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Press Release

    The Death Tax: It’s About Values

    05/14/2002

    Have you ever heard an actual economic argument made for keeping the Death Tax? No one claims that by diverting resources from productive investments into tax shelters the Death Tax spurs economic growth and job creation. No one claims that forcing a family to sell a farm or a business to pay the Death Tax helps create wealth.

    Sometimes, the Death Tax is defended as a revenue raiser. But the case isn’t pushed too hard, because the cost of compliance with this tax is well documented. According to the Joint Economic Committee, it costs the economy more to comply with the tax than the federal government receives in revenue. I don’t think anybody believes that this is a good way to raise revenue.

    Lately, we’ve heard some politicians make what sounds something like an economic argument: “I support full repeal, but now is just not the right time – with the war and everything.” (Translation: Yes, I realize I am on the record supporting full repeal, but now that a vote is scheduled I need wiggle room). Of course, this very definitely is not an economic argument. Any revenue loss from full repeal would not occur for ten years, so the decision to permanently repeal the tax has nothing to do with the financing of the current war. But it still sounds good and somewhat economic.

    The plain facts are that the economic case for permanent repeal has been won – hands down. The argument liberals make against the Death Tax is an argument about values. And, we should welcome that argument as well because the values debate is on the side of those who want full repeal NOW!

    The Left has one value-based argument that they make over and over. “We shouldn’t give a tax cut to the wealthy.” That’s their entire argument.

    Over the next few weeks those of us who support full repeal should address the values debate and clearly articulate the values of savings, family, risk-taking, entrepreneurship, fairness, and simplicity – to name just a few. We can win the values argument as easily as the economic argument.

    The Death Tax punishes savings – a value we try to teach our children. Take for example, two individuals with the same lifetime income. One spends it on fancy cars and expensive vacations. The other saves in the hopes of creating a nest egg for his children. Who pays higher taxes under the current Death tax regime? The saver does – we are taxing a basic value.

    Family farms are sold and broken-up because of the Death Tax. The children may want to continue a long family tradition and perhaps pass it along to their own children, but they can’t, because the Death Tax is costly and the children need cash to pay it. How can anybody defend a tax that forces a family to sell a farm they otherwise would want to keep?

    The same is true for an inner-city small business. Our tax code should reflect the values we say America is all about. If a husband and wife take a risk and start a business in the neighborhood they grew up in, they and their children should reap the rewards of that risk. In low-income neighborhoods, the lack of capital and wealth perpetuate the cycle of poverty. What is the value of taxing capital created in those neighborhoods? Shouldn’t we want the capital to stay right where it is, rather than liquidating it and sending it to the IRS? It’s not only dumb economics, but it is the wrong values to be promoting.

    Estate planning is very complicated, in large part because of the Death Tax. While families will always have difficult choices to make about how to pass on their life savings, shouldn’t the government make the decisions easier, rather than more difficult?
    America is a government of the people, by the people, and for the people. Shouldn’t we, as a people, decide to make these difficult decisions as simple as possible? We can do that by permanently repealing the Death Tax.

    The Left doesn’t want to give a tax cut to a rich person, but they have no problem with that same rich person hiring a high-priced lawyer or financial planner to help the rich person shelter her wealth in Death Tax avoidance schemes. The Left thinks it is okay to have this rich person move her assets from productive investments that create jobs into financial products whose primary purpose is to help that rich person avoid paying the tax the Left thinks is so important to keep in place. What value are they promoting?

    A vote to permanently repeal the Death Tax is just weeks away. The United States Senate will be making a statement about the values we care most about. Let’s not forget to express the values that we believe in to our Senators. They need to hear from the people.