Understanding the End of Bretton Woods
Review of Gerhard Weinberg, A World at Arms, and Others

Brad DeLong (2000): The End of the Inheritance Tax?

The End of the Inheritance Tax?:

On June 9 the Republican-led House of Representatives voted to repeal the estate tax. Estate-tax repeal will surely be vetoed by the president this year, but perhaps it will not be vetoed next year. When George W. Bush, campaigning in Iowa, declared that he "support[ed] getting rid of the death penalty," he was not saying that Texas should stop executing people because it was not clear that all those on death row were guilty of first-degree murder. He was saying that it was unfair that in the next decade those who leave estates of more than $1,000,000 would have to pay two-fifths of the excess to the federal government in estate taxes. It would be fairer to have no estate tax at all--and thus, relative to our current system, give an average present of $3.5 million each to the heirs of the 2,400 people who die each year leaving estates of more than $5 million.

So why is it a high priority of both the Republican Congressional leadership and the Republican Presidential candidate to repeal the estate tax. Why is it a high priority to give another tax break to the rich. Why is it a high priority to remove an obstacle that keeps the rich and powerful of one generation from ensuring that their grandchildren have--unearned--relative riches and power as well?

Earlier generations of Republicans would be astonished. It was Abraham Lincoln who said that the great thing about new America as opposed to old Europe was that in America wealth, power, and influence were not inherited: by and large Americans did not work for landlords or bosses but worked for themselves, and "the man who labored for another last year, this year labors for himself, and next year will hire others to labor for them." Andrew Carnegie, a principal funder of the 1900-era Republican Party, put it more bluntly: "he who dies rich dies in disgrace." Accumulated entrepreneurial wealth was a public trust to be used for public betterment--hence the Carnegie libraries, endowments, buildings, and universities scattered over America. Accumulated entrepreneurial wealth was not--or so Carnegie thought--something that could be morally used to give your descendants a cushy life.

But all this was in centuries past. Back then America was a place--in theory at least--where people made themselves. Who you were depended on what you had done, did, and were going to do. It was--in theory at least--different from Europe, a place where who you were depended on who your daddy was. The foundation on which America was--in theory--to be built was the principle of "equality of opportunity." And back then solid obstacles to the intergenerational transfer of wealth and power made sense: if there is to be an upper class let it be made up of those who have been skillful and lucky in their deeds, not of those who just happened to be born in the right household.

But now it is a new century and a new millennium. Now it is a legislative priority of the Republican Party to eliminate the estate tax. Now the Republican Party has a standard bearer who thinks that it of all the forms of unfairness in American life one of the most unfair is to keep someone from squeezing every single ounce of advantage out of one's daddy's position and accomplishments. "Fairness" no longer means "equality of opportunity."

If this Republican tide does sweep over the country, and if "fairness" does come to mean that it is fair for the children of the rich and powerful to find it extremely easy to stay rich and powerful and to make it easy for their grandchildren to stay rich and powerful as well, I for one will be sad. It was never the case that opportunity in America was as equal as our civic religion proclaimed. But it was always the case that America was a special place because of universal agreement that inequality of opportunity was unfair.

If this Republican tide does sweep over the land, there will still be a country called "America." But that country will lack much of what made America special, and lovely.

691 words