Sorry if this is a bit of a copycat thread -- from the 100% inheritance tax thread -- but I thought these quotes deserved wider attention.
I'm not arguing for 100% inheritance taxes, but for very steep ones after an exemption (see what FDR said, below).
Just a few decades ago, there was an almost completely consensus in liberal democracies and among liberal, progressive, and even many pro-capitalist, free market conservatives that there was little justification for allowing large estates to be inherited. The inheritance taxes were not even considered major revenue sources. They were considered part of social policy. There was simply little justification for people like Paris Hilton getting control of a major corporation and a free ride in life beyond a generous grub stake, simply because she was wise and good enough to be born into the right family.
It's tragic that the ideology of Reaganism has so infiltrated our thinking that if the other thread is to believed, most DUers are far more conservative than Herbert Hoover was when it comes to taxing inheritance.
Here are some positions, comments and quotes by three presidents -- two of them Republicans:
Teddy Roosevelt:
TR wanted confiscatory inheritance taxes on inheritance and said that federal
taxes should "put a constantly increasing burden on the inheritance of those swollen fortunes, which it is certainly of no benefit to the country to perpetuate." Roosevelt also said that the inheritance taxes should be
directed at "malefactors of great wealth, the wealthy criminal class."
Herbert Hoover
He believed that regardless of how much or little revenue it raised, the estate tax was a moral imperative
"one of the most economically and socially desirable—or even necessary of all taxes" to curtail the "evils of inherited economic power."Hoover also said, “
The American people have from the earliest moments been alive to the evils of inherited economic power. Several million dollars is economic power and too often
it falls into the hands of persons of little intention to use that power for public benefit either in expansion of enterprise and employment or for public services. It is the
breeding ground of playboys and playgirls of morally obnoxious and degenerating character.”
Franklin Delano Roosevelt
FDR explained at great length his beliefs about the importance of the inheritance tax in his 1935 message to Congress asking for steep estate taxes, and one of his important assumptions is that people of great wealth do not make it "on their own," but by the labor of many others.
http://www.treas.gov/education/faq/taxes/historyrooseveltmessage.shtml<quote>
The movement toward progressive taxation of wealth and of income has accompanied the growing diversification and interrelation of effort which marks our industrial society.
Wealth in the modern world does not come merely from individual effort; it results from a combination of individual effort and of the manifold uses to which the community puts that effort. The individual does not create the product of his industry with his own hands; he utilizes the many processes and forces of mass production to meet the demands of a national and international market.
Therefore, in spite of the great importance in our national life of the efforts and ingenuity of unusual individuals,
the people in the mass have inevitably helped to make large fortunes possible. Without mass cooperation great accumulations of wealth would 'be 'impossible save by unhealthy speculation. As Andrew Carnegie put it, "Where wealth accrues honorably, the people are · always silent partners." Whether it be wealth achieved through the cooperation of the entire community or riches gained by speculation—in either case the ownership of such wealth or riches represents a great public interest and a great ability to pay.
My first proposal, in line with this broad policy, has to do with inheritances and gifts.
The transmission from generation to generation of vast fortunes by will, inheritance, or gift is not consistent with the ideals and sentiments of the American people.
The desire to provide security for oneself and one's family is natural and wholesome, but it is adequately served by a reasonable inheritance. Great accumulations of wealth cannot be justified on the basis of personal and family security. In the last analysis such accumulations amount to the perpetuation of great and
undesirable concentration of control in a relatively few individuals over the employment and welfare of many, many others.
Such inherited economic power is as inconsistent with the ideals of this generation as inherited political power was inconsistent with the ideals of the generation which established our Government.
Creative enterprise is not stimulated by vast inheritances. They bless neither those who bequeath nor those who receive. As long ago as 1907, in a message to Congress, President Theodore Roosevelt urged this wise social policy:
"A heavy progressive tax upon a very large fortune is in no way such a tax upon thrift or industry as a like tax would be on a small fortune.
No advantage comes either to the country as a whole or to the individuals inheriting the money by permitting the transmission in their entirety of the enormous fortunes which would be affected by such a tax; and as an incident to its function of revenue raising, such a tax would help to preserve a measurable equality of opportunity for the people of the generations growing to manhood."
<HamdenRice comment: Here FDR quotes TR. TR's comment was very, very typical for his time in the sense that he thought that inheritance was not only terrible for society, but terrible for the people inheriting. This was also common thinking at the Harvard Law School, whose faculty, especially John Chipman Gray, launched serious scholarly attack on inheritance in the late 1800s -- despite the fact that Harvard was entirely a handmaiden institution of the emerging capitalist elite.>
A tax upon inherited economic power is a tax upon static wealth, not upon that dynamic wealth which makes for the healthy diffusion of economic good.
Those who argue for the benefits secured to society by great fortunes invested in great businesses should note that
such a tax does not affect the essential benefits that remain after the death of the creator of such a business. The mechanism of production that he created remains. The benefits of corporate organization remain. The advantages of pooling many investments in one enterprise remain. Governmental privileges such as patents remain. All that are gone are the initiative, energy and genius of the creator—and death has taken these away.I recommend, therefore, that in addition to the present estate taxes, there should be levied an inheritance, succession, and legacy tax in respect to all very large amounts received by any one legatee or beneficiary; and to prevent, so far as possible, evasions of this tax, I recommend further the imposition of gift taxes suited to this end.
Because of the basis on which this proposed tax is to be levied and also because of the
very sound public policy of encouraging a wider distribution of wealth, I strongly urge that the proceeds of this tax should be specifically segregated and applied, as they accrue, to the reduction of the national debt. By so doing, we shall progressively lighten the tax burden of the average taxpayer, and, incidentally, assist in our approach to a balanced budget.
The disturbing effects upon our national life that come from great inheritances of wealth and power can in the future be reduced, not only through the method I have just described, but through a definite increase in the taxes now levied upon very great individual net incomes.
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