Actually I believe it was Karl Marx that proposed eliminating the right of inheritance. Anyway, so let me get this straight. If a rich person chooses to fund their child’s education at Harvard while he/she is alive, that’s okay, but if he/she dies first, then it must be taxed to prevent aristocracy? This is silly. All the death tax does is force people to make suboptimal spending choices to evade this tax. Further, the largest estates can avoid taxation with clever incorporation. An estate can be set up as a Limited Partnership with the heir as the limited partner. Each year, the general partner can donate a percentage of the estate to the limited partner. As I recall, the general partner need only maintain 1% of the overall equity in the partnership. So, over one’s lifetime, a wealthy individual can donate up to 99% of an estate to an heir without taxation by simply setting up a clever business arrangement. Smaller estates cannot afford to pay to set up this business arrangement, but it’s chump change for the larger estates. Let’s stop fooling ourselves into thinking we can take from the wealthy. They will ALWAYS find a loophole and when they can’t, they will take their money somewhere else (ala Cayman Islands,etc). All we’re doing with the death tax is sending money overseas.

The American system allows for the market to remove the fortunes from the wealthy, as seen in our current economic mess. People are free to earn wealth as long as they innovate and maintain it, even vast sums. Another thing that is not taken into consideration is that 1 million dollars isn’t what it used to be, many doctors, lawyers and small business owners are being hit with these taxes when trying to pass their practice or firms onto their children. The death tax is doing little to stop the creation of Paris Hilton, but it is doing a lot to stop people on the cuff from improving their circumstance.

The wealthy are great contributors to society, which is precisely why they own such wealth. For example, there are 2 people in the history of the US that are responsible for the fact that I drive a car to/from work. As I don’t come from a wealthy family I would never have been able to afford a car and fuel for it but for John Rockefeller and Henry Ford. These two men selfishly sought incredible fortunes for themselves, but in the process they made the standard of living for the rest of us many times better. People don’t get ultra rich by offering nothing to society; it has to be through breakthroughs in commerce that make all our lives better.

So, what’s the problem with death taxes? Well, how do we expect people to develop businesses into Ford Motor Companies and Standard Oils when we’re going tax them out of existence before they can get to that point? Obvious said it right when he/she noted that up and coming business are often liquidated to pay taxes courtesy of the death tax. This is just wrong. Besides, note my initial point in this string. There are ways around the death tax, but they are often suboptimal for society. Why do we feel the need to punish success out of envy?