Saturday, December 23, 2006

The Real Estate Tax Problem

There are several truths about the estate tax that need explanation. The first is that this tax affects less than 2% of the population. The second is that virtually no one, like with the income tax, pays the actual rate delineated by their assets. But there is a problem with the tax. As can be seen below, at the extreme end of the spectrum, taxes as a percentage of assets actually decrease. This, in my view, is the trouble with the Estate Tax. Its greatest purpose, in my mind, is not to generate revenue, but to prevent the formation of an oligarchy in this nation. Those who would lambaste the government for some sort of authoritarianism inherent in taking some of the fortune of the deceased should consider price in freedom society’s pay when too few accumulate too much wealth. Consider the price that Florence paid at the hands of the Medici, or the price Rome paid for the Juliae. If there is anything history teaches us, it is that Republicanism and inherited privilege cannot long coexist.



Wednesday, December 20, 2006

A New Voice

Due to various time constraints placed upon me in the past few weeks, I have been unable to update TQA at a regular frequency. To help me address this problem, and to add a new perspective to the postings, TQA now has a third contributor. The two entries below are both courtesy of nkrosse. As readers may no doubt notice, there are some areas in which our views are something less than equivalent. Occasionally I may offer a repartee to some of his more contentious points. This should be interesting.

Tuesday, December 19, 2006

Letter to New Secretary of Defense, Robert Gates

The Hon. Robert M. Gates
Secretary of Defense
1000 Defense Pentagon
Washington, DC
20301-1000

Dear Mr. Secretary:

It came to my attention today that President Bush has asked you to come up with a plan to increase the size of the military. Besides reinstating the draft, which is politically infeasible and contrary to our nation’s ideals concerning freedom of the individual, the only other option that comes to mind is allowing more people to serve by removing or relaxing barriers to enlistment. From my research and understanding, since the War in Iraq began, the US Army has raised the maximum age one is allowed to enlist at, lowered the minimum IQ score one is allowed to enlist with, and looked over the criminal records of enlistees who have committed violent crimes, all while maintaining the ban on homosexuals serving openly in its ranks.

Surely criminals with violent records pose more of a problem in our armed forces than homosexuals who serve openly. Contrary to what many highly ranked military commanders may say, allowing homosexuals to serve openly would not affect the military in a negative way. The Israeli military, which must deal with and combat terrorists and terrorist organizations for nearly every day, allows homosexuals to serve openly and without consequence (to either soldiers or the security of Israel). Any arguments concerning “unit cohesion” are not only absurd, but also harmful.

It has been noted by many that the “Don’t Ask, Don’t Tell, Don’t Pursue, Don’t Harass” policy, in forcing service members who are gay, bisexual, or questioning to keep their status hidden and “live a lie,” is representative of a greater problem in our government, that is a lack of candor. Mr. Secretary, I saw your confirmation hearing before the Senate Armed Services Committee, and my first impression of you was one of great awe and respect for the openness that you showed the committee and to the American public as well. Why would you implicitly ask any of your subordinates to exemplify anything less, especially when they wear the uniform of the greatest military the modern world has seen? Mr. Secretary, I respectfully ask that you recommend to the president in your plan to lift the “Don’t Ask, Don’t Tell” policy and allow all qualified persons to serve in the military without having to keep secret an essential part of their identity.

Sincerely,

Ideas for the Estate Tax

The late, great Milton Friedman once said of our tax system, "We have a system that increasingly taxes work and subsidizes non work." Today, the federal government taxes estates of people who are worth over $2 million at a rate of 55%. Now, I agree with Oliver Wendell Holmes', Jr., sentiment that taxes are the price we pay for civilization, but the way our government taxes those who have led successful lives is imprudent and unfair. The estate tax exists (or should exist) to tax capital accumulation over one's life (i.e. earnings that come from sources that have not been taxed already). It is entirely possible to be worth $2 million at the time of your death and to have accumulated most of that wealth through income, which, I believe, is already taxed at an exorbitant rate (more on that another day). It would be more prudent for Congress to raise the estate tax deduction to $25 million (the point where, today, one begins to earn more money from dividends and capital gains, which are virtually untaxed), and to lower the rate of taxation of estates to one closer to the highest tax bracket on income (which, if I remember correctly, was around 35% in 2006). This solution is, I believe, not only the best for our nation, but also a good compromise between those who wish to completely eliminate the estate tax and those who wish to maintain the current and harmful status quo. Let's hope incoming Ways & Means Chairman Charles Rangel can make this a higher priority in the new Congress than reinstating the draft.