The Calcification of Wealth.
It occurs for me to believe that hereditary wealth is one of the strongest impediments to progress in our society. One would think that we could have seen through the perceived benefits of dynastic estates. Unfortunately we haven't gotten much further away from the primogeniture model, which was officially abolished in 1925 (in England). Primogeniture meant that the eldest son always inherited the sum total of family wealth, upon his father's death. For centuries it was even illegal to try to pass on real estate in any other manner.
In today's climate it is often taken for granted that it is wholly appropriate to pass on one's wealth to his/her children. In fact, measures to redistribute such resources have been fought tooth and nail in recent years. In the 2004 presidential election, Bush and his cronies targeted the estate tax for repeal. They tried to claim that the measure hurt family farmers, who had slaved their whole lives to build something to pass on to their families. But the truth is that the tax rarely (if ever) affected independent family farmers. In 2002 only 4% of those who died had any amount of estate taxes levied on them. The cutoff at that time was $1 million. The Bush tax cuts included a gradual phase-out that meant that, by the year 2009, no one would pay the tax unless they died with more than $3.5 million. And at the same time the maximum percentage taken has decreased from 55% to 45%. In the year 2010, no one in the United States will pay an estate tax. So if your parents are filthy rich, pray for them to die in that year. Because even if Bush's plan is overturned, that exemption in 2010 is already writtten into law.
At one point in those heady days of anticipation before the 2004 election, Kerry earnestly suggested that he would fight to restore the estate tax. Predictably he encountered resistance from many ordinary middle class people who had been hoodwinked by rightwing pundits. Karl Rove, with an assist from partisan hack-pollster Frank Luntz, effectively nicknamed the tax the "Death Tax". Who would oppose ending the government's cruel fleecing of the dead? Never mind that no one but the super-wealthy would ever pay anything.
Why is eliminating the estate tax bad? First of all, it redirects the tax burden once again on to the middle class. We should all be desensitized to those efforts by now. But it also thwarts economic mobility by keeping large blocks of wealth in the hands of a very few, who consequently did nothing to earn it. The benefactors of such inheritance have no incentive to redistribute this money, or even risk putting it back into play. They know nothing of the struggles that contributed to the amassing of such wealth in the first place. And they are inherently incapable of understanding the concerns of more than 95% of the population. This contributes to class conflict and resentment on both sides. At the same time it discourages social progess and innovation. Without class mobility, we risk sliding backwards into the feudal conditions of Medieval England. As financial inequities increase, and the number of citizens living at a bare substinence level follows suit, we lose something as precious as the idea of an "American Dream". When stratification becomes ossified, we lose the ability to evolve as a nation.
We are living under a federal executive that eloquently demonstrates the dangers of inherited power. Though I was no fan of the first President Bush, my memory of him is one of nostalgia whenever I compare him to his progeny. Dubya grew up with the complacency of knowing that Daddy had already done all the hard work of creating a name and fortune. So he could concentrate on blowing lines, drinking, and engaging in typical prep boy shenanigans. Then when it was his time to inherit the legacy, he conveniently "found God" and assumed the mantle. It's all worked out so lovely, hasn't it? Are the sons and daughters of Horatio Alger all self-indulgent pricks? There are probably exceptions, but in my experience many of them are. But only one of them at a time gets to become leader of our country.
At least one billionaire sees things my way. Bill Gates has already decided to limit his posthumous contribution to his progeny. He is limiting the inheritances of his children to a mere $10 million apiece. His intention is to give the rest of it away to charities. Presumably most of those donations will occur while he still has the sense to pick and choose in accordance with his values. Just like Andrew Carnegie demonstrated, not all pirates need age gracelessly.
In today's climate it is often taken for granted that it is wholly appropriate to pass on one's wealth to his/her children. In fact, measures to redistribute such resources have been fought tooth and nail in recent years. In the 2004 presidential election, Bush and his cronies targeted the estate tax for repeal. They tried to claim that the measure hurt family farmers, who had slaved their whole lives to build something to pass on to their families. But the truth is that the tax rarely (if ever) affected independent family farmers. In 2002 only 4% of those who died had any amount of estate taxes levied on them. The cutoff at that time was $1 million. The Bush tax cuts included a gradual phase-out that meant that, by the year 2009, no one would pay the tax unless they died with more than $3.5 million. And at the same time the maximum percentage taken has decreased from 55% to 45%. In the year 2010, no one in the United States will pay an estate tax. So if your parents are filthy rich, pray for them to die in that year. Because even if Bush's plan is overturned, that exemption in 2010 is already writtten into law.
At one point in those heady days of anticipation before the 2004 election, Kerry earnestly suggested that he would fight to restore the estate tax. Predictably he encountered resistance from many ordinary middle class people who had been hoodwinked by rightwing pundits. Karl Rove, with an assist from partisan hack-pollster Frank Luntz, effectively nicknamed the tax the "Death Tax". Who would oppose ending the government's cruel fleecing of the dead? Never mind that no one but the super-wealthy would ever pay anything.
Why is eliminating the estate tax bad? First of all, it redirects the tax burden once again on to the middle class. We should all be desensitized to those efforts by now. But it also thwarts economic mobility by keeping large blocks of wealth in the hands of a very few, who consequently did nothing to earn it. The benefactors of such inheritance have no incentive to redistribute this money, or even risk putting it back into play. They know nothing of the struggles that contributed to the amassing of such wealth in the first place. And they are inherently incapable of understanding the concerns of more than 95% of the population. This contributes to class conflict and resentment on both sides. At the same time it discourages social progess and innovation. Without class mobility, we risk sliding backwards into the feudal conditions of Medieval England. As financial inequities increase, and the number of citizens living at a bare substinence level follows suit, we lose something as precious as the idea of an "American Dream". When stratification becomes ossified, we lose the ability to evolve as a nation.
We are living under a federal executive that eloquently demonstrates the dangers of inherited power. Though I was no fan of the first President Bush, my memory of him is one of nostalgia whenever I compare him to his progeny. Dubya grew up with the complacency of knowing that Daddy had already done all the hard work of creating a name and fortune. So he could concentrate on blowing lines, drinking, and engaging in typical prep boy shenanigans. Then when it was his time to inherit the legacy, he conveniently "found God" and assumed the mantle. It's all worked out so lovely, hasn't it? Are the sons and daughters of Horatio Alger all self-indulgent pricks? There are probably exceptions, but in my experience many of them are. But only one of them at a time gets to become leader of our country.
At least one billionaire sees things my way. Bill Gates has already decided to limit his posthumous contribution to his progeny. He is limiting the inheritances of his children to a mere $10 million apiece. His intention is to give the rest of it away to charities. Presumably most of those donations will occur while he still has the sense to pick and choose in accordance with his values. Just like Andrew Carnegie demonstrated, not all pirates need age gracelessly.
posted by Merge Divide at 8:21 PM
2 Comments:
Gandhi suggested a 70% estate tax. Not only did the children do little to earn the complete inheritance but society, as a whole, created the conditions for the wealth to be amassed.
Stated differently, the money came from society and should be returned to society.
During the controversy of the "death tax" many commentators reflected the same concerns as you have. It appears the average American must simply be complete idiots to oppose the estate tax.
The information was presented but it takes some mental effort to process. Apparently very few people actually think about the issue and simply act reflexively to propaganda such as "death tax."
This country's values and culture needs a shift from Horatio Alger mythology of individualism and wealth worship to a socialistic Gandhian mythology.
Note the I question Gandhi's approach as a viable system of governance. Did he really win India's independence or were other factors more critical in Britain's release of India.
Sorry for the many non sequiturs.
I agree with you, especially your well-stated initial two paragraphs. I've personally made this argumentin speaking in favor of shifting the tax burden to the wealthy.
It's actually rather frightening to consider what the average American actually thinks about.
"Ghandian mythology" makes for an interesting phrase. I'd like to hear more of your thoughts on the topic.
The bulk of my knowledge about Ghandi is the result of the book you lent me.
Always good hearing from you.
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