Friday, June 09, 2006

Estate tax nonsense

Posted by Craig Westover | 9:49 AM |  

Efforts to permanently repeal the estate tax failed in the Senate yesterday.
The Senate rejected a plan Thursday to permanently repeal the federal tax on inherited estates, but lawmakers continued to negotiate behind the scenes to try to find a compromise that would reduce the levy significantly.

Voting 57-41, the Senate fell three votes short of the 60 needed to cut off debate and move to consider a Republican proposal that would have eliminated the estate tax. The levy is currently phasing out and will vanish in 2010, only to spring back to life in 2011.
Aside from the ridiculous policy of phasing out a tax and then reinstating it -- plan your death carefully -- the estate tax debate is a great example of focusing on an issue and missing the larger principle behind it.

The fact is, unlike Democrats claim, the revenue collected from the estate tax is inconsequential in terms of funding government programs, legitimate or otherwise. By pulling funds out of productive use, it actually diminishes tax revenues. Unlike Republicans claim, there is no widespread ravishing of family farms and businesses because of the tax. But that’s what the two sides are fighting about.

What’s the principle at stake? What we have with the estate tax is simply government looking at a class of people with wealth and saying “You have it, we want it.” The estate tax itself and the level at which it is applied are completely arbitrary. Even the progressive income tax, which is bad policy not illegitimate authority, has some rationale structure. There is no such rationale to the estate tax. The assumption is simply that all property belongs to the government, and it will determine who can keep what.

If one supports an estate tax, that is the socialist principle one is defending. It can be no other way. The estate tax should be repealed, not because of any consequences it might have, but because at its core it is totally in contradiction of American principles of private property and individual rights.