Can A Drive By The 1% To Institutionalize l'aristocratie Here Be Slowed Down Without Bloodshed?

You would never know it by talking to an imbecile dressed up in a tri-corner hat and calling himself a teabagger-- although they stopped calling themselves that when someone told them what it means-- but the establishment of an aristocracy of inherited wealth in this country is about as antithetical to what the American Revolution was all about as... unification with the United Kingdom. And yet decades of conservative policies and the Republican Party agenda has been based on exactly that-- establishing an American aristocracy of inherited wealth. Their aversion to an estate tax-- which the corporate media they own has successfully dubbed "the death tax"-- is a clear indication of their barely disguised intent. Last year Lexington took it up at The Economist.

With Thomas Jefferson taking the lead in the Virginia legislature in 1777, every Revolutionary state government abolished the laws of primogeniture and entail that had served to perpetuate the concentration of inherited property. Jefferson cited Adam Smith, the hero of free market capitalists everywhere, as the source of his conviction that (as Smith wrote, and Jefferson closely echoed in his own words), "A power to dispose of estates for ever is manifestly absurd. The earth and the fulness of it belongs to every generation, and the preceding one can have no right to bind it up from posterity. Such extension of property is quite unnatural." Smith said: "There is no point more difficult to account for than the right we conceive men to have to dispose of their goods after death."

The states left no doubt that in taking this step they were giving expression to a basic and widely shared philosophical belief that equality of citizenship was impossible in a nation where inequality of wealth remained the rule. North Carolina's 1784 statute explained that by keeping large estates together for succeeding generations, the old system had served "only to raise the wealth and importance of particular families and individuals, giving them an unequal and undue influence in a republic" and promoting "contention and injustice." Abolishing aristocratic forms of inheritance would by contrast "tend to promote that equality of property which is of the spirit and principle of a genuine republic."

Others wanted to go much further; Thomas Paine, like Smith and Jefferson, made much of the idea that landed property itself was an affront to the natural right of each generation to the usufruct of the earth, and proposed a "ground rent"-- in fact an inheritance tax-- on property at the time it is conveyed at death, with the money so collected to be distributed to all citizens at age 21, "as a compensation in part, for the loss of his or her natural inheritance, by the introduction of the system of landed property."

Even stalwart members of the latter-day Republican Party, the representatives of business and inherited wealth, often emphatically embraced these tenets of economic equality in a democracy. I've mentioned Herbert Hoover's disdain for the "idle rich" and his strong support for breaking up large fortunes. Theodore Roosevelt, who was the first president to propose a steeply graduated tax on inheritances, was another: he declared that the transmission of large wealth to young men "does not do them any real service and is of great and genuine detriment to the community at large.''

Yesterday progressive Jim McDermott (D-WA), a senior member of the House Ways and Means Committee, introduced the “Sensible Estate Tax Act of 2011” to begin the process of restoring some kind of fairness to the estate tax. It's the first estate tax reform bill introduced by a member of the tax-writing committee that does not simply extend or repeal the existing estate tax law. It doesn't go nearly far enough but it does propose bringing the estate tax rates back to the pre-2001 levels, with a maximum marginal rate of 55% and a $1 million exemption ($2 million for married couples) instead of the current $5 million exemption at a maximum rate of 35%. The current law was designed to allow over 99% of estates to pass tax-free. 

McDermott: "The U.S. economy and the American people are struggling through one of the worst recessions in our history. Now is the time to ensure our tax policy is fair and equitable for all Americans, and the estate tax bill that I am introducing today embodies these values... This legislation will take us back to an estate tax that worked during one of America’s most prolonged periods of economic prosperity. It provides the kind of certainty that practitioners and taxpayers have been calling for since the Bush tax cuts took effect. Never in our history has an exemption increased over 500% in less than a decade and known loopholes been left open for abuse. The estate tax is broken, and it’s time we fix it.” Besides the fairer rate, McDermont's bill proposes the following:

·         Reunify and make permanent the portability for spouses of the gift and estate tax exclusions;

·         Restore the credit for state transfer taxes paid;

·         Close loopholes in the asset valuation and minority discount rules;

·         Provide for consistent basis reporting between estates and beneficiaries;

·         Require a minimum 10-year period for grantor retained annuity trusts; and,

·         Provide meaningful limits to the generation skipping transfer tax exemption.

Many prominent wealthy Americans have expressed their support of an estate tax. Among them is Bill Gates, Sr. who said, “An estate tax ensures that those who have benefited the most from this great country reinvest in the very promise of wealth and opportunity America provided them.” And many less wealthy Americans like the direction McDermott is headed. Ken Aden, the Blue America endorsed candidate for the seat currently occupied with reactionary corporate shill and 1%-er Steve Womack is not just running against inherited wealth, but inherited radio stations that are being used-- probably illegally-- to undermine democracy. The very idea that Womack feels the need to hide behind his father's radio station or use his limited non combat military career as a shield from questions of his corporate agenda is nothing less than spineless. "Who," asks Aden, "wants a congressman who runs from a debate? Not one individual who fought, bled or died next to me would have. When I decided to put my life on the line for my country my constitutional values were a constant in my thought process. I ask Steve Womack who the hell is he to wear the uniform strictly for political purposes. The best of us have given their lives wearing it. Who is he to exploit it? He is a corporate owned puppet and disgrace to his constituents... The idea that we are having this argument is constitutionally absurd. No king in history is guaranteed to father a worthy prince; no heir to an American fortune could be expected to do the same. We threw away the concept of divine right to power long ago. Your father's or mother's work has little to do with the talent you possess as an individual. My opponent has yet to grasp this concept. For all his talk about entitlements, he has yet to grasp the idea of personal responsibility."