The Right Coast
May 07, 2005
Now that the House Has Voted to Eliminate the Federal Estate Tax Permanently...
By Gail Heriot
I've always been slightly unnerved by what seems to be the near uniformity of opinion among my fellow conservatives in opposition to the federal estate tax. The passion with which they make their case never seems in any way proportional to the strength of their argument.
Think tanks denizens are frequently the worst offenders--and it's easy, though just a bit troubling, to see why. Those institutions depend on contributions from wealthy and usually elderly individuals for whom the estate tax is a significant issue. And if an issue, particularly a financial issue, is important to an institution's donors, it will be important to the institution--at least if the institution wants to grow and prosper.
I was pleased therefore to see Irwin Stelzer of the Hudson Institute writing in the Weekly Standard with a more skeptical view. Among other things, he attempts to meet some of the more common arguments against the tax:
"* Surviving spouses will suffer. No. Inheritance taxes are not levied on spousal transfers--quite right, since we now recognize that the accumulated wealth of husband and wife is due to the efforts of both.
I suppose it's getting to be a little late to be making arguments on this issue. Stelzer predicts that the Senate will follow the House lead and vote to make the elimination of the federal estate tax permanent. And like me, he is not sure if that's a bad thing. "But," he concludes, "the burden will be on the inheritance-tax repealers to decide which taxes they will raise to make up for the lost revenue--$1 trillion over 10 years. Unless, of course, they favor a still-larger deficit."