Vin Suprynowicz

The Libertarian

Vin Suprynowicz

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IS IT MORAL TO STEAL FROM THE DEAD?

The U.S. Senate is expected to vote today, June 8, on repealing the death tax.

The House has already voted to repeal; the president also favors the step.

There’s a lot of talk that a repeal would “cost” the government money, with “cost” being used here in the same sense as Willie Sutton asking, “How could I possibly afford to stop robbing banks -- do you know what that would ‘cost’ me?”

Federal revenues are skyrocketing as never before. The only cause of government deficits is excess spending by congressmen anxious to buy voters’ favor with those same voters’ own money.

The real issue of the death tax, meantime, is a moral one.

What is the moral justification for sneaking down to someone’s bank while their family is at their funeral, and seizing a whopping part of the estate they hoped to leave their kids, because they made the mistake of working hard and accruing assets worth more than $4 million?

Remember, we’re not talking about the proceeds of crime, here, but the assets -- most often a farm or small business -- built up through a lifetime of hard work, and by investing after-tax income.

But “Suppose that the estate tax does force the sale of some farms and businesses; is that necessarily a bad thing?” asked The Washington Post asked in an editorial Tuesday. “It’s a mistake to leave a farm or small business in the hands of heirs who don’t know how to turn a profit on it” (enough profit, that is to say, to pay off the whopping estate tax); “better that those assets be sold to purchasers who will maximize their value. ...”

To paraphrase a former Las Vegas mayor, “They’ve had that property long enough; time to give someone else a turn.”

Sebastian Mallaby, a member of the Post’s editorial page staff, made it even more clear in his column this week that, for the redistributionists, this question is all about a desire to seize more wealth from those who “don’t deserve it.”

“The nation faces rising inequality. ... The United States is by some measures the most unequal society in the rich world,” Mr. Mallaby writes -- an astonishing assertion, if one has ever witnessed the lifestyle gap between the wealthy and the slum-dwellers of India, Africa, or much of Latin America. (Or was the word “rich” carefully inserted there as an “out,” the way a yarn-spinning child might cross his fingers behind his back?)

“The nation faces the prospect that inequality will damage meritocracy,” Mr. Mallaby warns, again willfully confusing inequality of outcome with inequality of opportunity. “When the distance between top and bottom widens, it becomes harder to traverse the gap; people of low birth are stuck at the bottom.”

In America? Hoover Institution economist Thomas Sowell has demonstrated again and again that this is simply not true.

“What is the dumbest possible response to this?” Mr. Mallaby asks. “Take the tax that limits what the super-rich pass on to their children and get rid of it. Send a message to hereditary elites: Go ahead, entrench yourselves! ... The estate tax, like a cigarette tax or a carbon tax, is a tool for reducing a socially damaging phenomenon -- the emergence of a hereditary upper class. ...”

In the early twentieth century, poor men with strong backs -- black and white -- left the farms of the southern United States and migrated north to great industrial capitals like Scranton and Detroit, seeking factory work at better pay.

Did they each bring along a few hundred dollars to help finance the construction of those factories? They did not. So who built the great factories of Pittsburgh and Akron and Gary? The U.S. Department of Labor? The Works Progress Administration?

Of course not. They were built by capitalist entrepreneurs.

Yet today’s levelers -- jealous socialists convinced they deserve a fancy carpeted office from which to spin their fantasies of an America where poor children bear a mark on their forehead to make sure no one ever gives them a chance -- apparently despise the greedy, grubby capitalists who built the newspapers and TV networks that give them employment. Apparently they would rather see the inherited businesses of the Ochs and the Sulzbergers, the Meyers and Grahams dismantled or closed, if thereby the government could somehow prevent the great-grandchildren of Andrew Carnegie and Henry Ford (and now the children of Bill Gates and Steven Spielberg -- were they born rich, by the way?) from inheriting.

Which leads us to the final irony: for the death tax doesn’t really redistribute wealth away from America’s “super-rich,” at all.

When death claimed the parents of our current generation of Rockefellers and Melons, of Duponts and Astors and Morgans, did the death tax render their children and grandchildren virtually penniless, requiring them to show good moral fiber by working their way back up from scratch? Of course not. These truly wealthy families have investment bankers and estate planners working full time to make sure their wealth is sheltered in complex family foundations and trusts. Nor did the estate tax prevent George W. Bush or Al Gore Jr. -- Jay Rockefeller, Evan Bayh, Christopher Dodd, Lincoln Chafee, Patrick Kennedy -- from inheriting enough wealth to keep alive their family tradition of winning very expensive public offices -- America’s real “hereditary ruling class,” if we have one.

Proponents of the tax argue that “only” a few hundred farms and family-owned businesses per year are whacked with the tax. But this ignores the expensive machinations into which families are forced in order to avoid showing up on that list -- often selling out to the corporate equivalent of a chop shop, a pension fund liquidator with little concern for employees or their families, blithely euphemized by the Post as “purchasers who will maximize their value.”

Is this the goal? Social engineering to force the sale of Famous Amos Cookies and Godfather’s Pizza? Are we any more comfortable with the Washington Post deciding who "deserves" to pass on a lifetime's work to their kids, than if the lucky ones get chosen by Congress and the IRS? And why be so selective, anyway? If wealth is a “socially damaging phenomenon,” why not just seize any assets worth more than a million dollars, accrued by anyone? It worked for Comrade Lenin.

The people caught by the death tax are not the “super-rich,” but precisely those energetic first-generation entrepreneurs who surprise themselves by building up a farm or business worth millions -- but who don’t have a family tradition of foundations and trusts and fancy “estate planners.”

Numerous black and Hispanic entrepreneurs fall into this category -- why else do you suppose the Congressional Black Caucus overwhelmingly opposes the death tax?

But those are just practicalities. The real question is: Where did government gain the moral right to decide which families can keep what they’ve earned? And how is preventing parents from doing so a “family value”?

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