Where I Stand — Hank Greenspun: A look at Reagan’s ‘royal tax cut’

Friday, May 25, 2001 | 8:50 a.m.

Note to Readers: This column originally appeared on Aug. 2, 1981.

"This is a big day for the aristocracy of the world."

House Speaker Tip O'Neill might have been referring to the royal wedding in England when he took to the airwaves to bemoan the resounding defeat he personally suffered in his attempt to thwart passage of President Ronald Reagan's tax package.

He bitterly assailed the "royal tax cut" the president almost single-handedly bludgeoned through Congress in a political triumph unequaled since Franklin Delano Roosevelt's steamroller through both houses of Congress back in his first term during the Great Depression.

O'Neill was doing a little populist work in whacking England, which goes well in some sections of Boston, and also lambasting the wealthy of our society with his "aristocracy" crack, which is always good for some votes with lower-income groups.

But who is the real aristocracy, if O'Neill's analysis of the tax measure is right?

Standing to gain a great deal from the tax cut are the women and children of the nation who are, in essence, the true royalty of any democracy.

It is the women and children who have been the victims of a tax situation that has deprived them of the right to a life of economic security.

As old as human aspiration and the very cornerstone of the American way is the principle of a secure family, with the father working hard all his life to assure a comfortable future for his wife and children.

An important phase of the Reagan "royal" tax cut is the estate tax in the event of death.

Under the old plan, the exemption to the estate is $150,000, which wouldn't save the family residence from going under the hammer to pay the taxes with inflation raising the values of original $25,000 homes to six figures under present appraisals. This means the wife and children would be left without shelter just to pay the IRS.

A family business that the father and mother practically slaved all their lives to leave to their children wouldn't have a prayer of survival because the kids would have to sell everything just to satisfy the estate tax bite.

The $600,000 exemption under the Reagan plan affords the survivors a fighting chance to save some of the security that the father devoted all his initiative, energy and time to create something with which the family can carry on.

The new plan also provides for an unlimited amount, tax free, to be left to the surviving spouse, which guarantees the widow a little more than just heartache in the event of the husband's death.

It is an elementary fact of life that women live longer than men by about 10 years. If it is a May-December marriage as in my case, the survivor would have a good 15-to-20 year life span to look forward to.

Instead of the wife having to break the entire family fortune just to pay the taxes and become a liability on society, under the new plan the survivor becomes a very desirable, negotiable asset.

It is also a fact of life that a comely widow woman with a sizeable nest egg can attract innumerable handsome vultures willing to inhabit the nest and hatch the eggs.

Without the substance that has always been a lure to entice men into marriage, a widow with a passel of children and no visible means of support would be a burden on all the aid programs with which the federal bureaucracy has overburdened the taxpayers.

The aristocracy of America are the women and children whom the male breadwinners court, honor, love and pay homage to, for this is the aspiration of every decent human who is privileged to raise a family.

The old man who hopes to precede those he loves on the great adventure away from this old earth can live and work today with the comfortable assurance that his endeavors and good fortune will reap a secure future for those he leaves behind.

And in this scheme of life, it does not include the IRS, which under the old plan winds up with everything.

So this old man welcomes the Reagan plan because we now have the prospect of a great society that will insure a strong and productive America based on the well-rewarded energies and efforts of the individual.

President Reagan is in some large measure returning us to what America of the founding fathers is all about.