News that the Obama Administration was implementing some rule changes in order to increase revenue from estate taxes reminded me of an old quote:

“The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.” — Jean-Baptiste Colbert, finance minister under Louis XIV.

and an ancient Chinese torture called Lingchi, or “death by a thousand cuts.”

The rule changes are esoteric, but they in essence elevate government greed over common sense and logic. The amount of money raised isn’t going to be large, but the people from whom it’ll be raised are the safest of targets.

The estate tax itself is an atrocity born out of greed and envy. It is an assault on our fundamental human nature: the desire to take care of our children. It tells us that success is only acceptable to a certain degree, that too much success is a Bad Thing. Work your whole life, save your money, invest wisely, all the while paying your taxes, and if you do a good job, Uncle Sam will take a great big chunk of your wealth away. Uncle Sam justifies this by claiming it has an interest in preventing the formation of dynasties, a claim that’s fetid hogwash. Uncle Sam’s real reason is naked greed, and Uncle Sam knows that it can get away with this greed by stoking the flames of envy.

The great big joke is that the extremely wealthy are able, thanks to our immensely complex tax code and all sorts of esoterica they and their best pals in Congress have written therein, to avoid handing over slabs of wealth to Uncle Sam. Those “foundations” that billionaires create? Sure, their stated purpose is charity, but they’re really about keeping a lifetime’s accumulation of wealth under familial control. The people most hurt by the estate tax are those at the low end of its spectrum – family businesses and farms. Families that are asset-rich but not cash-rich, and that haven’t engaged in decades of estate planning, sometimes find themselves having to literally “sell the farm” to pay the tax man. This latest rules change directly impacts this class of people.

This may actually be a desired outcome. Corporatism, aka economic fascism, the most apt description for the direction that this nation’s governance is heading, desires tight government control over privately owned businesses. It prefers those businesses to be few and large, and rules that lead to consolidation serve its ends. If the estate tax leads to family farms being bought up by Big Agriculture, corporatism is served. We see a parallel in one of the little-discussed elements of Obamacare: the driving of private practices towards absorption by big hospital organizations.

There is a powerful dissonance at work here. People of a statist bent, i.e. most liberals and progressives, see big corporations as evil incarnate. Their strongest desires are for government to tightly control those evil, rapacious, amoral beasts, yet the actions their government surrogates take actually feed and strengthen those big corporations. The recent brouhaha over “price gouging” by the makers of the Epi Pen is just one of countless examples: the manufacturer was able to sextuple the product’s price thanks to government protection and possible collusion. The estate tax works to agglomerate family businesses into corporations. Corporations, by the way, aren’t subject to estate taxes.

As I noted earlier, people justify the estate tax, a tax on money that has already been taxed, as necessary to prevent the formation of dynasties, and I realize that they actually believe this is a legitimate reason to steal a lifetime’s wealth from people who’d otherwise leave it to their children. This is a solution in search of a problem, given that there is a cross-cultural observation that dynastic wealth typically lasts 3 generations.

Shirtsleeves to shirtsleeves in three generations

is a proverb found in England, Scotland, France, Spain, Italy, Japan, China and elsewhere. Obviously, it’s not a universal fact, or true in all cases, but if it’s the norm, if it’s what commonly happens in the natural cycle of things, why does the government need to intervene?

Obviously, it doesn’t. The motivation, which I’ll repeat, is nothing so noble as the prevention of familial dynasties or growing disparities in wealth. It’s a base mix of greed and envy. Majorities have been doing bad things to minorities since the dawn of time, and this is no exception. It is only when the minorities are either protected by force of law (e.g. our constitution) or by substantial power of their own (e.g. the very wealthy and their coziness with politicians) that they can stand against the majority’s ugliness. The people at the bottom end of the estate tax “window” don’t have champions, so they’re geese whose squawking can be more easily ignored. Thus, the Journal’s editorial on this latest money grab will mostly fall on deaf ears. Many will say “this doesn’t affect me, and they’re rich anyway, and I’m sure they’re not paying “their fair share” of taxes anyway, and besides, better them than me.”

Our society’s actions demonstrate a desire that people be successful but not too successful. We applaud small businesses and entrepreneurship, but we deride Big Business and blame it for all society’s ills. I can’t say exactly where the tipping point exists, but there’s obviously a transition from Good small-business to Bad big-business. Too much success brings out the worst in others, who suddenly feel entitled to decide that someone is earning more money than he needs and should have the rest taken from him for the betterment of society. Thus, progressive taxation, thus the Alternative Minimum Tax, thus the estate tax. Thus all the things government does to make it harder for people to climb the economic ladder.

Societies driven by hate, greed and envy do not thrive. They eat themselves from within. They attack their own, nibble by nibble, piece by piece, group by group, until there’s no one left to hate or envy. Equality in poverty and misery may satisfy the haters, especially when they themselves have avoided being dragged down, but it doesn’t benefit society. When we stand silent as government does unto others, we are complicit in destroying our own futures.

“America will never be destroyed from the outside. If we falter and lose our freedoms, it will be because we destroyed ourselves.” — Abraham Lincoln

Peter Venetoklis

About Peter Venetoklis

I am twice-retired, a former rocket engineer and a former small business owner. At the very least, it makes for interesting party conversation. I'm also a life-long libertarian, I engage in an expanse of entertainments, and I squabble for sport.

Nowadays, I spend a good bit of my time arguing politics and editing this website.


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