When a nation loses its middle class, it loses its democracy. Repealing the estate tax is one step towards losing our democracy.
It would help the discussion considerably if the estate tax were not referred to by the administration and supporters as the "death tax." If you are going to be accurate with a nickname, it actually should be called the "silver spoon tax."
As Newsweek put it, eliminating the estate tax would "create a new class of landed aristocrats who could inherit billions tax-free, invest the money, watch it compound tax-free and hand it down tax-free to their heirs." The estate tax succeeds by limiting the concentration of wealth in the hands of a few, and levels the economic field a bit by requiring that the richest Americans pay a fair share for the continuation of our country's operation. It has worked for nearly 90 years at the federal level and has been picked up by states for the same reason.
Repealing the estate tax would cost the United States about $1 trillion in the first 10 years. Who will be required to make up this loss? You and I will, unless we are part of the richest one percent of U.S taxpayers.
Hardly fair no matter how you look at the question, particularly since the more one has, the more one benefits from the functions of the federal government.
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Eliminating the estate tax will personally benefit President Bush, Vice President Cheney, and most Cabinet members to the tune of more than $300 million - and we'll have to pick up that tab! Two of America's richest capitalists, Bill Gates and Warren Buffet, are in favor of continuing the estate tax. On the other hand, Bill Frist, majority leader of the Senate (whose parents reportedly are multi-millionaires) is working for repeal of the silver spoon tax.
The argument that the estate tax is double taxation is groundless. Truthfully, most wealth in large estates results from the untaxed growth in assets held. Farm land that increases in value is not taxed on the increase until it is sold. Profits from the use of farm land are taxed. Likewise, although dividends from investments are taxed, the investment itself can grow virtually forever without being taxed.
Inheritors of assets that have grown untaxed should clearly be taxed on the previously untaxed growth of any of these assets
Given the modifications proposed by Sens. Byron Dorgan and Kent Conrad, and Congressman Earl Pomeroy, less than 1 percent of U.S. taxpayers would be subject to the estate tax.
The loudest voices, mostly conservative bloviators, claim that the argument for continuation of the estate tax is a form of class warfare.
In reality, the estate tax is one means of fostering a more classless society. It needs to be modified, not eliminated.
Brooks lives in Minot, N.D. E-mail rahat@minot.com
