Estate tax: Morally and fiscally wrong?

On Friday during a Review-Journal editorial board GOP senatorial candidate Sharron Angle made the usual argument against the estate tax, which she has sworn to attempt to repeal if elected. She called it double taxation. (At about 3:45 into the video the discussion starts. Double taxation comment at 6:10) The property subject to the tax upon one’s death has already been taxed, she said.

But in a Thursday editorial board, Dick Patten, president of the American Family Business Institute, made an even stronger argument. He suggested the estate, or death tax as he likes to call it, is a rejection of the Lockean principles of life, liberty and property — a concept borrowed by Thomas Jefferson for the Declaration of Independence. In fact, Jefferson signed the repeal of the nation’s first estate tax.

Patten asked: Are we taxpayers or serfs, such that “when our hearts stop beating our property reverts to government?”

The concept is that your property belongs to the state. It may take all of it when you die or any portion of it.

Under the Bush tax cuts the estate tax is zero for this year alone. This past year it was 45 percent of estates in excess of $3.5 million. Next year it goes to 55 percent of estates in excess of $1 million unless it is modified or repealed. Angle is for repeal. Sen. Harry Reid is for modifying.

Jefferson wrote in 1823, "The laws of civil society, indeed, for the encouragement of industry, give the property of the parent to his family on his death, and in most civilized countries permit him even to give it, by testament, to whom he pleases."

Patten’s practical argument is as compelling. He says every dollar taken by the government in the form of death taxes costs the government $2 in tax revenue that could have been generated by leaving the money in the private economy.

Reid says repeal of this tax will add $500 billion to the deficit, but Patten said last year the tax only generated $19 billion. He also argues repeal of the tax could add as many as 1.5 million jobs.

As a side note, John Locke wrote his “Two Treatises of Government” anonymously and only in a codicil in his will did he give his permission to have them published under his name.