PROSPECT HARBOR — If I go to the corner market (which, on the Schoodic Peninsula, is about 2 miles away) and buy a $1 lottery ticket whose jackpot is $5.5 million and then win, I know that I will be required by law to pay taxes on the full $5.5 million. This is not money I actually earned. I just got lucky, so I will not complain about paying the taxes because I will have cleared about $4 million. Nor am I likely to feel cheated because the take-home amount is not double my winnings.

Congressional Republicans’ “tax reform” proposal creates a new sort of lottery. Call it the “accident of birth lottery.” It works this way.

Currently, children who inherit their parents’ estate are not required to pay a dime of federal taxes on the first $5.5 million they inherit. So-called “death taxes” kick in only for any inheritance above that amount. Children of affluent families who leave estates of $5.5 million have won the “accident of birth lottery.” Even in families with five children, each heir will walk off, tax-free, with $1 million. Will they feel cheated that the amount is not more? Will they regret having so many siblings? If their parents’ net worth is, say, $10 million, will they be angry at the federal government for taxing the remaining $4.5 million?

Both House and Senate Republican “tax reform” plans double the current nontaxable amount of an estate left by parents to their children from $5.5 million to $11 million. The House version would also abolish the estate tax in 2024. One-tenth of 1 percent of Mainers will reap the rewards if the tax is either rolled back, eliminated or both. The Republican Party’s contention that owners of small farms and businesses will benefit is a canard: Only 50 small farmers and business owners nationwide will benefit. In fact, the vast majority of the real beneficiaries are the already very rich.

Giving such tax benefits to the already very rich will only exacerbate income and wealth inequality in our nation. Jeff Bezos, Bill Gates and Warren Buffett among them have more wealth than the poorest 50 percent of the American population combined. The Brookings Institution has reported that between 1992 and 2013, the share of the nation’s wealth held by the top 1 percent of the richest climbed from 27 percent to 33 percent. Republican “tax reform” will only accelerate the rapidity of wealth accumulation by the nation’s richest people. Just how much of the fortune added to already-overstuffed coffers actually trickles down to the poor is moot.

Being born into a poor family in America is a curse; being born into a superwealthy family, a blessing. In either case, it is pure luck. “There but for the grace of God go I” can otherwise be read as “There but for the grace of good fortune go I.”

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Tax policy is, as so many have pointed out, actually about values. Should the rich pay their “fair share,” and what do we mean by “fair share”? Is it fair that South Carolina taxpayers get $7.87 from the federal government for every $1 they pay in federal taxes? Or that Mainers get $1.79 from the feds for every $1 that residents pay in taxes?

Residents of Delaware, who get considerably less from the federal government than they pay in taxes, are in fact transferring wealth to South Carolinians and Mainers. Redistribution of wealth in this nation, whether by government or by private philanthropy, is a means to make birthright count for less and opportunity count for more.

Various states’ dependency on redistribution of wealth by the federal government has long been a fact of the American political economy. Similarly, progressive income taxes require the wealthier to pay more of their income in absolute terms than do the poor, because, arguably, the wealthy have benefited more from the nation’s bounty. Is this form of the Robin Hood effect unfair? Or do we agree that those who have more should be required to assist those who have less, just as the federal government already does with the states? That is a values question.

So too is the Republican plan to transfer more wealth to the already rich by changing the estate tax laws. Yes, as someone once said, everyone in America enjoys liberty and justice – but only a few heirs of wealthy parents enjoy tax breaks on their unearned income.


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