Why we have an inheritance tax
by Tom Sullivan
Inheritance taxes date back to ancient Egypt, according to several sources. The earliest of several short-lived inheritance taxes in the United States date back to its founding, the last of those being rescinded in 1902. The Internal Revenue Service explains what happened next:
The years immediately following the repeal of the inheritance tax were witness to an unprecedented number of mergers in the manufacturing sector of the economy, fueled by the development of a new form of corporate ownership, the holding company. This resulted in the concentration of wealth in a relatively small number of powerful companies and in the hands of the businessmen who headed them. Along with such wealth came great political power, fueling fears over the rise of an American plutocracy and sparking the growth of the progressive movement. Progressives, including President Theodore Roosevelt, advocated both an inheritance tax and a graduated income tax as tools to address inequalities in wealth. This thinking eventually led to the passage of the 16th Amendment to the Constitution and the enactment of the Federal income tax. It was not until the advent of another war, World War I, that Congress would enact the Federal estate tax.Winston Churchill observed that death duties are “a certain corrective against the development of a race of idle rich.”
“So he was basically using a $2,500 desktop as a monitor?” I asked. The IT guy shrugged.It was a vanity object for Kushner, and a metaphor for his view of the Observer. Speirs explains that even after the paper had its first profitable quarter, Kushner wanted to lay off staff to further goose the returns. He would not put money into the paper to build for the future, saying, “Why should I put more money into the Observer when I could invest in a software company?”
Kushner’s claim to business knowledge, beyond admiring Silicon Valley, boils down to his work for his family’s commercial real estate company, which is hardly comparable to a government institution. And if industry dynamics are not transitive across the board, expertise isn’t, either.Speirs concludes, "You could construe my evaluation as a reasonable observation by an outsider with a set of 'fresh eyes,' but you’d be nuts to hand me a billion-dollar commercial real estate company because of it." Or appoint someone to remake American government who doesn't know how it works.
On that count, I don’t even know how to quantify Kushner’s expertise, anyway. Yes, he ran the company — which he inherited, not uncommon in New York’s dynastic, insular real estate world. But he was sure he had the goods. When I worked for him, I didn’t think he had a realistic view of his own capabilities since, like his father-in-law, he seemed to view his wealth and its concomitant accoutrements as rewards for his personal success in business, and not something he would have had in any case. To me, he appeared to view his position and net worth as the products of an essentially meritocratic process.