Tax Lawyer's Blog

Jim Abrams of The Washington Post reports that the tax policy advocacy group, Citizens for Tax Justice (CTJ), oppose President-elect Obama’s plan to cut (but not eliminate) the estate tax:

President-elect Barack Obama has proposed a change that would prevent the estate tax from disappearing in 2010, but which would also unnecessarily cut the estate tax below the level it would reach in years after 2010 if Congress simply does nothing.

If Congress does nothing, there will be no federal estate tax in 2010, but in subsequent years the estate tax will return to its Clinton-era form that would result in more estate tax revenue.

CTJ applauds Obama’s plan to make permanent the 2009 estate tax laws which would prevent the estate tax from elimination, but said that fixing the estate tax exemptions and rates at 2009 values is a bad idea because,

[I]t would be a regressive and costly giveaway to the very wealthiest families in America, because it would mean that the tax would affect even fewer estates than it does now.

CTJ argues that there can be no fair tax system without an estate tax:

If we tax earnings from work, it would seem only fair that we also tax transfers of large fortunes to those who do not need to work because of the enormous wealth of their families. This is particularly true when you consider that most of the fortunes being transferred from one generation to the next consist largely of income (capital gains income) that has never been taxed at all.

Finally, CTJ offers a final rationale for a high estate tax:

If the families who pass huge fortunes down through successive generations are no longer asked to help pay for the goods and services that make such wealth possible, then surely Americans will question whether ours is truly a country where hard work counts more than a family name.

Go here for the entire CTJ article in PDF format. 

The Tax Lawyer’s Opinion

Clearly, the folks at CTJ are big proponents of a high estate tax (or “death” tax depending on who you talk to) and in favor of a more “progressive” tax system that exacts an even higher burden on “rich” people to fund the government.

But most people are neither rich nor successful so suggesting that we confiscate the property of a few wealthy people and give it to the many poor people doesn’t take much courage.

I take a different view than the Citizens for Tax Justice regarding the value of rich people to society.

I believe that the rich and successful – the job creators among us - give more to society than they take from it and rather than levying a special tax against them as a class, we should let them pass on their wealth to future generations as a reward for not becoming and not allowing their children, grandchildren and future heirs to become wards of the state.

We Americans are a fair-minded bunch and we know a rat when we smell one. There is something oddly medieval about the idea of taking a dead man’s stuff simply because he isn’t around to fight you for it any longer.

If it walks like grave-robbing and quacks like grave-robbing, guess what? 

It’s a duck.

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