The estate tax distraction
With much fanfare, a group called Responsible Wealth has launched a campaign to raise estate taxes, with a plan that would essentially begin huge new “progressive” taxes roughly where they end right now. They want the exemption reduced from $10 million to $4 million for a married couple, and everything above this limit taxed at 45 percent or higher. Included on Tuesday’s conference call were former Treasury Secretary Robert Rubin; filmmaker and philanthropist Abigail Disney; John Bogle, founder of the Vanguard Group; medical doctor Richard Rockefeller; and Responsible Wealth Project director Mike Lapham. Bill Gates Senior, father of Microsoft’s founder, was scheduled to participate but unable to attend, sending a prepared statement instead. The group managed to pack virtually every distraction, mis-representation, and outright delusion surrounding the liberal approach to fiscal policy into a single conference call.
For starters, there’s the claim to moral supremacy inherent in the group’s name and charter. As if “responsibility” can only be achieved by allowing this wildly irresponsible government to seize over half your estate!
A great deal of hay was made about the presumption of moral superiority emanating from the ostensible “argument against interest.” These are rich people with big estates – including Bill Gates’ father and Roy Disney’s granddaughter – who want their taxes raised. How can you argue with that?
Strangely enough, moral credit for argument against interest never works the other way, when people who aren’t very likely to leave $4 million estates raise objections to the latest soak-the-rich tax grab. There are far more people who take that view than millionaires who clamor for tax increases… but of course, they don’t get to call press conferences that attract swarms of reporters.
Barack Obama’s “You didn’t build that… someone else made that happen” philosophy hangs heavy over the Responsible Wealth enterprise. Speaker after speaker complained of the “unfair” way the rich have supposedly benefited from rules “tilted in their favor.” That might be true of Barack Obama’s friends at Solyndra, but it’s increasingly irritating to hear it bandied about with respect to everyone who manages to accumulate a couple million dollars of net worth, paying copious taxes along the way. The Disney heiress on the Responsible Wealth conference call made a big production about how her wealth comes from stock assets that have supposedly escaped taxation. Whatever that might say about her portfolio – and it dramatically undersells the amount of taxes she’s paid in a variety of other ways – it’s certainly not true of the vast majority of the modest estates this group wants the government to confiscate. Halfway through their conference call, you could almost forget that they began by talking about seizing half of an individual estate worth only $2 million, and they aren’t offering any protections whatsoever against the double and triple taxation that Abigail Disney claims haven’t affected her fortune.
That’s all part of the ongoing liberal project to blend the upper middle class into a diamond-studded mass with the super-rich, in order to transform the upper echelons of the middle class into fashionable revenue targets. There is a galaxy of difference between a married couple with $4 million in assets and Warren Buffett. There’s also a substantial difference between farms and other small businesses, but the Responsible Wealth speakers had a nasty habit of conflating them, in the course of pooh-poohing the idea that small business assets would have to be sold off to pay confiscatory estate taxes.
They aren’t too fond of the entirely valid point that every one of them is perfectly free to voluntarily give his or her millions to Uncle Sam, either. At least former Treasury Secretary Robert Rubin, now with Goldman Sachs, was reasonably honest about why they hate that question: you can’t design a tax system around voluntary contributions, no matter how often Democrats refer to tax increases as a request, in which certain people will be “asked” to pay their “fair share.” What these people are after is power, control, and the moral sugar rush of forcing other people to pay higher taxes right now, rather than voluntary donations to the government bequeathed after death. Who’s going to lavish praise on Warren Buffett for his exquisite sense of “responsibility” if he merely vows to leave his personal fortune to Washington after he passes on?
But the most unintentionally amusing aspect of Responsible Wealth’s push for higher estate taxes is their either disingenuous, or hopelessly ignorant, belief that it will somehow “solve” America’s debt crisis. By their own reckoning, their estate tax increases would bring in only about $300 billion more than the current system, over the course of ten years. That’s enough to pay for about three days of Barack Obama’s annual spending. It’s not enough to be considered a significant portion of any fiscal “solution,” even if the negative effects of heavily taxing private estates are completely ignored.
This group has the same bizarre myopia as every other tax-hike enthusiast about the sheer size of federal spending, as compared to the wealth of the hated One Percent. You can seize all of the assets held by the super-rich, right now, and only have enough money to run the government for a few months, or perhaps cover a year or two of the federal deficit… and then you’re left with a dead goose who lays no more golden eggs.
Rubin brought a bit of unintended comedy to the proceedings when he kicked off the conference call by portraying estate tax increases as a tool of deficit reduction… then later complained that the big problem with leaving estates in the hands of the idle rich is that they don’t spend the money as quickly and aggressively as Washington would. Well, which is it, Mr. Rubin? Do you want to seize this private-sector capital to pay down Uncle Sam’s titanic deficits, or immediately blow the money on more misbegotten government “stimulus” and “investments?” We all know the answer, don’t we?
This notion that private individuals can’t spend their money as wisely as Washington central planners is both morally and intellectually offensive. The Responsible Wealth team was very big on patting each other’s backs and marveling that anyone could possibly object to their proposals. The converse is true: how can anyone survey the wreckage of the Obama years – not to mention the rubble left by his predecessors – and conclude that Big Government is better at making “investments” than citizens who control their own money? Who falls for this notion that the inheritors of a family business can’t build further social wealth by keeping a successful business model running… but overpaid bureaucrats in D.C. can seize that money to create Utopia?
And while the Responsible Wealth team was very big on appropriating the language of patriotism and the Constitution to push for tax increases, the Constitution was expressly written to prevent politicians from using government power to impose their vision of “economic justice” or “income equality” upon the populace. Allowing the government to decide what its citizens are allowed to keep is the opposite of the limited Republic our Founders envisioned… and as anyone who isn’t a blinkered ideologue might have noticed, the Big Government – Little Citizen model isn’t working very well. Not only has it proven incapable of paying for its programs, but they have a nasty tendency of making our social crises worse. Pouring more money into this broken system is not the answer. We should be breaking this government down and privatizing it, not feeding it gigantic chunks of family fortunes.
A constantly repeated theme during the Responsible Wealth conference call is that unfairly allowing rich people to keep too much of their money caused our fiscal crisis – “the deficit increased on the backs of the middle class,” as Disney put it. That’s Mad Hatter Tea Party nonsense. What a dangerous distraction from what America really needs to do, in order to safely cross the yawning abyss on the far side of today’s little “fiscal cliff.” We have a gigantic deficit because liberal politicians spent obscene amounts of money they didn’t have… and now they’re trying to weaponize their own irresponsibility into demands for more tax reveneue.
How about some responsible government for a change? How about if we insist on the spending cuts that will make up 90 percent of fiscal balance – but which we have never gotten, no matter how often they are promised – before we talk about raising anyone’s taxes? And it’s long past time we stopped pretending that rich people can afford to save the “middle class” from tax increases. The middle class has the numbers and the money. The last thing they need is another soothing fairy tale about how the filthy rich can pay for everything by lugging a few more sacks of gold from the buried treasure vaults where their vast fortunes currently sit idle. Here’s the hard, cold truth: If you want a government this size, and you are currently paying taxes, you will be the one who ends up paying for it. Telling any other tale to the American people is the very height of irresponsibility.