"I think not having the estate tax recognizes the people that are investing as opposed to those that are just spending every darn penny they have, whether it’s on booze or women or movies.” In one sense, this utterance from GOP Senator Chuck Grassley of Iowa is a trifle, something a man of a certain older generation might say. But while it casually asserts an obvious fairness in cutting the taxes of those who have money to invest, a look beneath the surface shows that fairness to those who work hard for a living is not what either the estate tax debate or the language of his original comment are about. Indeed, his phrasing colorfully and concisely captures so much of the backwards and classist thinking behind Republican efforts to lower the taxes on the wealthiest among us.
The laudable wish to pass something on to one’s posterity and the incentive this can provide for a person to work diligently is not in dispute. What IS in dispute is how much of this money should be taxed. Many in the GOP say none or only a little should be — a sure recipe for instituting a system of inherited wealth and even aristocracy at odds with American democracy, as massive sums of money would be passed from hard-working parents to their trust-fund progeny, and in the next generation from the idle rich to yet even more work-ethic-deprived offspring, in a debilitating spiral truly awful to behold (as our prime exhibit, I refer you to look no further (if you can stand it) than the Trump kids).
An estate tax can and should be relatively high for the basic reason that its earner is no longer around to use his or her wealth, and those who would inherit it have not actually worked to earn it. A society also needs to balance the right to pass something on to one’s relations against the larger social goal of limiting the tax burden on the living. This point is not raised by defenders of the inheritance tax nearly enough; taxes need to be paid by someone, and if rich, dead people aren’t paying them, then it’s likelier that poor, living people will be on the hook — and how exactly is that fair? Reducing or eliminating the estate tax directly rewards not those who have earned money, but their heirs; it is a tax that by definition will never benefit the actual earner.
If poor people spend all their money, it is because they do not have much of it, and do so in order to purchase the basic necessities of life. Grassley’s comment opens a window into how, say, a conservative politician might convince himself that rich families deserve to make their families rich in perpetuity. In invoking the tired image of poor people who don’t invest because they spend their money on foolish things, the senator elides the common sense fact that the main reason poor people don’t invest in things like the stock market is simply because they are poor. In point of fact, it is kids who inherit scads of money without having to work for it who are relatively more inclined to spend their money “on booze or women or movies,” — to which we can also add a few exciting possibilities, such as “yachts or baccarat in Monaco or a membership at Mar-a-Lago.”
