It is the nastiest piece of looting in the federal tax code.
It is a tax, not just on one year's earnings, but on a whole lifetime of work. It is an extra tax applied to income that has already been drained by decades of income taxes, corporate taxes and capital gains taxes. It is a tax that allows the federal government, like an unscrupulous relative, to cash in on a wealthy person's death by looting up to 55 percent of his assets. This is the estate tax.
In a perverse act of self-abasement, however, this ugly tax has found fervent supporters among the very group who are its biggest victims.
Last week, 120 of the super-rich -- led by Bill Gates's father and including super-investor Warren Buffett and financier George Soros -- signed a petition opposing the repeal of the estate tax. This seizure of their assets, the signers claimed, is good because it encourages charitable donations and helps fund the welfare state. In other words, anything that separates us wealthy folks from our money is good.
These people are, of course, free to spit in their own faces. They are free to sacrifice the wealth they have worked hard to earn. No one is stopping them from voluntarily giving their money to charity or stuffing it down the rat-hole of the federal budget.
The vicious purpose of their petition, however, is not to dispose of their own wealth, but to dispose of other people's money. Other wealthy people might not agree to sacrifice their life's work to the government -- so, the petition signers tell us, let's force them to sacrifice it anyway.
The reason why this petition has gained so much attention is that some of its prominent names are genuine self-made men, not the usual guilty heirs and Rockefeller-style "limousine liberals." People like Warren Buffett know the thought and effort required to create their fortunes; you would think they wouldn't be so eager to throw it away. But we live in a culture that constantly condemns such men for their productive achievement. Some of them, apparently, have internalized this moral perspective and seek to punish themselves. The Gates petition is their manifesto of self-abasement.
These men are doing themselves an injustice -- but worse, they are doing an injustice to anyone else who wants to match their productive effort.
The first victims, of course, are other self-made men. The idea that the government should seize half of a man's life-savings would be shocking if it were done to someone in the middle class. That's why the death tax applies only to estates greater than $675,000; any assault on the rich is considered fair game -- especially when their fellow millionaires come forth to approve of the looting.
Some of the worst damage, however, is suffered by those with modest fortunes. These are the small-town businessmen you hear about who work hard all their lives to build a successful family business -- say, a chain of hardware stores -- only to have the whole thing carved up and sold off after their death to pay the estate taxes.
The other victims are the rest of us. The assets of the wealthy are actively invested in the economy, where they go to start new enterprises, hire new workers, research new innovations and feed productive businesses. Once the government grabs it, however, this money is simply consumed -- by being poured into the mouths of welfare bums and Washington bureaucrats.
These days, nobody cares what happens to the rich, and people consider it bizarre if anyone steps forward to defend a billionaire. The rich, in the conventional view, are rich enough to take care of themselves. But this is short-sighted. What is at stake is not the wealth of a particular person or family; what is at stake is a basic moral principle.
When the Gates petition's billionaires condemn their own wealth and offer it up for public sacrifice, they are endorsing the idea that those who produce wealth have no right to it. But if the government, as they claim, has the right to seize the end-product of a whole lifetime of a man's work -- then no one is safe.
What we need is an opposite manifesto. We need a group of wealthy individuals to stand up and declare that they have earned their wealth and deserve to keep it. That's the only way that any productive person -- with any degree of wealth -- can safeguard the product of his life's work.
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