|
|
Estate Taxes are probably the most popular of all tax cuts. After all, they represent free money for whoever the descendants may be. However, they also represent the most aristocratic of devices still in existence to suppress the poor and continuate the rich as seperate static social classes. After all, inheritance money is money gained through the sole providence of being born into a rich family. By its very nature it make the rich stay rich, and by depriving the government of money it might otherwise have through taxes on the said estates, it raises the overall tax burden shared by everyone, hurting the poor the most. All other taxes are necessary evils; Estate taxes are moral due to their increasing of equality and leveling of the playing ground. It is simply put: By leveling a very strict tax on estate inheritance, the revenue of the government can increase. However, the entire proposal would be revenue-neutral because all other taxes can be lowered as to compensate for this influx of capital. In the end the average person who has no huge inheritance to look forward to can enjoy a reduced tax burden, and the America is returned to a society much closer to meritocracy than aristocracy.
Estate taxes, well actually their abolishment, carries one of the highest populist and sentimentalistic appeals of any tax-related idea today and seems destined to occur. However, they are also the most idealogically deserving of all taxes both economically and morally.
Economically estate taxes are the least harmful of all taxes. Taxation of Property, Income and Sales all serve to directly effect the individual's income annually or even every time that individual seeks to make a purchase. All serve to retard the economy, by making purchases less effective, by making less money available to be spent or by making owning property more expensive and therefore less appealing. However Estate Taxes uniquely do not do this. Sure, the examples can be used that people spend the money left to them, but this is often not the case. Very often this money left to the children of the deceased appreciates in time in various bank accounts and mutual funds, making the deceased's children much richer for doing nothing which they had any control over. Money thus kept in one hand is most definitely not as beneficial to the economy as money spread throughout the economy by decreased income, sales and/or property taxes. This money is saved directly over the years instead of received in one momentous occasion and therefore can stimulate the economy by increasing spending on the individual level.
On the moral level estate taxes can serve as instruments of equality that level the playing field for all comers. American mythology and sentiments lay upon the heroic figure of the working man who went from a dirt poor birth to being the owner of one of the largest corporations in America and incredibly rich and so on. So it is unusual that such an institution of the upper class benefiting the upper class and raising overall taxes should be popular with even the working-class person. Popularity aside, morally one of the priciples we as a nation were founded was the liberal principle of equality. This has, and should be, interpreted as equality of opportunity. To achieve the equality of opportunity, or the level playing field, ideally everyone would have exactly the same upbringing, education and money from parents. While we can't solve the first problem of upbringing without resorting an extremely radical position of forced communal upbringing, and while education is a difficult problem to solve, the third problem of equal access to "free money," or undeserved rewards can be helped. By leveling strict tax hikes on estate inheritances, everyone starts out the same, the people who were born into rich families would have no advantage, other than the probably better education they already received, over people born into poor families. Additionally the poor families would have their tax burden reduced by the overall decrease in taxation that could occur if revenue were raised from increased estate taxes.
So, specifically, I recommend that estate taxes are kept at a rate in the 75% percent range for all sums over $75,000 per inheritor, or $600,000 total, whichever is more. No taxes would be levied at inheritances of $50,000 or less per inheritor and of $300,000 or less total. This free inheritance takes into account the property rights of the deceased to do with his/her money as he/she pleases, but as that person is dead, their rights are diminished in compared to those of the living to full equality of opportunity. In between the super-tax and the no tax zones would be levels of increasing taxation.
While politicians more concerned about winning votes and wooing high spenders (who apparently are more interested in campaign donations to secure their heir's money than in helping poor children to equal opportunity) to contribute to their campaigns than in bettering the common good will probably do just the opposite as this essay recommends, that does nothing to diminish the moral high ground that estate taxes hold as the only moral tax.