Thursday, August 11, 2016

An article in Bloomberg... illustrates exactly why we have an estate tax. From "New Duke of Westminster Is Youngest Among World’s 400 Richest" (all emphasis mine):

Hugh Richard Louis Grosvenor, who became the 7th Duke of Westminster after the sudden death of his father Tuesday, joins the Bloomberg Billionaires Index today as his inheritance makes him the youngest billionaire among the world’s 400 richest people.

As duke, the 25-year-old now heads his family’s $12.3 billion estate, which includes hundreds of acres in London’s Belgravia and Mayfair neighborhoods, country homes, and Grosvenor Group, the London-based real estate firm with assets under management of 13 billion pounds ($19 billion) at the end of 2015.

That's kind of a grainy picture of the duke and his late father, taken at the former's "21st birthday party attended by royalty at the family’s ancestral home."

Now, I really don't have a problem with that kid. He may be a very nice person for all I know. But did he earn any of that $12.3 billion? If it was "gifted" to him, or if he "earned" it through the lottery or some other way, it would surely be subject to tax, right? Would anyone object to that?

But in another article in Bloomberg, yesterday, "Sliding Trump Seeks Solidarity With Establishment He Spurned,"

Donald Trump attempted to stop hemorrhaging support with an economic policy speech on Monday that contained a series of olive branches aimed at impressing Republican donors and leaders.

"I'm really heartened by it," said Brian Ballard, a former top Jeb Bush donor who is now Trump's finance chair in Florida. "Now we have a tax plan and an economic plan that we can get conservatives to rally behind and feel good about."

"Three cheers for getting rid of the death tax," Ryan spokeswoman AshLee Strong wrote on Twitter during Trump's speech.

Ballard also welcomed Trump's proposal, calling a repeal of the estate tax "the linchpin of the conservative movement: they get you when you're earning your money and they get you when you die."

Actually, they don't "get you" when you die; they "get" your heirs. And that's an important distinction.

Again, I have nothing against that young man in the UK. And I'm really not familiar with British tax law. (I assume his inheritance will be taxed.) But the point is, that kid didn't earn anything. And to pass down wealth from generation to generation, as it used to be done in Europe and the United States, creates an aristocracy based on heredity -- not ability or talent -- in which power resides in the hands of a small, privileged ruling class.

Republicans are always knocking Democrats for wanting to impose "European-style socialism." Are they now trying to impose a "European-style aristocracy?"

1 comment:

James said...

I forget sometimes that capitalism is considered a meritocracy. Even without an estate tax, rich kids have a ridiculous advantage in a world where almost everything is for sale.
As for earning money, I kind of think it's overrated. The motivation to make money was at the heart of the mortgage swindling and insider wall st investments that led to big hits to public pension funds and the credit of families.
Whenever I hear an interview with someone of achievement that I respect it seems they always say that making money was the least of their concerns.