Estate Tax

Estate Tax May 28, 2006

Peter Beinart offers one contradictory, one misleading, and one astonishing argument in favor of the estate tax on the “super rich” (TNR, May 15).

The contradictory argument first: He quotes from Teddy Roosevelt to the effect that the wealthy owe a particular debt to the state because they benefit disproportionately from the services that every citizen enjoys – education, infrastructure, police protection, etc. This argument implies, Beinart says, that “because the American dream involves both public suppport and individual initiative, vast inheritance pervert it.” Inheritances are fine, but “beyond a certain level, unearned wealth undermines the moral link between effort and reward. The argument for the estate tax is an argument for the dignity of work.”


Well, hmm. What about the moral link between effort and reward for the entrepreneur who works 70-hour weeks for 55 years so that his kids will have something to start with? Does it matter to the moral link of work and reward that his reward is halved by the estate tax? Or does work only deserve to be dignified if it’s not too successful?

The misleading part: He cites only one contemporary example of the abuse of inheritance: Paris Hilton. This rhetorically skews the reality, ignoring the thousands of heirs and heiresses who don’t use their money to buy celebrity but instead to fund universities, research, new companies, charities, etc. etc. Are all heiresses Paris Hiltons? Is she really representative? Of course not. But she is a useful symbol, an icon of “wealth.”

And the astonishing argument. “In many ways,” Beinart writes, “communism’s demise is a blessing.” It’s worth pausing a moment over that numbing “in many ways” before moving on. Not “in most ways” and not “altogether” a blessing. Communism’s demise is a mixed blessing, and we need to weigh the costs and benefits.

In any case, the dark lining of that silver cloud is that since the collapse of communism “American elites are no longer haunted by the specter that, if they don’t deal the poor into the capitalist game, that game will dissolve in an orgy of blood.” Of course, Beinart doesn’t want blood in the streets, and he thinks the way to prevent that is to ensure that the gap between rich and poor closes rather than widens, and thinks that the only way to do that is to maintain the estate tax. But it’s hard to miss a note of wistfulness: Oh for the good old days when the rich – sorry, the “super” rich, you know, like Paris Hilton – could be scared into giving up some of their money. There is also a scarcely veiled elitism (bordering on bigotry): Beinart’s argument suggests that the only thing preventing the poor from turning vicious is extortion money, as if they had no moral scruples of their own.


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