier this year about a family that is going to have to liqiudate a manufacturing business because it lacks the cash to pay the tax.
There have been other stories before about this.
Anyone who pays the tax (like my sister and I, who will eventually have to pay on our dad's estate) is getting ripped off by the government.
I wonder how all that great Tocquevillian civic stuff happened in America before 1916, the date of the passage of the estate tax ripoff.
john crocker - 8/5/2006
"1 a (1) : a stock of accumulated goods especially at a specified time and in contrast to income received during a specified period; also : the value of these accumulated goods (2) : accumulated goods devoted to the production of other goods (3) : accumulated possessions calculated to bring in income"
The inheritance of Paris Hilton will be capital in the first sense, but your earlier comment ("The estate tax is a tax on capital, so it's one of the worst forms of taxation. It works directly against the employment of productive factors, such as labor.") clearly is refering to the second or perhaps third definition. How the inheritance is used does matter for the definition of capital that you originally used.
At this time the first 2 million inherited is exempt, soon the first 3.5 million will be exempt. The repeal of the estate tax will affect less than 1% of estates.
The example you cited is the only one I could find and it involved the selling of Dairy Queen stock (15%). 15% ownership of Dairy Queen is not a family business. The family was able to keep the auto dealerships which were the family business. Dairy Queen approached Buffet to buy the stock at a bargain price so the stock price would not be driven down by the open sale of 15% of its stock.
"The financial press has cited numerous examples of businesses having to be liquidated to pay estate taxes..."
Please provide citations.
William J. Stepp - 8/3/2006
One of the reasons Dairy Queen sold to Berkshire was that one of the owner's estates had an estate tax problem. My understanding is that he died intestate and that Berkshire got a bargain price.
Frederick Thomas - 8/3/2006
China is partly free-the economic part is freer than the average Latin American country, for example. It is not politically free, of course, but it has made a start in the economy.
Another interesting example is Vietnam. It went from major rice exporter pre-war to importer under Communism, to exporter again under the present more liberal regime.
William J. Stepp - 8/3/2006
The estate tax is a tax on capital.
It has nothing to do with how someone who inerits and estate uses it. A Paris Hilton can convert it to cash and have one big party, but the fortune she inherited was built up in the hotel business, which is certainly capital at work. Presumably Paris does have some of her stash invested in the market, even if only in low yielding money market funds.
The financial press has cited numerous examples of businesses having to be liquidated to pay estate taxes, which are due nine months after the estate holder's death. This is particularly true in recessions, when business values are depressed.
My father, a real estate investor, has told me about several people he knew personally who were in this situation.
Re: Buffett, the word I used is derived from "hypocrite." See a dictionary if you don't know what it means.
john crocker - 8/3/2006
"The estate tax is a tax on capital, so it's one of the worst forms of taxation. It works directly against the employment of productive factors, such as labor."
This presupposes that the heir will use the inheritance in a particular way. Inheritance is not capital unless and until it is used to generate income either by investing in a business or a different income property. Estate taxes are taxes on potential capital. All cash and goods are potential capital, so I guess in your view all taxes are "the worst kind."
"The estate tax sometimes forces small businesses to be sold for less than they are worth in order to raise the cash to pay the tax."
Cite an example please.
"Warren Buffett, who is wealthy enough to use foundations to avoid both estate and capital gains taxes, hypocritically advocates the estate tax, as his company has been able to buy some businesses over the years on the cheap thanks to it."
Yes let us all remember the cautionary tale of the selfish, coniving Warren Buffet.
john crocker - 8/3/2006
What is the value of your parents' farm?
Oscar Chamberlain - 8/2/2006
China is capitalist but not free. I find it intriguing that you consider a nation with a subjugated work force as a fit economic model for the United States to follow.
Frederick Thomas - 8/2/2006
"Inequalities are unfortunately the engine by which society advances, and all benefit. If successful members of the middle class advance, they create wealth in society which benefits the people as well."
Under these policies, the famines and bread riots of the ultra egalitarian terror years were reversed and the French economy blossomed.
This is why, of course, countries like the formerly free Hong Kong, with its 14% flat income tax, and no inheritance tax, provided a 12% compound GNP growth rate and about the same increase in per capita GNP, while Cuba, from the other standpoint, stagnated or went backwards (in '57 chevies, or on foot.)
An even better example is China itself, before and after its redirection to the capitalist path. It is now approaching Hong Kong in rate of improvement in per capita GNP.
We may not like human nature, or old Nappy, but he was right on this point.
William J. Stepp - 8/2/2006
The author is hung up with status, claiming it has to be earned rather than inherited. An aristocracy is characterized by inherited status. He overlooks the fact that in a society in which property rights and the rule of law are respected, people earn income contractually.
Wealth holders have a right to give their wealth away, including bequeathing it to whomever they wish, children for example.
In claiming that dead people don't have rights, he overlooks the right of bequest, which is the right of a living person to decide who gets his estate on his death.
The pining for compulsory egalitarianism is bizarre, at least outside the world of left-wing academia.
The estate tax is a tax on capital, so it's one of the worst forms of taxation. It works directly against the employment of productive factors, such as labor. How is that a good thing?
The estate tax sometimes forces small businesses to be sold for less than they are worth in order to raise the cash to pay the tax.
It's no wonder that the life insurance industry opposes repeal of the death tax, because selling second to die life insurance to pay estate taxes is quite lucrative.
Warren Buffett, who is wealthy enough to use foundations to avoid both estate and capital gains taxes, hypocritically advocates the estate tax, as his company has been able to buy some businesses over the years on the cheap thanks to it.
Jon Martens - 8/1/2006
Reducing estate taxes ensures that when my parents die, I might not have to sell the farm to pay the taxes on it.
Oscar Chamberlain - 7/31/2006
Nancy, concerning your cousin's business, if it is worth less than 2 million, he does not even have to file. That cut off goes up to 3.5 million in a few years.
See http://www.irs.gov/publications/p950/ar02.html#d0e317
John R. Maass - 7/31/2006
It is only polemical tripe, not sound reasoning based upon actual evidence, to state "The movement to repeal estate taxes is in reality nothing less than an effort to establish an American aristocracy," as this author does. Of course, it is no such thing, as any reasonable person can see. The vast majority of people in favor of repeal are interested in tax fairness, not the establishment of an aristocracy. In fact, the author's sophomoric assertions might be seen as his support for a leftist aristocracy--one of sanctimonious paternalism, in that its own members would be the aristocrats who decide how all of the rest of us get to keep and spend our money, what little they leave us.
I am seeing far too much partisanship from so-called scholars posting disingenuous "articles" with a light veneer of history used to cover purely political agendas. See Steve Conn's article of a few weeks ago about women as another splendid example.
William R. Everdell - 7/31/2006
You folks seem very young to me. When I first learned about progressive taxation, where the rich pay taxes at higher rates than the poor, Eisenhower was the Republican president and William Buckley was attacking him as a wishy-washy crypto-New Dealer. And the tax rate on the last dollar of the highest incomes was--wait for it--
Ninety percent!
I guess I miss the good old days, back when it was clear that overwhelming national prosperity was the result of the regular and predictable appropriation of excessive family income by the sovereign people, the money to be used for public goods that benefited everybody. The idea was first tried out here in 1862 (taxing of wealth and property at a flat rate was much older) and although it won the Civil War, it ran into a lot of opposition from New York where millionaires and corporate law firms were just beginning to appear arguing that an aristocracy of income was protected by the Constitution. The people decided against them in 1913 by amending the Constitution.
The argument was settled long ago, folks. We should all get used to it.
-WE
michael Randolph stephenson - 7/31/2006
This essay, while well written and interesting, says nothing new. For decades now we have seen countless attacks upon the inheritance tax claiming that it is establishing a new aristocracy. The main problem that I see here is that linking land with class superiority is an old construct. There is now and always has been an aristocracy here but nowadays it is linked to money, not land. If we can take steps to limit inheritance on land then inheritance on money will follow and then stocks, perhaps possessions next. Despite class rhetoric the wealthier classes still pay a higher proportion of taxes than the poor. If we want to follow Jefferson's lead then let us take a different part of his philosophy to emphasize. Jefferson also believed that education would help level the classes. Perhaps Congress should focus its efforts on improving education for all Americans and not rest its hopes upon taxation.
Nancy REYES - 7/31/2006
I have no problem with taxing rich people so heirs like Paris Hilton will have to work for a living.
However, until the estate tax can distinguish between inheriting multimillion dollar farm land (e.g. Amish farms in Lancaster) or family owned businesses (like my cousin's machine shop, worth a couple million), and unearned profit, then I will worry about how the taxes are administered.
After all, the money rich will be able to hide their assets in overseas banks. My cousin doesn't have that option.
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