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March 26, 2015

The estate tax is the single biggest cause of the rise and dominance of Progressivism in the 20th century.

Three Cheers for Death Taxes? at The Z Blog The formation by business magnates
of massive charitable foundations in order to save their fortunes from government depredation created a massive slush fund for the financial support and promulgation of every lunatic Progressive idea in existence. Without the Ford, Rockefeller, MacArthur and other foundations, Progressive lunacy as we know it would not exist. Heck, PBS and Sesame Street, which poisoned the minds of innocent children with liberal dreck for generations, would not exist.

Posted by gerardvanderleun at March 26, 2015 7:29 PM. This is an entry on the sideblog of American Digest: Check it out.

Your Say

The quote above is from one of the commenter on the Z man's post.

Since I was there, and because the estate tax is a subject on which I am an expert, and 99.99% of the populace is completely ignorant, and happy to share their ignorance with you, I wrote the folowing comment:

"Unlike most other taxes, death taxes have the benefit of breaking up large fortunes."

This is simply not the experience here in America, nor anywhere in the first world.

The reason is simple, the existence of the death tax gives enormous incentives to the owners of capital for the use of trusts, foundations, and other artifices to avoid the tax. Because of the cost of such things, they concentrate wealth that might otherwise dispersed.

If you want to break up large fortunes. You should observe what in fact does break up large fortunes.

The first, and most important think that dissipates large fortunes is a dynamic economy. The mere fact that Z and others use Bill Gates as their archetypal rich guy is a demonstration of that. His fortune was created by him in the past generation. The gales of creative destruction in a dynamic capitalist economy are the strongest force against the concentration of wealth. When the creation of new wealth is the dominant factor in the economy, old wealth pales.

Second, many children and many wives will eat up great fortunes. The estate tax does not encourage splitting up fortunes among children. An inheritance tax with a graduated rate is far better at that.

I think that your link to the post at Maggies covers the issue of morality very well. What you don't go into is the impact of the estate tax on the welfare of the citizenry. Economists are pretty generally of the opinion that the estate tax decreases wages. Any tax on capital decreases the amount of capital. More capital requires the hiring of more labor which drives up the price of labor, i.e. wages.

The estate tax also decreases capital by encouraging lifetime consumption. If you are too young to remember the extravaganza of Malcolm Forbes 70th birthday party you should look it up. A few months later he was dead. But, the millions he spent to fly hundreds of party guests to Morocco resulted in lower estate taxes. Another path through which the Estate tax lowers wages.

PS props to Joseph K above for an interesting angle on the baleful effects of the Estate Tax.

Posted by: Fat Man [TypeKey Profile Page] at March 26, 2015 9:25 PM

Fat, excellent economic analysis. Most people do just not understand capitalism and market economies. The fact that capitalists invest, drives the prosperity of the workers. Government/socialism/taxes diminishes, not grows the economy. Please teach the kids economics.

Posted by: tripletap [TypeKey Profile Page] at March 27, 2015 2:44 AM

trip - First, let's teach them to read, write and count.

Posted by: BillH [TypeKey Profile Page] at March 27, 2015 7:09 AM

I'd estimate at least half the US federal budget is a slush fund for leftist causes, organizations, and programs. That's why they fight so hard every single time against any cuts, anywhere. Not only would it require a closer look at the numbers (which would reveal any abuse, fraud, or illegal spending) but any trimming anywhere reduces the slush fund.

Organizations like Code Pink and Planned Parenthood can only survive with huge cash infusions from tax payers, and I cannot understand why nobody, anywhere, in any position of power or with a reach actually even attempts to explain or highlight that.

The left is forcing all of America to support their schemes. They're taking money from you to pay for things you hate and that hate you. But nobody ever talks about it.

Posted by: Christopher Taylor [TypeKey Profile Page] at March 27, 2015 9:34 AM

One has to start with the basic premise that it isn't the Government's money!

All Socialism is based on the "Zero Sum Game"; if the rich have the money, there isn't any for the poor. That is the ultimate crock of Progressive POOP!

But one will NEVER get rid of that Cardinal Sin of Envy, that drives the Left forward and mad.

Posted by: Vermont Woodchuck [TypeKey Profile Page] at March 27, 2015 11:49 AM

In the absence of ALL gov't everything will cost 1/8 what it does now and you'll earn 8 times more.
At that point a dollar will finally be worth a dollar.

Posted by: ghostsniper [TypeKey Profile Page] at March 27, 2015 2:45 PM

Of course with no government you'll have to spend most of your larger paycheck on the things the state provides like fire police, water, streets...

Posted by: Christopher Taylor [TypeKey Profile Page] at March 28, 2015 8:33 PM

Much of what you say we need is not necessary in the amount you project Chris.

Water will flow,people may have to form a group to protect the plant. Police can be self provided. Witness what neighborhoods did after Karina with keeping looters out.

Roads can be dirt. Fire, go to the fire station and take a fire truck and bring it back to your neighborhood. Now you have fire protection, be careful.

Only those that rely on the government for everything will suffer.

Posted by: Vermont Woodchuck [TypeKey Profile Page] at March 29, 2015 1:28 PM

So you imagine a world in which the infrastructure we have no simply sprouts out of the ether, complete, and needs no maintenance. Further you seem to think that these things will, if not controlled by the government, will just be free to check out like a library.

I don't live in that world.

Posted by: Christopher Taylor [TypeKey Profile Page] at March 30, 2015 9:43 AM

Sprouts? No.

We envision a world much like the past where people had the intestinal fortitude to take their responsibilities straight on and would never consider whining for others to take care of them in any way.

Want someone to pave your road for you? Well, dig deep in your pockets and then prepare yourself to put up with increased traffic, litter, and kids and animals getting splattered no matter how many signs are posted in your front yard.

People in favor of gov't are dishonest, lazy, cowards never to be trusted and there's no way around it.

Posted by: ghostsniper [TypeKey Profile Page] at March 30, 2015 1:53 PM

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