A column about America,
by Marylaine Block
originally published by
Fox News Online, 1998-2000
#98, August 1, 2000
DEATH AND TAXESby Marylaine Block
A while back we got a nice chunk of unexpected cash, the happy result of selling our house for three times what we paid for it. When I asked a stockbroker to help me invest the money, he immediately started explaining how to defer taxes, or avoid them altogether. I told him "No, thanks," because I'd always believed those who had benefited most from our society should pay the most taxes, and wasn't about to change my beliefs just because I now had some money.
He looked at me as if I'd turned into a two-headed cat.
Needless to say, I'm not in favor of abolishing inheritance taxes. Calling it the "death tax" doesn't change the fact that the fortunate few - the 2 percent of all Americans with fortunes big enough to be subject to it - are asking people with far less money to take up the slack and pay more taxes in their place.
If I ever earned $675,000 a year from my writing, I'd have to pay taxes on it. If I won $675,000 in the lottery, I'd pay taxes before I ever saw a cent of it.
But if I won $675,000 in the biggest crap shoot of all - who I was lucky enough to be related to - I wouldn't have to pay any taxes at all. Only if I inherited more than that would I have to worry about taxes. And I wouldn't have to have done a single useful thing to earn that tax-free money.
I ask you, is this how we reward hard work, invention and risk-taking, the things Americans say we value?
But surely the reason people work hard and save is to give their family economic security, isn't it? I wouldn't want to take away that incentive, would I?
Who's taking it away? I would consider several million dollars you did nothing to earn to be economic security, even after a small percentage of it goes to pay taxes. This is not confiscatory taxation we're talking about. People are still rich once they've paid it.
Republicans say inheritance taxes force heirs to sell farms and businesses. How can I, an Iowan, argue for destructive taxation on farms? Because it's a phony argument. With all the tax breaks built into the tax code to protect small farms, about the only farms that aren't exempt are the factory farms that are putting small Iowa farms out of business. The same protections are available for the small businesses Republicans say they're trying to protect.
But, but, butů it's THEIR money, they say. They earned it all by themselves. They've ALREADY paid taxes on it. If they want to pass it on to their family, why should the government get to tax it again?
Well, actually, they mostly HAVEN'T paid taxes on it. At this level of wealth, most of the money is unrealized capital gains that have not been taxed.
Inheritance taxes are a painless way for the public to recover some of its investment in citizens. The truth is, we DON'T get rich entirely by our own efforts. At every stage of our lives we benefit from public investment, in schools, public health, college and business loans, low-interest mortgages, emergency medical care, disaster assistance, guarantees on savings, roads and airports, the social security and Medicare that helps our parents remain independent. We rely on government information and statistics to make business decisions, and count on our courts to protect our patents, copyrights and contracts.
Is it too much to ask that when people benefit richly, they put some of those benefits back into the system? Like capital gains taxes, which are also applied to money people did nothing to earn, there's plenty of money left over -- I didn't mind paying my first capital gains taxes, because it meant I had a nice little chunk of capital gains to enjoy.
Take it from a two-headed cat: we don't need to abolish the inheritance tax, because one of the best inheritances we can give our kids is a stable, well-functioning government that invests in the success of everybody's children. I don't mind paying my fair share to keep it going.
I just object to paying theirs.
home to all my