“Been There, Done That” or “Reflections on the Estate Tax”
I read somewhere that certain magazines publish the same article about once every eighteen months. The text is never identical and there might be a new twist, but it’s pretty much the same old fare. (Think Modern Bride with the headline Pale Ivory This Year’s Color for Summer Brides.) And you really can’t even fault the magazines. Really, what is there to say about a wedding that hasn’t been said already?
This is how I’ve come to feel about the estate tax over the course of the last couple of weeks. The tax is back in the news because President Obama’s proposed budget announced that he would retain the tax with its current rate and exemption levels, rather than allowing the tax to expire in 2010. The House voted to retain the 2009 version of the tax, but the Senate has voted to lower the top rate from 45 to 35 percent and to increase the exemption from $3.5 million to $5 million (and thus from $7 million per couple to $10 million per couple).
I guess you can stay tuned, but don’t expect to hear much that you haven’t heard before. The New York Times is writing about “enrich[ing] the heirs of America’s biggest fortunes.” The Wall Street Journal is writing about “lower[ing] the incentive to reinvest in family businesses.” I could elaborate, but I don’t see the point. Anybody who was paying attention back when George W. Bush introduced his first budget has heard it all before. The recession allows each side to invoke particular economic urgency and that (at least by Modern Bride standards) is enough for a new headline. But nothing is really new.
The whole thing has me thinking about perennial public policy debates and what makes them interesting to follow over the long haul. For me, it’s rarely the reasoned arguments on either side of the questions. These often remain fairly constant, even when a new study provides fresh ammunition for one side or the other. Rather, it’s the extent to which the outcome in each round of the debate reflects changing public attitudes and societal norms. This, for example, is what I find most interesting in Vermont’s evolution from civil unions to legislatively-created same-sex marriage.
Which brings me back to the estate tax, where there might be a small glimmer of hope. Over at WSJ Blogs, Robert Frank posited that anger over the estate tax has withered on the vine because Americans’ perceptions of wealth have fundamentally changed. Not so long ago, many of us were optimistic that someday we would be wealthy enough to pay the tax. Today . . . well, suffice to say that optimism doesn’t carry the day. To compound matters, many Americans are harboring quite a bit of resentment towards those who earned headlining-grabbing salaries and bonuses. Tax the wealthy? Please!
Now, this is the sort of postulating that makes even a jaded estates and trusts prof take a fresh look at the tax . . .