Super Rich Americans Favor the Estate Tax

As Congress debates whether to extend the current estate tax exemption or replace it with a relatively-low exemption threshold that is coupled with tax rates on amounts that exceed the threshold, super-rich Americans are coming out of the woodwork to demand that the estate tax be re-instituted.

"Some high-profile, high net-worth folks on Wednesday called on Congress to impose a "strong" estate tax going forward.

"Our country is on an unsustainable fiscal path. [Revenue from an estate tax can] fund deficit reduction, additional public investment, or added assistance to those affected by the economic crisis," said Robert Rubin, who served as Treasury secretary during the Clinton administration and more recently as chairman of Citigroup.

Moreover, Rubin added, "our nation has always held itself out as a meritocracy and a land of opportunity, and an estate tax helps avoid accumulation of inherited economic and political power that is antithetical to this historical vision of our society."

Rubin was joined by former hedge fund manager Julian Robertson, Walt Disney's grand-niece Abigail Disney and AFL-CIO president Richard Trumka on a call organized by liberal group United for a Fair Economy."

These super-rich people would have us believe they are acting in a totally selfless manner, in that they are willing to reinstitute an estate tax that surely will hit them harder than other Americans.

But is that the proper lense with which to view their actions? I say it's not.

Perhaps these people can disclose how much estate tax they anticipate paying at the rates they are espousing?

My conclusion is that they don't anticipate paying much estate tax at all, since they will form (or have already formed) trusts to leave property to heirs or will leave much of what they have to their own private foundations, which they hope will continue their legacy long after they are in the grave. Either one of these actions will leave crumbs for the tax man.

In the meantime, the saps that don't have the means or the will (non pun intended) to take these actions will be left holding the estate tax "bag".

There is simply no moral reason to have an estate tax. People should be free to give money to whomever they choose, without the taxman stepping in to get his cut.