Tuesday, December 14, 2010

The Estate Tax - Punishing the Rich for their Success

My mother-in-law said something this weekend that really made me sit up and take notice. We were discussing the tax deal that President Obama and the Republicans had brokered. I think it's awful that Obama has to give the Republicans the tax cuts for the rich that they're after, but it's a political compromise. If everyone were happy with it, it wouldn't be a compromise.

My mother-in-law mentioned the estate tax and how she feels that it's wrong for them to tax the dying more like that. I mentioned that it was only going to affect the very rich, that the estates of most Americans wouldn't be affected. She responded that it's basically theft and that small businesses would be hurt by it. She claims that she's in support of the tea-party. That the government can't keep spending the way it does, but then she's in support of tax cuts for millionaires.

Is it just me or is there something wrong with ordinary people when they start worrying about the tax situations of multi-millionaires. Does it really count as a small business when you're worth $5 million?

Right now, the estate tax exempts the first $1 million and has a top rate of 55%. The currently proposed change would exempt the first $5 million and have a top rate of 35%. This will increase the deficit by hundreds of billions over the next 10 years.

When she says things like this, I hear parroting of conservative ideals. "Don't punish the rich for their success." "The poor need to work harder." "If I ever got rich, I wouldn't want to be taxed more." But the thing is, the rich already get the advantages of wealth. The rich own the businesses, the second homes, the yachts. The rich have the opportunity to invest in their retirement and hire the best doctors when their kids are sick. The rich live in the safest neighborhoods, and their kids go to the best schools. Asking that some of that wealth go back into the public coffers after they die doesn't seem like the worst punishment I can think of. It seems like a way to balance the system, so that all the wealth doesn't keep pooling in fewer and fewer individuals. And an estate tax seems like an especially good place to do that. That way we're not actually "punishing" the person that did the work. We're reclaiming the money from the rich guy's ex-wife's shiftless son from her second marriage.

Low and middle income Republicans make my head ache. It's like they think that the rich deserve wealth and happiness more than they do. They've had these notions of fairness and the free market drilled into their heads for so long that they forget the most important detail. The free market isn't fair. Give me a world in which everyone comes from identical cloning pods, receives the same educational, and monetary opportunities, and has the same physiology and psychology and then I'll endorse the idea that those who work hardest should get the most rewards. In the meanwhile, we have people being incubated in mothers that think that one more shot of heroine is more important than their embryo's development. We have children being educated in run down schools with out of date texts, until they have to drop out because their family needs them to go to work picking grapes. We have people who've been saddled with every health problem imaginable and on top of it a healthy dose of mental problems exacerbated by childhood emotional abuse. Tell me that some rich kid from Beverly Hills deserves more than one of them simply because of where, when and to whom they were born and you've lost my vote.

The funniest thing about this whole story is that my mother-in-law is a mooch on the state. She receives federal aid and medical coverage for herself, her aging mother and her grandkids. If she wants to cut government spending and get the government away from the purse strings of the rich, I'm sure that the Republicans will help her with that. Somehow, I don't think she'll really be happy with the results.

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