Re: Revision: Estate Taxes ... / carnegie & cold war

Gregory Alan Bolcer (gbolcer@endTECH.com)
Wed, 11 Aug 1999 12:36:33 -0700

Just to open up old subjects....
In 1916, when there was no federal income tax, Congress enacted
estate taxes to 1) help with the redistribution of wealth which at
the time was claimed to be concentrated in the hands of very few, and 2)
to pay for World War I (or the Great War). Two things, first a thriving
middle class invalidates the first, and we are in a peace time expansion
invalidates and we have a thriving federal income tax invalidates the second.
Some facts from the Death Tax Elimination Bill debate:
o 70 percent of all family owned businesses are not passed onto
the next generation (for a variety of reasons)
o 87 percent of all family owned businesses do not make it to the third generation.
(granted 55 percent confiscation of a person's estate may not be the sole reason, but...)
o small business owners pay taxes on business earnings throughout the lifetime
of the business, estate taxes are (subjectively IMHO) estimated on a firms total assets
o while estate taxes are devastating to middle class business owners, it only accounts
for less than 1.4% of all annual federal revenue.

Greg

Dave Long wrote:
>
>
> > Okay, I've changed my mind. No problem at all with estate taxes...
> > even 100% estate taxes... as long as you eliminate all gift taxes and
> > restrictions on gifting. ;-)
>
> I suddenly remembered that I'd run across Andrew Carnegie's essay on
> "Wealth" [1] back in April [2], and some of my arguments here have
> merely echoed his from over a century ago. He had a bit more moral
> righteousness to him, the "gospel of wealth" and all that, but then
> again, he did have the courage of his convictions: he managed to
> give a substantial part of his fortune in his lifetime, and perhaps
> had been planning on outliving 84 in order to dispose of the rest.
>
> -Dave
>
> [1] _North American Review_ (June 1889), pp. 653-664.
> <http://moa.cit.cornell.edu/MOA/MOA-JOURNALS2/NORA8089.html>
>
> [2] <http://xent.ics.uci.edu/FoRK-archive/apr99/0163.html>
>
> [3] "Distant Possessions: The Parting of Ways" (Aug 1898 NAR) has
> Carnegie's prediction that the US and (then pre-revolutionary) Russia
> would be the two powers least in danger of wiping themselves out in
> squabbles over foreign possessions. Depending upon how you look at it,
> it either took a half century or only two such conflicts for him to
> have been proved correct.

-- 
Greg Bolcer
email: gbolcer@endtech.com
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