Monday, December 13, 2010

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As I was sitting in my truck this morning, trying to avoid freeing to death, I was listening to Marketplace. Alan Sloan from Fortune magazine (a regular guest on the show) was being interviewed. Let me repeat the scene. A radio program dedicated to following the market, interviewing a guy from a magazine about accumulating wealth.

The following conversation took place.

CHIOTAKIS: How much interest, Allan, do you think people have in this? Does the average Joe really care about estates? I mean most Americans don't have estates, right?

SLOAN: You know that, and I know that, but most people don't know that because over the years, the estate tax has been changed to the death tax, which makes it sound like it applies to everybody who dies, and it doesn't. It's an example for the triumph of propaganda over reality.”

(emphasis added)

Now...just who do you think brought you this “triumph of propaganda over reality”? That would be the party of Newt Gingrich and Dick Armey -- the Republican Party.

The thought occurred to me that most of the Republican shenanigans like this are so obvious that they wouldn’t even make a good detective novel. As soon as you ask “who-done-it?”, the answer is obvious. Means, Motive and Opportunity. Means? Rich people. Motive? (Big DUH) Rich People. Opportunity? Rich people.

What? Poor people are going to say, “Don’t tax the rich, tax me instead”? As far as motive, how’s 5 billion dollars sound? Is that motive enough? And $5 billion will buy you all kinds of opportunities.

You can read about the surface issues here:

Legacy for One Billionaire: Death, but No Taxes

”A Texas pipeline tycoon who died two months ago may become the first American billionaire allowed to pass his fortune to his children and grandchildren tax-free.”

My main trouble with the issue is a little deeper. I worry about inherited power. Just because you’re the offspring of a guy that was smart enough to amass a fortune doesn’t mean you should have that much power. I think I have some pretty good company on the issue. A guy named Roosevelt.

”As a matter of personal conviction, and without pretending to discuss the details or formulate the system, I feel that we shall ultimately have to consider the adoption of some such scheme as that of a progressive tax on all fortunes, beyond a certain amount, either given in life or devised or bequeathed upon death to any individual—a tax so framed as to put it out of the power of the owner of one of these enormous fortunes to hand on more than a certain amount to any one individual; the tax of course, to be imposed by the national and not the state government. Such taxation should, of course, be aimed merely at the inheritance or transmission in their entirety of those fortunes swollen beyond all healthy limits. ”

That was Teddy. Franklin had the same idea. He even credited Teddy with it..

”The transmission from generation to generation of vast fortunes by will, inheritance, or gift is not consistent with the ideals and sentiments of the American people.

The desire to provide security for oneself and one's family is natural and wholesome, but it is adequately served by a reasonable inheritance. Great accumulations of wealth cannot be justified on the basis of personal and family security. In the last analysis such accumulations amount to the perpetuation of great and undesirable concentration of control in a relatively few individuals over the employment and welfare of many, many others.

Such inherited economic power is as inconsistent with the ideals of this generation as inherited political power was inconsistent with the ideals of the generation which established our Government.

Creative enterprise is not stimulated by vast inheritances. They bless neither those who bequeath nor those who receive. As long ago as 1907, in a message to Congress, President Theodore Roosevelt urged this wise social policy:...”

Me? I’m a pessimist. I’m betting the propaganda -- and the money behind it -- wins again today.

Don Brown
December 13, 2010

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