• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Death Tax and Democracy

    The fate of small, family-owned businesses hangs in the balance as Congress decides whether or not to finally put the crippling 55% death tax in a coffin. The toll the death tax takes on family-owned businesses has been clearly documented as has its infeasibility as a federal budgetary tool. But just as important as these concerns is the erosion of individual liberty that this tax presents.

    Alexis de Tocqueville recognized the role of inheritance laws in a free society in his Democracy in America:

    Through [inheritance laws] man acquires a kind of preternatural power over the future lot of his fellow-creatures. When the legislator has regulated the law of inheritance, he may rest from his labor. The machine once put in motion will go on for ages, and advance, as if self-guided, towards a given point. When framed in a particular manner, this law unites, draws together, and vests property and power in a few hands: its tendency is clearly aristocratic.

    The “aristocratic” laws that de Tocqueville refers to specifically are the Old World laws of entail, which, as any fan of Jane Austen knows, were laws that restricted the ability of landowners to split up their estates, requiring them instead to pass complete estates to the oldest son or closest male relative. Not only did this concentrate wealth and freeze class distinctions, it also severely restricted personal liberty, as de Tocqueville seems to have perceived by remarking that when a legislator has exercised power over a person’s ability to control his own estate after death, “he may rest from his labor”—in other words, he has governed his constituents’ personal fate as intimately as he possibly could.

    Liberals constantly argue that the death tax is necessary to prevent the concentration of wealth in a limited number of families. The truth is the exact opposite, however. The death tax is actually a stern government mandate on legacies that erodes the freedom of society. Like the law of entail, it hardens economic distinctions by making it more difficult for families to make their legacies mobile and flexible, leaving that privilege only for those wealthy enough to hire the expensive estate lawyers and accountants necessary to protect their funds. In the meantime, it severely restricts the ability of regular families without the resources to pay for expensive estate planning, especially those with small businesses, to pass along the business accomplishments of their lifetime to be built upon by the next generation. The death tax is even worse than entail because the government confiscates the hard-earned returns of families. At least under entail the government didn’t benefit directly. What better discouragement to the entrepreneurial spirit of the middle and working classes than to ensure that the fruits of their hard work and ingenuity can’t be passed on to the next generation?

    The death tax is more than minor point of squabbling between economic policy wonks. Resisting the return of the death tax means protecting a critical element of personal liberty.

    Posted in Economics [slideshow_deploy]

    13 Responses to Death Tax and Democracy

    1. Pingback: Tweets that mention The Foundry: Conservative Policy News. -- Topsy.com

    2. Clois, Texas says:

      It is a shame, that in this country…the government (the people we put in congress and write laws to protect us all) can pretty much dictate to the people who are it’s constituents and take hard-earned money from us. Ya know, I am fed up, it is time for the people of this country to stop this down hill slide and march (Armed on Washington) and put the entire government in chains, then shoot the entire lot. Then Legal Americans can put a government of ordinary citizens (Not PH,d, Lawyers, Doctors and career politicians and Judges) in that will truly represent all the rest of us. It will soon be ” another revolutionary event” a repeat of 1776

    3. John Omaha says:

      All the more reason to spend a few bucks and incorporate.

    4. mike gray says:

      The Death Tax must die and be buried deep. It is not just a tax but a killing of the American Heritage! We work hard all our lives and in one second they think, that taking by law,1/2 of what a citizen posesses @ death, that their actions will go unnoticed. The Gov. is sadly mistaken! We have to take back our country, bring back God in government, do the right thing, live the right way and try to create a life with less stress. We are @ the edge of the pit without a bottom, and If the Dems think all of us are going to willingly jump in, maybe they better think twice. God Bless America and true patriots cause the future for our children and grands can be very good indeed! We have a choice and politics is not the answer!

    5. Pingback: At War: In Iraq, ‘We’re Still Getting Hit’ | BeyonceSpecial

    6. Chris Virginia says:

      It is time to kick the bums out but an unarmed approach would be much more effective. If millions of unarmed Americans marched on the Capitol Building to demand the removal of the tyrants there would be no bloodshed with the same result.

    7. Dolores Ocala says:

      I am elderly. Saved our money so we would not be a burden to our children. If the death tax is not reinenstated, maybe we should just spend it and let the government take care of us in a nursing home.

    8. Joseph Gerant, Boyne says:

      Historically the circle of government has been: anarchic to autocratic, conservative to autocratic, communal to autocratic, a fluid order and sometimes overlapping. We are in a war to preserve our freedoms and way of life. Pain will educate very rapidly and in the end decide the battle. Schools, various media, news, films, work to carry our message. Brush your teeth, wash your feet, and flush it. Carry on

    9. Bigotist says:

      Clois, Texas-

      I agree that a revolution is on the burner- However, you must consider the raisin head in the oral office has promulgated that the military may kill it's own citizens-

      I'm loaded, locked and the safety is off, and I would be proud to stand by your side for our freedom– Lets get 'er done !!!!!!!

    10. Norma in Nebraska says:

      It is not going to take being armed and marching on Washington. In case you haven't noticed these guys/gals are cowards . . . most of them won't even hold town hall meetings!!! The people you need to be most concerned about are the President and all of his czars who are not elected, not vetted, and only answer to him.

      In fact, I am pretty sure that our current administration is just waiting for an unruly crowd so they can declare marshal law!!! I don't think there is a cold chance in hell that our own military would take up arms against us, but you really should be more worried about the minions of Big O. He gave a speech in Colorado Springs, CO in 2008 about developing a private army, as well funded and armed as our military, who would work and answer to the President in case of "emergencies."

      This sounds an awful lot like the Gestapo or the KGB . . . be very careful my fellow Americans. Big Brother wants all the power and all the money!!!!

    11. William, Illinois says:

      Thomas Jefferson: "To take from one because it is thought that his own industry and that of his father's has acquired too much, in order to spare to others, who, or whose fathers have not exercised equal industry and skill, is to violate arbitrarily the first principle of association — the guarantee to every one of a free exercise of his industry and the fruits acquired by it."

    12. Ron Lind in Alaska says:

      The value of items in an estate in excess of the tax basis of the item should be taxable income to the heir when sold or otherwise converted by the heir. A small amount should excluded so the paperwork for most people is avoided.

      This would treat the sale of these item just as it would be if the person had sold or converted the property before their death.

      The date of the sale or conversion of the property should not affect the amount subject to tax.

    13. RW, Nevada says:

      The clamor about reinstating the death taxes brings to mind the exemptions Congress has enacted for themselves relative to Obama's Health Care.Would it be a surprise to learn that members of Congress (active and retired) are exempt from the death tax provisions. Congress often acts as an entitled class with numerous self-imposed privileges and exemptions. They pass legislation that many have never read or fully understand and expect impunity for their non-actions. It would not surprise me if Congress has access to free estate planning to avoid death taxes or that they are statutorily exempt from Death Tax provisions.

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.