Several people have written me since last night to make the case for eliminating the "death tax" — and I have to admit that they lose me right away when they call it that. It's an Inheritance Tax or an Estate Tax. No one is taxed for dying. When you die, you will not pay one cent in tax. Calling it the "death tax" is a way to misrepresent it and load the emotional argument against it. It would be like if I were in Congress and I introduced a bill to exempt 6'3" Jewish cartoon writers from all taxes and called it The Stop Torturing Kittens Law or something like that. If the arguments against the Inheritance Tax are at all valid, they'll still be valid if you call it what it is.
As it happens, I don't believe they're valid. Almost everyone who wrote me in opposition claimed that the tax causes families to lose their farms. No, it doesn't. There have been very few documented cases of that…and even in those cases, the financial problems of those families were complex and troubled and mismanaged. Any form of taxation will cause hardship to someone, especially if they're foolish about handling money. There are folks who've won the lottery and wound up worse off than before because they didn't allow for paying normal income taxes on that income.
I believe the real premise behind the campaign against a Death/Estate/Inheritance Tax (whatever you call it) is as follows. Rich Uncle Charlie buys a home for three million dollars. By the time he dies and his also-wealthy nephew Sam inherits it, it's worth thirteen million. No one has ever paid any form of tax on the ten million of accrued value and Sam doesn't want it taxed like income or lottery winnings. So he and others in similar situations spread a couple of lies. One is that it's a "double-taxation;" that tax was paid on the wealth when it was earned and now the heirs are expected to pay taxes again on it. Not true. The other is that the government is stopping Uncle Charlie from leaving his wealth to Nephew Sam. No, it isn't. But if you suddenly make ten million bucks, you're going to pay some taxes on it. Why shouldn't Sam?
But of course, you can't get the public — especially the lower or middle class public — behind a move to make sure billionaires don't pay taxes on their inheritances, and can pass along accrued wealth without anyone paying taxes on it. So you tell poorer people that when they die, they won't be able to leave their homes to their kids, and how the taxes will wipe out the family farm, and stuff like that which never happens. And you call it the "Death Tax" because it sounds more inevitable in everyone's life that way.
If you'd like to know more about this form of taxation, read this page.
And just so we're clear on this: I am very much in favor of lowering taxes in this country. I think we spend way too much and we spend it in a lot of areas where I think the government should just butt out…or at least, spend a lot more wisely. But I also think we ought to lower taxes for everyone and not just for the wealthy…because one way or the other, lowering them just for the wealthy causes them to increase on the not-wealthy.
I think we also ought to lower taxes and cut spending as a unit…and I'm amazed how many people are so fervent about slashing taxes but don't give a rat's ass about slashing spending, like those things are unrelated. I rarely see anyone who strikes me as genuinely interested in the lowering of taxes. They all just seem to want theirs lowered…and if in order for them to keep getting the same level of services out of their government, it's necessary to raise them on someone else, that's just fine with them. Ultimately, we'll never really lower taxes, instead of just shifting the burden to those who have less clout and cleverness, until someone is willing to limit the role of government.