Republicans have long raged against what they call the “death tax” and while they have not eliminated it, they have changed it. In 2017 the estate tax applied only to individuals with total assets exceeding $5.49 million (doubled for a married couple). After the Republican tax bill passed, the number was increases to $11.8 million (doubled for a married couple). As should be guessed, this change impacts the taxes of very few people, but it provides a significant benefit for those who are already very well off.
The main reason advanced by Trump for this change was his claim that it is unfair that people pay taxes twice: once when they earn the money, again when their assets are inherited. This ignores the fact that those inheriting assets did not pay taxes on it when it was acquired, so it would only be a double tax if the tax was imposed on the dead person(s) who was taxed when they earned the assets. That said, the no double-tax principle is intriguing and could be taken as entailing that most taxes should be eliminated; but this is a matter beyond the scope of this essay. Instead, I will be looking at inheritance.
While inheritance is taken to be an ancient tradition and a basic right, there are rational arguments against allowing it at all. Also, as with any tradition and common practice, it would be an error of logic to infer that its traditional nature and common practice justify it in anyway. After all, people commonly do bad or stupid things for a long time.
One standard way to argue against inherited wealth is to contend that it has negative consequences. Mary Wollstonecraft contends that hereditary wealth was morally wrong because it produces idleness and impedes people from developing their virtues. While complicated to sort out, this does present an empirical claim: one could do a statistical analysis of the impact of hereditary wealth on idleness and virtue (although one must define the virtues for this analysis).
Interestingly, while Republicans and conservatives tend to aggressively oppose estate and inheritance taxes, they advance an argument that would seem to support eliminating inheritance.
One stock Republican argument against welfare echoes Wollstonecraft’s argument against hereditary wealth: it makes people idle and prevents them from developing virtues, therefore it should be restricted (or eliminated). Rod Blum, a Republican representative from Iowa, said “Sometimes we need to force people to go to work. There will be no excuses for anyone who can work to sit at home and not work.” Donald Trump, whose fortune was built on inheritance, has said that “The person who is not working at all and has no intention of working at all is making more money and doing better than the person that’s working his and her ass off.” While this might sound like description of Trump, it is apparently his criticism of welfare.
If the Republican criticism of welfare is correct, then it would also seem to apply to inheritance. After all, people do not earn their inheritance—they simply receive it. As such, if the Republicans are sincere in their arguments against welfare, then they must apply the same reasoning to inheritance and oppose it for the same reasons they oppose welfare. Obviously enough, they do not take this position—they advance one set of arguments against welfare, give another set in favor of protecting inheritance and see to it that the two do not meet.
While it is tempting to simply present this yet another example of inconsistency, it could be argued that there are relevant differences between inheritance and welfare that breaks the analogy between them.
One argument can be built on the fact that inheritance is passed on voluntarily from the possessor of the wealth to the recipient, while welfare involves taking tax money from some people who do not want some other people to get that money. A similar argument can be made by pointing out that inheritance usually goes to relatives while state welfare does not. While these are differences, they would not seem to be relevant to the argument that welfare is bad because it makes people lazy—after all, it is getting money that one has not earned that is the problem, not whether it was giving willingly or not or who it comes from. Unless one wants to make the implausible argument that money given by relatives is special and will not make people lazy.
Another argument can be made arguing that inherited wealth is earned in some manner while welfare is not. While this does have some appeal, it falls apart quickly. First, some people do earn some of their welfare (broadly construed) by paying for it when they are working. For example, if Sally works for ten years paying taxes and gets fired when her company moves overseas, then she is getting back money from a system that she contributed to. Second, if a person did work for their inheritance, it is not actually an inheritance, but something earned. If, for example, someone worked in the family business for pay, then they have earned their pay. But merely working there does not, obviously, entitle a person to own the business after the death of the current owner. So, this sort of argument fails.
In light of these considerations, if the Republicans are right that welfare is bad because it makes people idle and impedes their virtue, then the same would apply even more to inheritance. As such, if they are opposed to the harms of welfare and must combat them, then they must also oppose the harms of inheritance with an equal or greater intensity. If they don’t, one might think that they simply dislike poor people and like the rich.
It might be pointed out that if someone opposes inheritance, then they must oppose welfare. One reply is to accept this—if welfare does make people idle and inflicts moral harm. A second reply is to argue that welfare helps people in need and is analogous to family helping family in times of trouble rather than being analogous to inheritance, in which one simply receives regardless of need or merit.
Lest anyone start mass-producing straw men, my concern here is with large inheritances; I obviously have no objection to the sort of inheritance most of us will receive and I certainly have no issue with, for example, someone inheriting some of grandad’s Hummel collection or a few weapons from grandma’s collection of assault rifles.