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Charles Jaco has written opinion and commentary pieces for dozens of magazines and newspapers. Each week, read and comment on a fresh on-line version. The discussion page enables you to share your view points world wide. If you would like to make a comment go to the " Join the discussion" link below. If you would like to view past editorials visit the Editorial Archive. Editorial: 8/6/99
Congress has decided that the old ways are the best. So they've decided to turn the clock back to Louis XIV and Marie Antoinette. We've moved 'way beyond liberal and conservative now. The people who wrote this tax cut proposal believe in the let- them-eat-cake school of economics to the point where there are crumbs on their desks. Never mind that Fed chairman Alan Greenspan thinks this tax cut is as undisciplined as a sack full of drive-through burgers followed by a cigarette. The tax-slash true believers keep blathering about how the Federal budget is like your family budget, figuring we're all too dumb to understand it unless they boil it down to really simple terms. Greenspan says we've got extra cash, so pay off the credit cards, meaning the national debt. Period. But pandering to the "it's my money" crowd always makes good political theatre. So this tax cut is being sold as a good deal. When you crunch the numbers, though, it only nibbles away at tax rates for most people, even over ten years. And it would only deposit a few hundred bucks--at most--in the pockets of regular folks. But it would dump tens of thousands into the offshore portfolios of the well-to-do. Why not?, say the tax-hackers. After all, the rich pay most of the taxes. Yeah, and they get most of the benefits of living in a democracy where it's possible to get rich and stay that way. But you see darn few sons and daughters of CEO's or Chairmen of the Board walking freezing tripwire patrols in Korea, or standing on a rolling flight deck at night trying to help an F-14 land, or getting hand-to-hand combat training in Marine Corps basic. It's the middle class and below who serve their sons and daughters up as cannon fodder to keep this country free and secure. And the rich? Well, somebody's got to pay the bills, and it might as well be them. But it's not the argument over who pays the biggest percentage in taxes that's transporting us back in time to the days of kings and queens and happy, singing peasants. It's the proposal to do away with the estate tax. Completely. Teddy Roosevelt had a firm opinion about inherited wealth. He said it's basically un-American, that it makes the recipients soft and flabby and unfir for the strenuous life. Eliminating the estate tax says 'Hey Teddy, it's the Nineties, let's create a new inherited aristocracy'. The estate tax was set up to prevent that sort of thing, much like the homeowner's mortgage interest deduction was set up to encourage home buying. We didn't want a nation of people living forever off Mumsy and Dadsy's wealth. Do the math. Right now, if you get an inheritance from a single individual, the first $650,000 is tax free. If you inherit from a couple, the first $1.4 million is tax free. And according to the 1994 study by the economists Michael Rendall and Robert Avery, one-third of all the inherited wealth in the United States each year goes to one per-cent of the population. That's an average of $1.6 million apiece. Another third goes to nine per-cent of the population. They'll inherit $336,000 each. And the rest of us? If we inherit anything at all, it'd be an average of $40,000. So who does cutting the estate tax benefit? Drum roll please. The top one per-cent who inherit over a mil and a half on average. Sorry, folks. I'm not in the business of subsidizing inherited wealth. If you want it, do the same thing you're always preaching to welfare recipients--get out and work for it. But gasp, some will say. That's class warfare. You betcha. The only people who ever whine about class warfare seem to be the well-heeled yowling about how the rest of us want their cash. They don't say a word when the rest of us help underwrite their ability to make a bundle. Memo to CEO's with fat stock options and others of their ilk: if you're exasperated by this, move someplace where's there's a completely unfettered free market and the strongest survive. Russia and Rwanda come to mind. I wish you no ill at all in your drive to accumulate wealth. Everyone's trying to do the same thing. But don't expect me to subsidize your attempt to pass it on to the kids. This country admires Bill Gates or Ted Turner more than it does the heirs to, say, the Wal-Mart fortune or anyone else who succeeds because of their family's name and wealth. Get off your behind and make it yourself. That's the American way. |
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