Alex Blaze

Case study

Filed By Alex Blaze | December 07, 2009 1:30 PM | comments

Filed in: The Movement
Tags: estate tax, Jared Polis, money, wealth, Williams Institute

I got an email from a PR firm promoting this blog post at the Huffington Post. Here's a paragraph:

All of the proposals being circulated in Congress to address the issue, have titles that assert they provide estate tax "relief." However, one group that none of the proposals relieve from an unfair tax burden is hundreds of thousands of same-sex couples. Currently, when one member of a same-sex couple dies, regardless of their legal marital status, there is no possibility for a spousal exemption from federal tax, a benefit that all different-sex married couples enjoy. A surviving same-sex spouse is required to pay taxes (currently 45%) on any amount over the current exemption rate (currently $3.5 million).

The estate tax is at its lowest rate in a while because the Republican Congress and Bush White House wanted it to get lower and lower, but didn't want the fact that they were losing revenue from it increase deficits (more than they were) during the Bush presidency. You see, you need money to run a government, but that's a secondary concern when what you're really trying to do is give your buddies a tax break, which can only be done if you force someone else to foot the bill.

Actually restructuring the tax system to account for an absence of the estate tax is simply too much - some people might notice the fact that poor people already pay a larger percentage of their incomes in taxes and might try to put a burden on the rich some other way. So being completely irresponsible about it is actually the best way to reach a completely irresponsible goal.

According to the Tax Policy Center, about .2% of estates pay the federal estate tax. As one researcher put it:

"It hits about 2 out of every 1,000 estates, and these estates are the wealthiest of the wealthy," he says. "These are very high-income individuals who are affected by the estate tax."

Most Americans don't end up millionaires when they die, not in an economy that continues to increase the divide between the rich and the poor. This isn't the game of Life, this is real life, and, the way things are going, we'll consider ourselves lucky to end up with some form of retirement outside of Social Security.

That all said, God bless the Williams Institute for making the case that the richest .2% of same-sex coupled Americans shouldn't have to pay more taxes than their richest .2% straight counterparts.

While they're focused on a fairly esoteric instance of formal discrimination, though, the rest of us should remember why we have an estate tax, and why there was no unlimited exemption for married partners before the Reagan Administration. Having wealth transferred between generations with anything holding it back creates an aristocracy, one that would distort the way power works in the US even more than in the status quo. We generally recognize that people who inherit wealth generally didn't do anything to earn it and therefore have less of a right to it than they do to income. As the not at all left-wing Jared Polis put it:

"Without the estate tax, you in effect will have an aristocracy of the wealthy, which means you pass down the ability to command the resources of the nation based on heredity rather than merit," Democrat Jared Polis of Colorado said, quoting billionaire Warren Buffett. "America is and should be a meritocracy."

In the mean time, I've received several email blasts from GOProud, the new conservative gay org, pressing for an end to the estate tax entirely. They prove, once again, that if you're a Republican and not a millionaire, then you're a sucker.

This does go back to a fundamental question of who has power within the movement and who doesn't. If this was any other .2% of the LGBT community, then we wouldn't be hearing about it. There wouldn't be a PR firm emailing bloggers telling them to cover another blog post. There wouldn't be institutes doing studies on the deep impact of this discrimination. There wouldn't be orgs dedicated to gay folks in one of the two major parties constantly emailing people, telling them that they have to mobilize agianst this discrimination. And there wouldn't be university professors asking Congress to pass a law that specifically addresses this form of discrimination.

If it were any other .2% of the LGBT community, they'd be completely forgotten. I probably wouldn't even get the information necessary to write a blog post about it, making me part of the problem.

Even poorer groups of people whose population is larger than .2% of the community get ignored easily. Gay conservatives are usually the first people to say that issues at the intersection of sexual orientation and race, gender, poverty, or legal status aren't really "gay issues," and yet they seem to have little problem pointing out one of the few disparities that exists specifically at the intersection of wealth and sexual orientation.

(Disclaimer: I'm not calling for rich people to be kicked out of the community, I'm not telling rich people to shut up, I'm not saying that formal discrimination, no matter how rare and obscure, is ever right, and I'm not making fun of the Williams Institute or any of the authors of the subsequent literature on the subject, who, by any measure, are doing valuable work. If you're going to start a comment with one of those accusations, please re-read the blog post, as you didn't understand it.)


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Bill Perdue Bill Perdue | December 7, 2009 2:50 PM

Any estates worth more than $100,000.00 in property or money should be taxed 100% above that amount. Those estate taxes should go to a general fund to finance good housing, socialized medicine and full educations for working people. Spending them on military, penal or police budgets like the FBI, CIA or NSA should be forbidden by law.

All the privileges now offer to married straight people should be offer to all couples regardless of sexuality, to single people and to un married relatives living together.

Laws like that will only come with socialism. The fight of equality is, at the end of the day, the fight for socialism.

In truth, while Alex's description of Republicans who aren't millionaires as 'suckers' is correct the same thing applies to Democrats who voted for Obama. And I hope someone comes up with a better term than 'suckers'. Christers would do.

Honestly I have no problem with the estate tax for anyone because if a person is dumb enough to have money managed in a way that leads to these taxes he or she really should be relieved of the burden.
Estate taxes are properly avoided through the use of interlocked trusts. This is the way that some families have protected assets for generations. It isn't even that difficult.
This is part of why new money is often lost within a few generations and some old money seems to continue generation after generation.