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| A guide to|
|Hail to the Chief?|
|Persons of interest|
“”Those who have inherited the savings of others have an advantage which they may have in no way deserved, over the industrious whose predecessors have not left them anything.
|—John Stuart Mill|
“”Now my advice for those who die / Declare the pennies on your eyes
|—The Beatles, Taxman|
Use in the United States
The term was used by the Republican Party to support the repeal of the estate tax by creating a false impression of the tax in the mind of the voter. In the U.S. prior to 2001, the estate tax almost exclusively applied to the extremely wealthy with assets totaling upwards of two million dollars. Through careful manipulation, the Republican Party managed to convince almost a fifth of the American electorate that the Estate Tax would apply to them, whereas in reality it affected less than 2% of estates.
This led to the passage by the U.S. Congress, in 2001, of legislation to eliminate the estate tax gradually over a period of nine years. However, in 2010, the year when estate taxes were eliminated altogether, the Democrats passed a bill restoring the estate tax, albeit at a much lower level than previously and a much higher minimum taxable value.
Use in the United Kingdom
“”Death is the most convenient time to tax rich people.
|—David Lloyd George|
The Conservative Party in the United Kingdom picked up on the term during the 2007 party conference, when the shadow chancellor George Osbourne used the term in describing the party's proposal to increase the inheritance tax threshold from £300,000 to £1,000,000. However, Osbourne seemed somewhat more reluctant to commit to using the term "death tax" in the same aggressive manner as U.S. politicians.
Why estate tax might be a good thing
Inheritance, especially if one of your ancestors is really, really rich, tends to create a form of modern gentry; it's no secret that you need money in order to make money, and that having money (and thus being able to invest) greatly influences your level of education, income, health, and political influence. Even in "first world" countries, there is still a significant amount of income inequality (and even downright poverty), so this can be construed as more than slightly unfair, especially since none of these benefits are from their own labour, but have simply been bestowed upon birth. In France, for example, about 15% of the national income was due to inheritance; while down from the 24% in 1900, it is significantly higher than the 4-5% in the 1950s. Supply-side economics in practice.
Inheritance or estate tax works to level the playing field, as it were. Ideally, everyone would start at the same point, and would gain his or her money by personal merit, rather than having the luck of being born into it; inheritance tax would facilitate this, and would thus improve social mobility, and might make the American Dream somewhat feasible.
- Health care rationing (aka. "Death Panels")
- Principles of Political Economy
- "Of Death, Taxes, and Death Taxes"
- IRS on the estate tax
- The Political Uses of Public Opinion: Lessonsfrom the Estate Tax Repeal (opens as a.pdf)
- The American Aristocracy, The Atlantic
- Lord Riddell's Intimate Diary of the Peace Conference and After, 1918-1923 (1933)
- On the long-run evolution of inheritance: France 1820-2050; Thomas Piketty