Where I Stand — Brian Greenspun: Death, taxes, fairness

Sunday, July 23, 2000 | 10:26 a.m.

Brian Greenspun is editor of the Las Vegas Sun.

Death and taxes. I don't know what some people fear more.

First, I must declare myself. I don't enjoy paying taxes but I do so willingly because I believe that these United States have afforded me and my family a life and a governing system that I could not enjoy anywhere else. And that costs money. And I know that when I pay more taxes each year it is generally because I have been fortunate enough to have earned more, and that is a good thing. I believe that most people, when they are honest with themselves, agree with me.

That is why I have such a difficult time when people I know and respect belie their beliefs and act like sheep when it comes to discussing their taxes. Nowhere is this more true than in the most recent debate about estate taxes. People of great means and significant intellect turn deathly cold on this issue and refuse to listen to what might be another and even more responsible point of view. Nevertheless, I will try to explain why I believe the abolishment of all estate taxes is not a good idea for America. I will also try to explain the difference between good policy and good politics.

I have been accused of acting against my own self-interests for opposing the elimination of the estate tax. To that I plead self-interested and American. While I have as much or more to gain from the abolition of death taxes than most other people on this planet, I believe that there is a compelling case to be made in their favor. There is also a very good case to be made against them and therein lies the dilemma. This one, though, has a responsible and reasonable solution.

Let's get the easy stuff out of the way. Paying a tax just because we die doesn't make a lot of sense. Paying up to 55 percent of what we have worked our entire lives to accumulate makes no sense at all. Those two statements put me on a par with most Americans. Here is where we may differ.

I believe there was and still remains a very good reason for the government to levy some level of tax based on the ultimate accumulation of a person's estate. Originally, there was a great fear that without some way of throwing some money "back into the pot," the growth of dynastic wealth -- the kind that stifles innovation and growth amongst future generations -- would occur. Europe and South America are prime examples of countries that have fostered financial dynasties that have inhibited middle class growth and, by doing so, threatened or thwarted the opportunities for democracy. America did not need to follow suit. Thus an estate tax to take some back for the next generation.

Unfortunately, like many ideas in this country, it became bastardized by politics and greed. Since there was no constituency for the wealthy in this country -- who cared about them -- the level of taxes increased every time we needed money. Better to raise the taxes on the rich, went the theory, than to increase the burden on the rest and vast majority of America. That's why we find ourselves complaining that 55 percent tax is confiscatory. It is.

But that doesn't mean that the original reason behind such a tax, the prevention of economic dynasties that over time suck the financial lifeblood from succeeding generations, is not still valid.

Enter the politics of 2000.

The Republicans for too many years now have lacked the wisdom to stick to the principles of Lincoln and, instead, have embraced a kind of government that oppresses individual and personal rights. Somewhere along the line, the leadership has gotten confused and ceded many of the good and human issues to the Democrats. Now they need an issue to win over the voters, and taxes -- the universally disliked obligation of citizenship -- gets the nod. Instead of acting reasonably in the face of a surplus that could solve major Social Security and other "people" issues and pay down our enormous debt, the GOP has taken a no-holds-barred approach to taxes.

In that regard they have determined to make an issue of estate taxes. By passing the repeal of the death taxes they have put President Clinton in the position of signing the bill -- at which time they claim complete victory as the party of lower taxes -- or, if he vetoes the bill, they will claim that he is a tax-and-spend liberal. You know that old song. Even Democrats voted for the repeal because to do so might mean defeat at the next election.

I hope the president makes good on his veto promise because to end all estate taxes at this time is irresponsible. When he does, though, the political hacks will cry out that he and others like him (read that, Al Gore) are opposed to lowering estate taxes. And even though that is just not true, there will be many people who will swallow that line.

Let me tell you what is true.

There has been an offer on the table for some time that would increase estate tax exemptions well into the millions of dollars. Enough so that over 99 percent of every small business and family farm will be spared the ravages of a confiscatory death tax. For those with larger estates, they would only be taxed when the heirs decide to sell those assets, and then the tax would be the prevailing capital gains rate. It would be as if the original owner sold the business and paid the capital gains tax, except that it might be a great-grandchild doing the selling and paying the tax for the first time. In return, those in favor of a lower estate tax -- which, by definition helps the wealthy -- would have to provide some benefits to poor and working Americans. In short, a very fair and reasonable trade off and one that benefits almost everyone in this country.

That deal, though, would not create a campaign issue for the Republicans, who have squandered almost every opportunity to help ordinary Americans earn a piece of this great economic pie our country is creating, or feel more secure in their older age that their health needs would be covered. Instead, the hue and cry of "no more taxes" goes out and rational Americans become less so.

Taxes at death make little sense. But to the extent the long-term viability of our democracy suggests that they may, we ought to seek some common ground. I defy anyone to tell me what is on the table is unreasonable or unworkable. And I challenge everyone who cares to act in their own self-interests. Don't buy what the GOP is selling. Buy what is good for this country.

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