Former chair of the Congressional Black Caucus G.K. Butterfield makes his pitch for the estate tax.
Before losing the election, Hillary Clinton said she would raise the estate tax to a phenomenal 65% for the highest bracket. This move was clearly political considering her need to hold onto Bernie Sanders supporters, but it does bring into question the morality of implementing what has become known as the “death tax.” The right and left seem unable to find any sort of middle ground on the issue.
Those who identify as conservative or libertarian are principally opposed to such a tax. To tax a person’s income once during their life is one thing, but to tax it again post-death is double jeopardy.
The left sees the estate tax differently. G. K. Butterfield (D-Nc), former chair of the Congressional Black Caucus and longtime Congressman, told Merion West’s Nikhil Sridhar: “The estate tax has been an important component of our tax code that promotes fairness and reduces economic inequality.” He correctly noted that “estates valued at less than $5.43 million or $10.86 million jointly are exempt from the estate tax,” which leaves only “0.15% of estates” subject to any tax at all. The current policy does, however, take 40% of the value of these particularly large estates.
Back in 2015, a bill was introduced in the House of Representatives to repeal the estate tax. The vast majority of Democrats voted against it, including Mr. Butterfield. Mr. Butterfield was concerned that this tax cut “would come at a cost of nearly $270 billion over ten years,” while giving “an average tax cut of over $22 million to each estate valued at over $50 million.” Mr. Butterfield argues that repealing the estate tax would increase the deficit while only benefiting the rich.
The American public actually takes a more conservative position on estate taxes. In a Fox News poll from 2015, 71% of respondents said inheritance taxes were unfair, with low income voters more likely than high income voters to be against inheritance taxes. Despite affecting only a fraction of the top one percent of Americans, public opinion has remained hostile to the estate tax. Kevin Drum of Mother Jones suggests the possibility that “people simply have an instinctive feeling that you should be able to bequeath your money to whoever you want… as long as most bequests go to family members, you’re dealing with a very deep, very primitive protective instinct that most people sympathize with no matter how rich you are.”
For a more complete perspective on estate taxes in America, perhaps we should take a look at our history. Many of the Founding Fathers were greatly influenced by John Locke, who would be very much opposed to an estate tax. Locke believed leaving an inheritance was a parental obligation. Some, however, were concerned about the concentration of wealth, fearing it could create a system that resembled the aristocratic British society.
With the current state of the union, the future of the estate tax remains uncertain. Not everything is open to question, however—at least according to Benjamin Franklin. As he once famously said, “In this world nothing can be said to be certain, except death and taxes.” But even he may have been surprised to see the government finding a way to combine the two.
Alex Baltzegar is a student at University of North Carolina-Chapel Hill.