The House estate tax repeal proposal is a bad idea for reasons beyond the loss of about $19.3 billion in revenue.
Our country has seen a blossoming of billionaires in recent decades. In 1987, we had 41; in 2012, we had 425, down from 469 after the 2008 financial debacle. One of the largest loopholes is the transfer of assets to a family tax-exempt foundation. It avoids the estate tax entirely, making the estate tax essentially “voluntary” because you arrange affairs to avoid it entirely.
These foundations control vast amounts of wealth. No one will argue that many of them do a lot of good. However, the founders and their families generally maintain control and exercise a great deal of power and influence through their ability to direct the funds they control.
Oligarchs (robber barons in years past) are not good for a democracy. People are weak and subject to being influenced where money, power and wealth is concerned.
With that in mind, I would argue that while billionaires should be allowed to keep and control their wealth during their lifetime, at their death that wealth should be returned to the country via an estate tax with very high rates at very high levels, say on the order of 95 percent on all values above $50 million.
Radical, I know. But the social consequences for not doing something like this is much stronger in the long-run than the revenue it will generate, and that revenue is not peanuts.
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