Sometimes, a reader’s comment will be so insightful that it’s a shame to let it get buried in a comment section many may not see. This is such a comment, by my longtime reader Elle. She also shares her knowledge at the Usenet group misc.taxes.moderated where I am one of the mods.
This ‘guest post’ by Elle is in response to my recent The State of the Estate Tax.
“The years immediately following the repeal of the
inheritance tax [in 1902] were witness to an unprecedented
number of mergers in the manufacturing sector of
the economy, fueled by the development of a new
form of corporate ownership, the holding company.
This resulted in the concentration of wealth in a
relatively small number of powerful companies and
in the hands of the businessmen who headed them.
Along with such wealth came great political power,
fueling fears over the rise of an American plutocracy
and sparking the growth of the progressive movement.
Progressives, including President Theodore
Roosevelt, advocated both an inheritance tax and a
graduated income tax as tools to address inequalities
– From the IRS article The Estate Tax: Ninety Years and Counting.
Tax laws do not come about in a vacuum. Voters put people in Congress who make these laws. Presumably those in Congress consider arguments like the one above, along with what their constituents say. Many Christians (among others concerned about poverty) reject Dave Ramsey’s argument. Many would call his stance on this issue the immoral one.
All is far from perfect in our economy and the way government is addressing economic problems. I see a lot of resentment from the lower classes that is justified. I also see the lower income classes denying, at a stunning rate, they have any self-responsibility. These are the people at the bottom without whom economies cannot function. Capitalists do not quite get that you have to watch out for the little guy/gal or businesses will implode.
People are mad. I think things will get worse before they get better. When they do get better, it will be because people seek reason behind actions instead of resorting to “Gimme this; gimme that!” Eventually, people will come back to the realization that they get more of what they want–better stock dividends, better economic growth, more for you and for me–when we work together. It can be done in a capitalist society. It has been done in the past.
(Thanks, again, Elle. A great take on this issue)