It?s clear from Michael Kinsley?s latest Atlantic article that he doesn?t completely buy into the narrative that Baby Boomers have amassed an incredibly poor record of achievement in comparison with their World War II-winning, Communism-destroying parents.
Still, Kinsley?s willing to play along with the argument in order to recommend one great gift Boomers could bestow upon future generations: tax revenue!
[T]hink of this as an extraordinary historic gesture in response to an extraordinary historic threat to our country and the world. Not a threat like Hitler, perhaps, but a huge threat nonetheless. True, this time it?s our own fault. But that recognition does not do anything to solve the problem. So Boomers will have to step in. Think of our doing so as one generation?s once-in-a-lifetime parting gift to those who follow.
Looked at this way, $14 trillion?it?s not so much. A widely noted 1999 study estimated that at least $41 trillion will have been transferred from parents to children and grandchildren between 1998 and 2052. Most of the transfers in the last half of that time period will be Boomers passing money along to the next generation. But in the first half, money will mostly be coming from the previous generation to the Boomers themselves. Boomers could forswear all or part of this unearned inheritance. Or, more realistically, they could allow the government to tax it.
Specifically, Kinsey?s focusing on the estate tax:
I am suggesting a tax that reaches far more people?essentially anyone who inherits any significant amount of money?but at a much lower rate. The principle behind the current estate tax (or once-and-future estate tax) is frankly redistributive: to prevent large private fortunes from growing, generation after generation, with the recipients accumulating power as well as money. It does this very poorly, because of tax shelters and loopholes (all made possible by the power that people with large fortunes have already accumulated). But that?s still the idea.
That might be Kinsley?s idea. Adam Nicholson of the American Family Business Institute recently offered Carolina Journal Radio a better picture of the reality associated with the estate tax:
