I published this letter in today’s New York Times:
To the Editor:
Paul Krugman admires the fiscal principles of those "Americans from an earlier era" who instituted the modern estate tax.
my admiration is less, I’m willing to keep the estate tax if we return
to the original personal-income tax policies of those "progressive"
leaders in 1913: a tax-rate structure whose lowest rate was 1 percent
and whose maximum rate of 7 percent kicked in only when annual incomes
reached $7.7 million (in 2006 dollars).
Donald J. Boudreaux
Fairfax, Va., June 9, 2006
The writer is chairman of the economics department at George Mason University.
Here’s one of the e-mails that I received in response:
Professor, I read your letter in the NY Times today. You confuse "policy" with "program". The policy in 1913 was to tax the rich more than the poor (i.e., progressive taxation). The program to implement that policy in 1913 was to charge rates between 1-7% because that was sufficient to run the Federal government then.
Times have changed. All most fair people are saying today is: keep the policy of progressive taxation. The Estate Tax, with all of the loopholes through trusts, etc., open to the rich, is a step in the direction of the same policy enunciated in 1913.
I am probably in the top 10% of earners. I am perfectly happy to pay more than people of modest means. It is the obligation of a responsible society.
I hope George Mason students are not learning the virtues of selfishness.
What interests me about this e-mail is its final sentence — the one about selfishness. Regardless of your view of the necessity of taxation, of the history of Uncle Sam’s current income tax, or your views on the merits and demerits of a progressive structure of tax rates, why is it wrong to argue for lower tax rates? Why does my correspondent assume that those of us who argue for lower taxes are greedy and irresponsible? Why can’t such people at least assume us to be mistaken in our economics rather than evil in our motives?
I believe, perhaps mistakenly, that the less government does, the better off nearly everyone in society will be. So I call for both lower tax rates and less tax revenues.
Does this stance make me "selfish"? (Or, does it make me "greedy"? "Greed," rather than "selfishness," is probably the word my correspondent meant, unless he was alluding to a book by Ayn Rand.) Surely even Gandhi, Mother Teresa, Pope John Paul II, and the Rev. Martin Luther King, Jr., had they each been cursed with the same intellectual misunderstanding that I suffer, would have also argued for lower tax rates and revenues.
It’s a cheap means of generating for yourself a rush of self-satisfaction and sense of moral superiority to assume that those who disagree with your policy positions are morally twisted, bad, and unenlightened compared to yourself.
I assume — I truly do — that my correspondent is a decent human being. I would not say to him "I hope your children and friends and co-workers are not learning from you the virtues of greed" — I would not say this despite his obvious preference for a government larger than one that I believe is optimal — a government that, I believe, greedily takes from the unorganized and gives to the rapaciously greedy organized — a government that officiously assumes that it knows better how individuals should conduct their lives than these individuals know.
No, although such a government is, in my view, both a paragon of greed and a monument to it and its travesties, I give my correspondent the benefit of assuming him to be a person of honor — an honorable, well-meaning person whose intellectual understanding of the state and society, alas, is muddled.