As we are in the Advent season, a time of forgiveness and joy, it seems right to call attention to evidence that politicians are not always the monsters of self-interest that cynics imagine. In an article in Tax Notes [links not permitted], Martin A. Sullivan writes,
In contrast to the clear majorities in both the House of Representatives and the Senate that favor permanent repeal of the estate tax, the wealthiest members of Congress favor extending the tax. At the other end of the spectrum, many Republicans leading the battle for repeal have relatively little wealth and would be unlikely to enjoy any direct financial benefit from repeal of the “death tax.” When it comes to fighting class warfare in Congress, the rich are for the poor and the poor are for therich. . . .
Eight of the 10 wealthiest senators have voted against repeal. Six of the eight are Democrats. Ironically, the wealthiest and the third wealthiest Republicans in the Senate – [Lincoln] Chafee [of Rhode Island] and John McCain of Arizona – are the only Republicans opposed to estate tax repeal.
In the House, the wealthiest member is Rep. Jane Harman, D-Calif. ($117.1 million). And House Minority Leader Nancy Pelosi, D-Calif., is also very wealthy ($16.3 million).
In sharp contrast, House conservative Republicans who will be leading the fight for repeal have relatively meager assets. After taking into account mortgages and legal bills, House Speaker J. Dennis Hastert, R-Ill., and House Majority Leader Tom DeLay, R-Texas, have an estimated net worth of only $120,000 and $40,000, respectively. House Ways and Means Committee Chair William M. Thomas, R-Calif., has a reported net worth of zero.
Mr. Sullivan is wrong, of course, to state that, in this dispute, “the rich are for the poor”. Mulcting estates does the poor no good, unless envy makes the process vicariously satisfying. Nor are “the poor” really “for the rich”. Death taxes don’t harm rich decedents in the slightest. They are, after all, dead and no longer interested, on anybody’s theory of the afterlife, in treasures laid up on Earth. Government seizure of a portion of their wealth (the residue left after a lifetime of taxes paid on income) merely takes resources away from their heirs, with the same ill effects on incentives and efficient resource allocation as other taxes levied at exorbitant marginal rates. And that is before considering the waste entailed in devising and implementing elaborate tax-saving gimmicks that generate the worst of all outcomes: minimal government revenue coupled with the immurement of funds in unproductive foundations and other tax shelters.
It is heartening that legislators of modest means can discern the evils of resentment-driven tax policy. If only their wealthier colleagues were equally clear-headed.
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