Death and Taxes...or really the death tax. Continuing my attempt to help my Republican relatives understand the real principle behind things, today we're going to talk about why this exists.
My uncle and father were having a conversation about inheritance and grandma and grandpa's estate. (Not in a greedy or morbid way, but in a making sure there was enough for G&G and preserving some for the family if possible.) My uncle made a comment about how since income tax had already been paid on the money "why should I have to pay twice?" This complaint led to my father using one of his favorite lines: "all governments redistribute wealth, it just matters which way." My dear old dad didn't follow it up with the historical reasoning for inheritance tax in the US. There is almost nothing more American than inheritance tax.
Most of you have seen the Mel Gibson movie "The Patriot." The scene you need to remember is when General Lord Cornwallis is discussing his reward for crushing the colonial army. He has a map stretched out in front of him and it looks like the 13 colonies no longer exist having been divided up into massive land grants. Those land grants would come with hereditary title. We would have had duke and barons. The framers of the Constitution were so opposed to this that there is a prohibition against granting titles in the Constitution. While there is and was an aristocracy in America it was then more than anywhere else at any point in history an aristocracy of merit.
We have an inheritance tax to prevent wealth and power from being held in fewer and fewer hands. Wealth seems to have its own special gravity - the more you have the more you tend to acquire. The inheritance tax does a little bit to resist this pull of money to money. The inheritance tax (and progressive income tax) help level the playing field. I've long stopped believing in the traditional American dream where anyone with a strong work ethic can end up a millionaire because the deck is stacked too strongly against most people. These two taxes are designed to help keep the American Dream possible.
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