Thoughts on the estate tax.
There is a great deal of controversy regarding the estate tax. Conservatives believe that taking a person’s money that he/she has worked hard for is not fair. Liberals feel that some of that money should be redistributed downward.
Here are some thoughts of early economists, founding fathers, and other notables.
Most of the founding fathers did not want America to become like the Europe they had left. They did not want a landed gentry and all the wealth and power handed down from generation to generation.
George Washington said, “legislators cannot invent too many devices for subdividing property.”
John Adams, our 2nd President, believed that entrenched economic inequality would create a political oligarchy in America because that was the relentless pattern throughout European history.
In a letter to John Adams, Jefferson, who was serving as ambassador to France, wrote that the extremity of European Inequality was not only morally suspect but also economically inefficient.
Some others wrote about breaking up large estates: Adam Smith (the free-market patron saint), Thomas Paine, Herbert Hoover, Theodore Roosevelt, Warren Buffet, Bill Gates, and his father, Bill Gates Sr.
The estate tax is only relevant to 1% of deaths in America. It does not hurt farms or small businesses because you can inherit $11.58 million tax-free from each parent.
Because of all the loopholes and trusts, the large estates pay about a 20% estate tax.
Wealth transfer by the early 2030s will range from $15 trillion to $68 trillion. This transfer is from the boomer generation to the millennial generation.
Below is part of a talk given by Bill Gates Sr. to a group of businessmen in Maine about keeping the estate tax and his thoughts on a trip to Africa. From a book titled “Born On Third Base” by Chuck Collins:
“I was deeply impressed by the spirit and resourcefulness of the people I met. But the infrastructure and conditions for business are quite different in Abuja than here in Portland, Maine. Take your sweat and talents and try to grow a business in Abuja or Kinshasa. Many years later, you will still be toiling with little to show. The purpose of estate taxes on the wealthy wasn’t merely to generate revenue but rather to safeguard ‘democracy against the oligarchy.’
For example, after the revolution, John Adams advocated for laws that forced families to divide their estates among all their children to prevent European-style feudalism.”
The goal of a republic, he believed, was “the greatest happiness for the greatest number.”