Thursday, December 16, 2010

Symbolism and Pragmatism: "How We Got From Estate Tax To 'Death Tax'" from NPR's The Two-way

Don Gonyea speaks with Columbia Law School's Michael Graetz (update at 10 a.m. ET: he's also a professor emeritus and lecturer at Yale law School) about the history of the tax for Morning Edition. Graetz is co-author of the book Death by a Thousand Cuts: The Fight Over Taxing Inherited Wealth. [...] Graetz tells Don that the estate tax in its current form was passed by Congress in 1916, just three years after the start of the federal income tax. Roosevelt supported the tax as an instrument for enforcing the equality of opportunity in the U.S. by making it more difficult to pass great fortunes from one generation to another. Graetz says that the public accepted the tax as a another progressive-era reform. "It was the beginning of the progressive era," says Graetz. "The income tax had just come in, in 1913. So, the public was very interested in progressive taxation and the estate tax was a natural piece of that kind of system." Significant opposition first appeared in the 1920s when Andrew Mellon of Gulf Oil tried to repeal the estate tax during his stint as secretary of the Treasury during the Coolidge administration. Then, in the 1940s, Graetz says that opponents started labeling it the "death tax" in a bid to gain wider support for the repeal movement. The movement never succeeded. But the 1990s saw a resurgence in efforts to kill the tax, with an emphasis on how it affects family farms and small businesses. Graetz tells Gonyea, however, that the estate tax has rarely affected these types of small family operations and that opponents eventually fell back to the position of advocating a complete repeal. In the end, Graetz says the debate over the tax seems more symbolic than anything else in light of the fact that it has never produced more than 2 percent of federal revenues in any individual year since World War II.
Read the full Two-way post here. There was also this Morning Edition radio show on the topic. "Symbolic." Politics is all symbolism these days, and so much of the inflated U.S. economy is about political gestures, i.e. purely symbolic gestures, in an attempt to win a philosophical argument or debate: we buy organic to make a statement, more than anything else; we buy books; we use certain sorts of social media. This book cuts to this symbolism, and at that, there's a pairing here. There's a paring with the pragmatism of Obama, which is best understood through the book, Reading Obama.

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