An unlikely trio, but the three came together on Monday night. On NPR’s Tavis Smiley Show, the Independent Senator from Vermont, Bernie Sanders, was a guest and the topic of discussion during the segment I heard focused on the estate tax. Specifically, Senator Sanders was lamenting the lost revenue off of the estate of the late George Steinbrenner. It is estimated that his heirs saved $500 million in estate taxes at the time of his death. And that irks Sanders. From the sympathetic tone from Tavis, it seems these two share a common view of financial inequality in America.
The interview was non-confrontational which seems typical these days on liberal-leaning programs where similarly liberal-leaning guests appear. As an example, Tavis asked the senator why an estate tax is needed and if it’s fair. The senator gave a short, evasive answer that was meant to play on the emotions of listeners, but failed to really answer the question. So, to press the point, Tavis apologetically asked the question again, suggesting he was simply playing the Devil’s advocate in asking. The senator explained that it simply is not fair for families to hold on to money and to be able to build financial dynasties.
And so the Federal government has one more chance to get money out of a person who has worked hard, achieved the American dream, and wants to provide for his or her survivors. It’s a final shakedown.
The funny thing is that the wealthy American who doesn’t employ estate managers probably deserves to pay an estate tax when he or she dies. The smarter ones will do everything they can to manage their estates in such a way as to minimize or eliminate tax liability as much as possible.
The only argument I have heard that makes any sense for an estate tax is that “Large estates are comprised to a large degree of ‘unrealized’ capital gains that have never been taxed; the estate tax is the only means of taxing this income.” So why isn’t this the argument that is more commonly heard? Probably because too many Americans wouldn’t get it. It’s more effective to beat the drums warning of financial inequality and redistribution of wealth than it is to apply the more intellectual argument of capital gains.
The true shame of it is that Uncle Sam is no better than “Joe the nephew” who eagerly but distastefully awaits the death of a rich relative in order to inherit what he can.
The American dream of the 21st century is to go to school, do “ok”, graduate, maybe find a job, live off of government programs as long as possible, be given a house, get cash for a car, have government-sponsored health care, and let those Americans living the dream of the 20th century fund it.
As for Bernie Sanders, there is no doubt that he is a socialist. Estate tax or not, his goal is to see the wealth of Americans redistributed to the government for the sake of using it to fund programs for the less fortunate. The philosophy falls in line with Barack Obama’s “spread the wealth around” position. Interestingly, a friend summed it up with this, and I paraphrase: A long time ago, this nation decided that we don’t want to see our citizens living and dying in the streets.
The more I learn about this great nation of ours, the more I wonder where America has gone off to. This isn’t the America I grew up in and I doubt we’ll ever see that one again.