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Proponents of the death tax would be less likely to insist the state raid a dead man’s wealth if they were required to attend the funeral, crowbar open the coffin, and pull the rings off the corpse. Some would. Sorry about that cracking sound, but it’s all for the greater good. But most are content to have unseen agents of the state perform the task.
I’m glad these people want the death tax, because it shows them for who they are: statists who believe the government has a right to your purse the second you lack the strength to hold it. But now and then someone really gives the game away, and that brings us to James Kwak. Writing in Medium today about the mythical family farm threatened by estate taxes, he says:
The mainstream argument for repealing the estate tax is that a “small” family-owned business — say, one worth “only” $20 million —would have to be sold or liquidated to pay the estate tax. At a 40% rate, the tax on such a business would be about $4.5 million. It’s theoretically possible, though not particularly plausible, that an estate including such a business might not have $4.5 million in additional assets to pay the tax, and not be able to borrow $4.5 million against the value of the business, and not be able to sell a $4.5 million stake to other family members.
The ability to pay a tax is now an argument for its necessity. Got it. But here’s the fun part:
Even then, you have to ask what the real harm is. Where does it say that the ultra-wealthy — $20 million puts you in the 0.1% — have a right to pass their businesses on to their children, as opposed to just their wealth?
Lovely, isn’t it? And honest: he may say that this non-existent right should be called into question dealing with ULTRAs, but of course the argument scales nicely. Where does it say you get the right to give your children that horseshoe your great-grandpa handed down from his Civil War days? It should be in a museum where everyone can see it. Where does it say you get to do what you want with your any of your possessions, really?
He also makes the argument that you could buy insurance to cover the death tax, admitting that it would be expensive, but hey, it’s better than liquidating the business, right? As for whether that money could be better spent on the business, improving facilities or raising wages, well, don’t be silly. We’re talking the Ultra-Wealthy here. They can trot out to the barn and squeeze another golden egg out of the goose.
I’m sure it makes some people feel virtuous to craft endless justifications for using force to destroy the business of a dead man who wished his heirs to carry on, but I’d like to think I would stop because it made me feel like a miserable little thief.