Mansfield Fox

Law student. Yankees fan. Massive fraggle. Just living the American dream.

Saturday, April 16, 2005

Death, Taxes and Death-Taxes

Super-genius Will Baude (which I recently discovered is pronounced "bow'd" rather than "baw'd", as I'd believed for the past 10 months) suggests eliminating the step-up in basis for property at death as a viable alternative to bringing back the estate tax.

I think that's a sound policy idea, but: public opposition to the estate tax and support for the step-up in basis (well, the public would support it if they knew about it) aren't grounded in the desire for a pure Haig-Simons income tax, or any interest in sound policy at all. They're all about that basic human emotion, the fear of death. The death of a close relative is, to put it mildly, an unpleasant experience, and I think it's seen as undue cruelty to pile on taxes, or at least a future increase in tax liability, at that moment as well. That the whole thing functions as a massive subsidy for inherited wealth is, I think, secondary.