In a lame attempt to defend the estate tax, Patrick Lester, Director of Federal Fiscal Policy with a progressive think tank, says this:
“The idea behind the estate tax is to prevent the very wealthy among us from accumulating vast fortunes that they can pass along to the next generation. The poster child for the estate tax is Paris Hilton — the celebrity and hotel heiress. That’s who this is targeted at, not ordinary Americans.”
Except that ordinary Americans are getting creamed on the estate tax, especially those who own ranches or small businesses, while the Paris Hiltons, Teresa Heinz Kerrys, and Joe Kennedy IIIs flourish.
The super-wealthy – those who really can leave eight or nine figures of wealth to each child – are functionally immune from the estate tax. The schlubs who have a large cattle ranch get creamed. We aren’t taking almost half of the Hilton’s estates each generation (which is what would happen with a 45% estate tax on everything over $1 million), but we are taking half of a lot of small businesses and farms. Mr. Lester is probably the type to complain about big business and Monsanto, but forgets that the antidote to that is small businesses and family-owned farms.
Whatever one may think about taking half of Paris Hilton’s inheritance before it hits her pocket, despite having already taxed that money several times, our current estate tax system leaves huge fortunes intact but creams upper-middle class families, those with small businesses, and people whose parents die young.