Why Shouldn't Paris Hilton Pay Her Fair Share?
With the failure of Congress to act this week, the estate tax will now expire on New Years Day, 2010, leaving a potential windfall for the super-rich and a massive headache for middle-class Americans. Fortunately, Congressional leaders are determined to act, retroactively if necessary, early in 2010 to prevent this train wreck. What they ultimately do will have far reaching implications for our nation and the kind of economy we build moving forward. Preserving a strong estate tax is essential to the values that made this nation great.
In the decades before our nation was born, colonists came to America to escape the tyranny of the crown and the powerful aristocracies that dominated much of Europe. Carving out their space on new soil, these colonists sought to create an economy built on merit and the equity of one’s own sweat, not the aristocratic bloodlines of one’s predecessors.
In the years following our nation’s birth, a middle class emerged, with shopkeepers filling the bustling new cities and family farms dotting the landscape. However, by the dawn of the 20th Century, America began to see vast sums of wealth concentrated into the hands of a very few industrialists and railroad barons. Wealth, amassed and transferred from generation to generation, threatened to change the American landscape. The specter of a homegrown aristocracy, much like the one colonists fled a hundred years before, reared its ugly head on our soil.
It was in this environment that President Theodore Roosevelt led the charge for a federal estate tax, declaring, “No advantage comes, either to the country as a whole or to the individuals inheriting the money, by permitting the transmission, in their entirety, of the enormous fortunes which would be affected by such a tax; and as an incident to its function of revenue raising, such a tax would help to preserve a measurable equality of opportunity for the people of the generations growing to manhood.”
Almost 100 years after its creation, Congress is poised to cast a crucial vote on the estate tax, a vote that could either weaken or strengthen what is left of the estate tax and the core value it embodies of an economy based on merit. At the same time, the revenue raised from the estate tax supports vital public structures and systems – transportation and energy infrastructure, education and healthcare, among others. These essential structures lay the foundation of broad-based prosperity and economic stability for the next generation. In the end, the estate tax is fundamentally about recycling opportunity for all.
After several phased reductions since President Bush and the Republican-controlled Congress cut the tax in 2001, the estate tax is now at its lowest rate in nearly 80 years and will disappear entirely in 2010. Making the 2009 law permanent, as some propose, is an irresponsible tax-giveaway to a handful of multi-millionaires at a time when American workers are suffering and the nation can least afford it. Letting it expire is even worse.
Is our country better off after decades of assault on the most progressive elements of progressive tax system? Disparities of income and wealth are now at their highest levels since the infamous robber-baron era that preceded the Great Depression of 1929. With so much money in so few hands, our economy functions more like a casino, with high-risk speculation and financial bubbles and busts, than the kind of stable economy built on work and strong middle-class values. Is this what we want for America? I hope not.
It’s time for us to return to the kind of values that made this country strong. Rewarding work is one thing… a good thing in fact. Rewarding the fortune of one’s birth is quite another.
If Congress and the President are serious about building a strong middle class, then they should act immediately to strengthen the federal estate tax instead of weakening it or letting it expire. By reversing this tax-giveaway to millionaires, a hangover from the Bush years, we can begin the process of recycling economic opportunity for the next generation and making needed investments in our nation’s real priorities.