The party of envy, class warfare, and Marxism part 2

Earlier this month, I posted about how the arguments by the left simply don't hold water when applied to the debate about estate taxes. The repeal effort on the table at the time failed in the Senate, but the issue is back. Thursday the House passed a partial repeal - upping the exemption from its current 2 million to 5 for individuals and 10 million for couples. While this "lite" version is a mistake in that it still embraces inequality in the tax code, it's a step in the right direction and should make later efforts to repeal the death tax easier.

In my previous post, I discussed why the arguments of the left on this issue are based on deception. I saw a couple more examples raised earlier this week that further serve to illustrate my point. First, an unsigned editorial in the Washington Post gives the usual dishonest tripe so popular with many on the left:

LIKE THE GHOUL in the horror movie that refuses to die, estate tax repeal has returned from the grave to stalk the halls of Congress. Just two weeks after abolitionists failed in the Senate, they have regrouped behind a new bill that would achieve most of what they want -- not quite the elimination of the tax but its "reform" into insignificance. Like full repeal, this reform would expand the budget deficit and exacerbate inequality.

The deficit canard is the cornerstone of robotic liberal groupthink whenever government and money are discussed lately. In this case (as in most), it's being used dishonestly. The deficit does not exist because of tax cuts - the simple and irrefutable fact is that revenues have increased dramatically for the government in spite of (or more accurately, because of) the previous cuts. The deficit is a product of one thing and one thing only - irresponsible spending habits in Congress. Until this fact is recognized and addressed universally by both left and right alike, no serious deficit reduction is possible.

"Exacerbate inequality" - this one is rooted entirely in raw emotion and couldn't be more dishonest since it really doesn't have anything to do with fairness unless you're viewing it through the eyes of a six year old. "Timmy has a newer bicycle than me. It's not fair!" should not be the type of argument that mature people employ. Only a mortally flawed sense of fairness rooted in envy and greed view a progressive tax code as fair.

But what is fair? I have a friend that believes that if government costs 3 trillion to run, each of the 300 million people in the US should chip in ten grand, since all citizens benefit equally from the government's core responsibilities (common defense, domestic tranquility, etc). While it's hard not to appreciate the brutal simplicity of his argument, it's a model that doesn't take into account that a large portion of our population doesn't generate income, i.e., the very young and the very old being the largest groups to use as examples. So in recognition of this, we tax based on income. In such a system, fairness is also a simple concept if you can set aside greed and envy:

If I make 10 times more than you, I should pay 10 times the taxes.
If I make 100 times more than you, I should pay 100 times the taxes.

Seem fair? Not to the left, where childishness reigns. Add a "liberal" dose of covetousness, and "fair" suddenly becomes a grotesque caricature where an impaired syllogism views the following as just:

- You make 10 times more than I do, so you should pay 20 times more taxes.
- You make 100 times more than I do, so you should pay 400 times more taxes.

And it's just comical when applied to estate taxes:

- Your estate is worth 100 times more than mine, so I should pay no taxes, and you should pay 46%.

The truth is that fairness has nothing to do with the liberal views on taxation. Period. The Post article gives us a hint of why(emphasis mine):

The nation faces the expensive retirement of the baby boomers. It is grappling with rising inequality. Its prized social mobility may ultimately be threatened if the richest members of society are allowed to pass unlimited riches to their children.

I don't recall which part of the tax code addressed "social mobility". Can anyone help with a reference? This green-eyed phenomenon is even more plainly illustrated in a post I came across in FireDogLake yesterday. The author, Ian Welsh, should be lauded for his honesty in showing the true basis of the liberal view of taxes (I've included the bulk of the post so that context won't be an issue, only leaving out the graphs about income inequality and estate tax distribution. Please follow the link to see the graphs. Emphasis added.):

To summarize:

The top 1% pays 94.8% of all estate taxes.
The top 1/2 a percent pays 86.5% of all estate taxes
The top .1% pays 51.3% of all estate taxes

Most people will never be effected by the Estate Tax. Ever. But you will be effected if it’s repealed.

Here he shows clearly that the estate tax is unfair. Either 1% is being unfairly targeted, or 99% is skating out of their responsibilities. It's a point he misses altogether, though.

The general estimate of the cost of repeal is a trillion dollars a decade. A hundred billion a year. The government is already bleeding money, in both deficit and substantial debt. Any tax repeal - whether estate, or capital gains, or corporate taxes, wille eventually have to be made up (yes, the creditors will eventually want their money back.) Estate tax repeal will be paid for at some point, by the middle class. And by your children.

TANSTAAFL - There ain’t no such thing as a free lunch. If you want a tax cut now, you pay for it later - with interest. If the rich want a tax cut now, the middle class will pay for it later, with interest.

This, as I pointed out before, is demonstrably false. Revenues have increased dramatically due to prior tax cuts, the problem is runaway spending. Fix that problem, and the middle class and children will be fine. By the way, 100 billion dollars a year, if correct (Not saying it isn't, but there are competing estimates of the effect of estate tax repeal) taken away from government control (where it would be badly mismanaged) and left in the private sector could create/sustain 3.2 million $15/hour jobs. Think the government would use the money even a fraction as well?

But I want to say something more about the estate tax.

There is no fairer tax. If it were up to me, it wouldn’t just be reinstated to it’s full 1999 level, it’d be increased to tax even more from the richest DEAD PEOPLE.

That’s right - dead people. By all means, let’s call it the death tax.

I don’t know about you, but I don’t expect to take it with me. I don’t think my money goes with me wherever it is I go when my heart stops beating. I don’t think I need money after I’m dead.

This has a morbid "They're dead! Quick, take the watches and wallets! No, leave the Timex - but get the Rolex from that guy over there!" quality to it that should offend anyone's sense of morals. If you think this isn't a popular view among the left, read the comments - Mr. Welsh gets lots of praise for his canonization of this grave-robbing mindset.

And I don’t think my heirs need more than a few million dollar head start over everyone else. Sure, if I ever have kids, I’d want to give them a head start, but I don’t deceive myself that they did anything to, like, deserve it, other than with the "lucky sperm contest".

Now we get to the heart of his argument. Jealousy. Greed. Envy. We should tax estates because the heirs don't deserve their inheritance. What I can't figure out: Why they don't display this level of contempt for the Kennedys?

Taxation is a zero sum game. You can take the money from dead people - who don’t need it or you can take it from living people who do need it.

Except heirs are living people, aren't they?

You can tax it from the kids of the rich, who did nothing to deserve it and who can probably make it on a few million from Daddy and Mummy; or you can tax it from people who actually earned it by the sweat of their own brow.

Moving from envy to hatred... They don't deserve it because Ian wasn't born lucky. Does arrogance trump aristocracy?

Oh, and those stories about people losing their family farms to the estate tax? Myth - no one has ever been able to find even one.

I'll agree with that one. Farms are indeed protected as far as I know. Now, about the medium-sized privately owned businesses...

The estate tax, the death tax, is about letting people have more money when they’re alive, and only taxing it when they’re dead.

And that, to me, makes it better than every other tax in existence.

Except you'd have more money if the government didn't tax the dead. Like it or don't, even Paris Hilton will use her money for your benefit. How? She'll spend it. She'll invest it. Every dollar that stays in the private sector helps improve the economy for all of us, increasing the chances that you or I will be able to induct our children into the "lucky sperm club". And the purpose of any tax should be to fund the government - not perform social engineering.

So forget estate tax repeal - let’s turn it around and increase the estate tax. Because dead people don’t need money, and living people do, and no matter how much rich people love their kids they didn’t do anything for the money, and a head start of a few million is enough for anyone.

But we're talking about fairness. And a twisted sense of fairness borne of contempt and envy isn't fair by any rational standards. A tax policy based on some masterbatory Robin Hood-ish fantasy is neither fair nor workable.

But government needs to be funded, right? So let's talk fair. Right and wrong do not change because of scale. If Paris Hilton doesn't deserve her inheritance because she didn't earn it, then equally do my children not deserve their comparatively meager one. An inheritance, if you believe it's unearned therefore undeserved, remains so whether it's 20 grand or 20 million.

So the fair answer is once again very simple. If you want to tax estates, then tax them all equally. No exceptions and the same rate for all, or my preference - tax none. Anything in between is counter to the principles upon which our republic was founded.

I say repeal the death tax. Then get to work bringing fairness and transparency to the rest of the tax code. That means eliminating regressive taxes that unfairly target the poor (like corporate taxes), and making every earned dollar look the same to each and every American.