If Reynolds is correct, there aren’t enough votes in the Senate to kill off the estate tax this year, so the action has turned to competing measures that would make it less of an economic burden. Reynolds’ column is here.
The battle lines here are those who think that the tax ought to be abolished entirely and those who want to keep (and maybe even increase) it on the grounds that a) the government needs the money and b) it helps to “level the playing field.” As usual, Reynolds smashes the arguments of the high tax, social engineering interventionists.
Here’s the line that drives the stake into the heart of the estate tax lovers: “Reducing or eliminating the death tax, accordingly, would provide greater incentives to accumulate larger estates. The result would be a larger national capital stock and a larger future flow of capital income to be used for all purposes — including charities.”
That’s the big blind spot for the tax lovers. They fail to consider the productive uses of capital that is left in the hands of individuals.
