As Congress stands poised to gut the state tax at the behest of a Democratic president, let’s try a short quiz: We all know the estate tax is a vital instrument of redistributive taxation. But what, exactly, is it supposed to be redistributing?
If you said wealth, you’re right. For almost a hundred years, the estate tax has been striving to limit the concentration of wealth, power, and privilege. Which is quite a job for any tax, if you ask me.
But the estate tax also has a second, more prosaic role: it redistributes the tax burden. By focusing on the lucky souls at the top of the economic ladder, it makes the tax system fairer and more progressive — another vital achievement.
This distinction is more than semantic. It’s profoundly political. Over the past century, arguments about shifting the tax burden have done better among voters than calls to remake society along more egalitarian lines. As defenders of this beleaguered levy get ready for a last stand in the House of Representatives, they should take a page from history and make the case for fairness.
Joseph J. Thorndike: What’s the Estate Tax Supposed to Do, Anyway?