Richard Wolff, UMass Amherst economics professor emeritus, writes in a column for The Real News Network, that the tax bill just passed by Congress will further widen the gap between the rich and the poor in the United States. He discusses changes the estate tax, noting that the first $10 million left to heirs will not be assessed an estate tax and anything over $10 million will be assessed at 35 percent- 10 percent less than the under the current law, passed in 2009.
Estate taxes have been justified and used in countless countries for centuries. Indeed, many of the 50 states in the US continue to impose estate taxes (and/or the slightly different “inheritance taxes”) using the same justification. Basically, the idea is that even the most minimal commitments to democracy and equality of opportunity require that all citizens begin with roughly equal resources and supports. Hard work, talent, and commitment should determine each individual’s successes rather than the wealth that one’s parents did or did not leave behind. So estate taxes were seen as ways to both support the government’s activities and help produce a more level playing field for each generation.
What Obama’s tax bill does is directly contradict all this. It reduces the support for state activities from estate taxes while enhancing the inequality of starting points among our citizens. At a time when the economic crisis and the government’s responses to it already discriminated for the rich and against everyone else, this new tax bill takes that social injustice some steps further.