I guess I'm not making myself clear.
I do not think the Republic will soon end if the Federal Estate Tax is abolished. (Ben T. and [link|http://www.pbs.org/newshour/bb/economy/july-dec02/democracy_7-17.html|Kevin Phillips] might have a different view.) I think of it primarily as a source of revenue, and a way to help decrease the unproductive accumulation and hoarding of wealth by generations of people.
I don't know the details, and I welcome correction if I'm wrong, but it's my impression that the tax code and especially estate taxes helped cause the creation of things like the Rockefeller Foundation, Ford Foundation, Bill and Melinda Gates Foundation, etc., that helps to some extent to spread the wealth. Without tax implications breathing down their neck, I don't think that the Gates Foundation would spend the 5% of their assets every year that they're required to do under the law (as they just barely meet the rule 5% now).
I'm trying to present a pragmatic picture of why the Estate Tax is a good idea. I don't like the idea of an aristocracy that persists for generations in the economy or in politics. As is pointed out in [link|http://z.iwethey.org/forums/render/content/show?contentid=272324|Lamb], change is necessary and change is good. I also believe that Andrew Carnegie, for example, would not have done the good he did if he had inhereted his wealth from his father.
The issue for me isn't charity - it isn't that the government knows better how to spend a billionaire's wealth than he does. It's that concentrations of wealth that persist in a family for generations are unproductive. Tax money that they don't pay has to come from others in society - others who often just barely get by themselves.
Investment is important and should be rewarded. But so is working for a living. It seems that over the last 30 years or so the US has rewarded investment - which is often passive income - much more than income earned from work. I think the balance should probably be shifted back a bit.
I think I've about had my say. I'll close with a question for you and Peter:
If the Estate Tax is abolished, what will you use to replace the revenue? For instance, [link|http://www.cbpp.org/3-16-05tax.htm|estimates] are that under current law (no estate tax in 2010, reinstated in 2011), $290 B would be lost to the Treasury by 2015 if the Estate Tax is abolished after 2010 - $72 B in 2015 alone. Let's assume, for the sake of argument, that the funding can't come from reductions in "waste, fraud and abuse."
Thanks.
Cheers,
Scott.
