In another of his wonderful letters that explain reality to statists, Don Boudreaux here writes about the difference between not taxing money someone has earned and a government gift. (I particularly like the reference to the divine right of kings.)
Editor, Los Angeles Times
Dear Editor:
You write that “Washington’s compromise on estate taxes provides an unnecessary handout to a few thousand wealthy families” (“The state of estates,” Dec. 9).
Whatever are the merits, or lack thereof, of a tax on estates, you are
deceptively wrong to call a decision not to raise that tax a “handout.” Because
taxes are paid from resources created and earned by private citizens, resources
that are not taxed are not “handed out” to the people who created or earned
them; these people already rightfully own these resources.
It makes no more sense to describe government’s (non-)act of not raising taxes
as a “handout” than it does to describe my (non-)act of not stealing your purse
as a “handout.” Failure to understand this fact creates the mirage that
government is the source and original owner of all wealth. Not only is such a
notion of the state utterly false empirically, it is also – because it is a
close cousin of the notion of the divine right of kings – the seed of tyranny.
Sincerely,
Donald J. Boudreaux
Professor of Economics
George Mason University
