Apparently, in a burst of sanity, Trump is following his hero Reagan toward a repeal of the estate tax:
“If we can get into a debate about comprehensive tax reform, the odds are good that we can repeal the estate tax,” the South Dakota Republican said in an interview.
President-elect Donald Trump and the House GOP’s “Better Way” agenda both include repealing the estate tax as a cornerstone.
Currently, individuals can inherit estates worth up to $5.45 million without being taxed. Estates valued over that threshold are taxed at a rate of 40 percent, under a bipartisan compromise that was included in the 2013 fiscal cliff deal.
The Left is whining about how this will benefit investors and the cowardly rich who (in Leftist theory) forced “inequality” upon us, even though every human society since the dawn of time has been unequal because abilities and inclinations differ. Some prefer to have less, and more time, and others long for conquest and find it in business and the markets.
In reality, the estate tax was created to ensure that wealthier families could not retain their wealth, which is a means of displacing them from inter-generational power. This is stupid because it does not allow those of higher ability to act from a position of power, but to be thrust in the meat grinder along with everyone else, where they will most likely be ruled by their inferiors. It is a typical Leftist revenge narrative that sabotages society by prioritizing incompetence over competence.
Repealing the estate tax will most likely benefit small independent farmers and businessmen. The large agriculture lobby will hate it. Here is how the scam unfolds: Joe Farmer works hard and thinks hard, so makes his farm work well. His business operates by taking on a huge loan at the start of every season, then paying it back. Unfortunately, in mid-season Joe dies. His heirs realize their farm is valued at $6 million, and so they will owe $2 million in taxes, despite also having roughly that in loans. Just as they are bemoaning their fate, the lawyer from the big corporate farm up the street arrives, offering to pay them $5 million for the farm. They can pay off their loans, and the tax, and be free! But then they find out later that their $1 million “windfall” is also taxed, leaving them with no choice but to go get jobs in town. The same happens with small businesses, which tend not to incorporate because that takes control from the founder and passes it to a committee, who then begin the usual MBA-styled pressure to cost costs (cut corners) and trade on the good name of the firm by selling cheaper products at higher prices. This is the typical business entropy cycle.
The estate tax has been a disaster for America. It has transferred wealth from those who earned it to government, and in the process, taken power from those who worked half their lives on a family business only to have it removed by the dual pincer of taxes and debt. If you wonder why just about every product now is expensive and breaks after a year or two, this is why.