When So-Called Progressives Don't Understand What Aristocracy Is: The Estate Tax Edition

Democrats need a better class of pundits, ones who aren't so enamored of their own cleverness, while at the same time, utterly ignorant of political history. It would help, for instance, when trying to defend the estate tax. Matthew Yglesias, in a fit of contrarianism worthy of William Saletan, asks the following scintillating question:

I think if I read another snatch of writing where a progressive puzzles over why the estate tax is unpopular, I'm going to shoot myself. More informative, I think, would be self-examination. Why are liberals eager to tax estates. My own effort to think this problem over has actually made me less eager.

Lead on, Wise Pundit-ji:

The estate tax is basically a wealth tax with a highly progressive rate structure. But instead of taking a tiny share of very wealthy households' wealth on an annual basis, it takes 0% of a given household's wealth on the vast majority of years and then a healthy chunk during whatever year the head of the household happens to die. There's no particular economic reason to structure a wealth tax this way. It was done, I assume, for some pragmatic reason of implementation and enforcement or else because it was "estate tax" was more politically sellable than "wealth tax." So that's fine, but it's not like the merits of this policy are some kind of holy writ handed down on tablets.

[Mad Biologist bangs head on keyboard]

It's very simple:

1) While even Dirty Fucking Hippies like me like progressive taxes for a variety of social and economic reasons, there are also good social and economic reasons to also reward the accumulation of some of those earnings by those who earned those savings (although excessive savings can also lead to problems).

2) Those who inherit didn't earn it. Most liberals, like most people, don't have a problem with earned wealth, although, like most people, it depends on how that wealth was earned and how it is being used. But as I put it Sunday, the redemptive power of working for a living apparently only applies to the lower orders, not the offspring of the wealthy, who by virtue of their birth, don't need redemption.

In #2, I'm being snarky; obviously, I don't agree. Because that's a (bogus) justification for aristocracy. That Yglesias, who supposedly is one of the bright stars in the progressive firmament, doesn't understand the basic principles underlying the estate tax is thoroughly depressing. Our professional Democrats don't even know how to make core Democratic arguments.

This is a problem.

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One problem with eliminating the estate tax is that, if the estate contains stocks, bonds, or property, those things have not had capital gains taxes paid, so, to that extent, the estate tax is a capital gains tax paid by the estate.

Not having an estate tax also institutionalizes power. I think it would be hard to argue that money does not equal power, and that by passing it down the family, so passes the power. As that is maintained for generations, so power does potentially build. This is already a problem even with the current estate tax.

Anyway, Matthew, though having many positive things to offer, is being a weenie here.

It continues to amaze me that those who speak in defense of the estate don't avail themselves of the excellent rhetoric on the subject by its sponsor: Theodore Roosevelt.

By D. C. Sessions (not verified) on 22 Dec 2010 #permalink

Teabaggers look to the Founding Fathers and the founder of capitalistic thought for ideas about how things are s'posed to be. They can choke on Jefferson:
"A power to dispose of estates for ever is manifestly absurd. The earth and the fulness of it belongs to every generation, and the preceding one can have no right to bind it up from posterity. Such extension of property is quite unnatural."
and Adam Smith who said:
"There is no point more difficult to account for than the right we conceive men to have to dispose of their goods after death."

By natural cynic (not verified) on 22 Dec 2010 #permalink

Isn't it odd that giving money to unemployed workers or welfare mothers is a "slippery slope" leading to lazy, unmotivated people who have no incentive to get a job, but inheriting millions (or hundreds of millions) is not? Doesn't inheriting millions destroy their incentive to work and achieve just as thoroughly as getting a monthly welfare check?

To help prevent the "unfortunate" children of rich parents from becoming underachieving do-nothings, we should eliminate all inheritances. Help the unfortunate children of rich parents fully achieve their true potentials by eliminating all inheritance. Let them learn the rewards and benefits of working at minimum wage jobs, just like the "welfare moms" and the unemployed.

If working hard and possibly failing is a good lesson for unemployed people or welfare recipients, isn't it just as valuable for the children of rich people. If they didn't participate in building their parents' riches, why should they benefit it?

Do you think that Scrooge McDuck would call Huey, Dewey and Louie lazy and unmotivated? They seem to have loads of energy and are always into something, despite being likely heirs to a vault full of gold coins.

Sosiosh, you're using cartoon ducks to make a point? You'ld probably do better to argue that Paris Hilton was willing to play at temporarily doing menial jobs to get super-famous.

By Samantha Vimes (not verified) on 08 Jan 2011 #permalink