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Enterprise, Number 21, February 2, 1997.
Vital Marxist Tenet In Danger
By Vin Suprynowicz
[email protected]Special to The Libertarian Enterprise
The Americans who are best able to create new wealth -- to build private companies and create jobs -- often turn out to be older Americans.
Once hard-working entrepreneurs reach their 50s or 60s, they are likely to have enough set aside for a comfortable retirement. Their only financial incentive, then, to put themselves back in harness is the chance to build up fortunes with which they can make life easier for their children and grandchildren. But inherited wealth was seen as the epitome of capitalist injustice by the 19th century Marxists -- who looked only at the cliche of the idle playboy or heiress, rather than at all the good that had been done society by the deceased forebear in the process of building up that fortune by marketing new products and services, whether it was figuring out how to get fresh produce cross-country under refrigeration, or how to distribute electricity to rural areas via newfangled "transformers."
This has always been the problem with Marxism -- it looks at the world like a teenager locked in a department store at night. All this wealth just "showed up," so we might as well grab our share. The notion that all these goodies were created by someone's work -- work they are not likely to keep duplicating for our comfort and convenience if we keep stealing the fruits of their labors -- never seems to sink in, until the world is reduced to the last gang of armed jackals prodding the last of the ever-skinnier cattle back into the shambles of the milking barn, hoping to squeeze out just one last quart.
Armed with the clarity of economic perception which only seems to come to unemployable former clerks who have never operated so much as a lemonade stand, Herr Marx thus made confiscatory inheritance taxes a bedrock article of his modern ... for the 1840s ... economic creed.
Willfully ignoring the "eye of newt" underpinnings of this claptrap, early 20th century governments anxious for a rationale to loot more booty to fund their own schemes of "reform" and control greedily took up such articles of the Marxist catechism as the confiscatory "death tax."
Now, however grudgingly, the wheels finally seem ready to start turning back in the other direction -- toward the notion that those who create wealth must be left free to distribute it as they see fit, if we expect them to continue working the job-creating magic which Big Government alchemists have sought in vain to duplicate, lo these 75 years.
Estate tax relief received a major new boost on Jan. 20, according to The Associated Press, when Senate Majority Trent Lott, R-Miss., included an $18.6 billion inheritance tax reduction in the symbolically important first 10 bills of the 1997 session.
Why?
Despite an exemption for estates valued up to $600,000, there is a growing realization that the estate tax is leading to a loss of family-owned farms and small businesses.
Sen. Lott uses the word "confiscatory" to describe an inheritance tax rate which can go as high as 55 percent, helping conglomerates gobble up family businesses from cash-strapped heirs.
(Obviously, corporations suffer no such loss when transferring their assets, since corporations never "die.")
The current GOP estate tax cut is three times larger than the $6 billion package in the budget vetoed by President Clinton in 1995. The Republican plan would gradually raise the point at which estates become subject to the tax, from $600,000 to $1 million, in $50,000 annual increments.
It would also exempt from taxation the first $1.5 million in assets, and trim in half the tax on the value greater than that. And it would allow whatever tax is assessed on family-owned businesses and farms to be paid over 24 years, up from 14.
But Bob Packwood, now a lobbyist after resigning from the Senate in 1995, is advising lumber and other interests to push for an outright repeal.
Mr. Packwood says: "There's a growing movement in the country that finds the death tax, the estate tax, somehow unfair. You pay your taxes all of your life, you don't cheat, you're an honest citizen and then when you die the government imposes a higher rate than you've ever paid in your life."
Since every asset so taxed was, indeed, bought with "after-tax" dollars in the first place, the former senator is right. The fairest ... and most prosperity-enhancing ... course would be to eliminate the "death tax" completely.
Vin Suprynowicz is the assistant editorial page editor of the Las Vegas Review-Journal. The web site for the Suprynowicz column is at http://www.nguworld.com/vindex/. The column is syndicated in the United States and Canada via Mountain Media Syndications, P.O. Box 4422, Las Vegas Nev. 89127.
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