There is a debate raging in Washington about repealing the estate tax. I recently was forwarded a piece written by @StephenMoore
I take issue with a number of points that the author makes and want to share them here.
1 – The fact that he calls it a “death tax” makes this is a propaganda piece. “Death Tax” was coined by Andrew Mellon specifically to garner wider support for repealing the estate tax even though it didn’t effect most Americans.
2 – We should get rid of the tax because, you know, it doesn’t really effect the budget that much. If that is the standard by which our government makes policy why does the GOP go after planned parenthood with vicious regularity? I mean their budget is only about 300 million dollars. A mere pittance against a multi-trillion dollar budget.
3 – Warren Buffet?That money isn’t “sheltered” they are giving it away to charities. He’s pledged to give away 99% of his fortune. Bill Gates? Same.
If the Koch Brothers and the rest of the billionaires effected by the repeal pledged to give most of their money away they wouldn’t be affected by the tax anyway.
4 – “Wouldn’t the smart way to create jobs be to make sure that the next generation can grow these enterprises rather than sell them off at auction to pay this economically destructive and fiscally inconsequential tax?” It’s a really stupid argument. If I’m a business owner I’m not going to decide to hire more people because I pay less taxes. Who would do that? I’m going to hire more people because demand for my goods and services have outstripped supply. What causes demand to out strip supply? More capital to more people so they can actually spend it.
Yet that reality tends to elude conservative economists who keep talking about trickle down economics. As rich executives continue to make more money year over year that demonstrably has not turned into greater salaries for others as shown in the graph below.
Or put it another way, rich people spend less. You can only consume so much stuff. You’re going to hit a point with your income that you just can’t spend anymore of it without giving it away. The rich just aren’t pumping dollars into the economy.
But “they are investing” you say. Yes, they are. Maybe some percentage of that is indirectly going to businesses that may or may not be operating in the US. However, it’s not a guarantee that a billionaire’s investments are even tied to on-shore investments where as a single mom making 40k a year is mostly likely putting all her money into the national economy buying the stuff she needs to live.
5 – The fact that we’re even having this debate is kind of ludicrous. Congress shouldn’t have spent time even bringing this bill to the floor since it only does effect a few thousand people. Shouldn’t the GOP led Congress be focused on more pressing things?