Stirring
Class Envy
Democrats
are demagoguing a proposed repeal of the Virginia
estate tax. It's a losing strategy: Virginians don't
have a problem with people passing along their
wealth.
The
Democrats in the Virginia House of Delegates have
made a cynical decision to ape their Democratic
counterparts in the U.S. House of Representatives by
labeling Republicans as protectors of the wealthy.
Although 10 of the 17 Democrats in the Virginia
Senate had earlier voted to repeal the state
inheritance tax, House Democrats saw this
legislation as an opportunity to demagogue the issue
and voted in a bloc against repeal.
In the House
campaigns this year, the voters can expect to hear ad
nauseam that Republicans enacted a big tax break
for millionaires. It won’t take much effort on the
part of GOP incumbents to deflect this campaign
attack.
Virginia is one of
only a handful of states that impose a tax on
inheritance. Avoiding the Virginia tax is relatively
simple. A wealthy person can simply choose to be a
resident of another state where no inheritance tax
would be imposed. Wealthy folks have little trouble
maintaining second and third homes.
The problem for
Virginia Democrats is even greater than the trouble
national Democrats have had trying to make political
hay out of what amounts to an appeal to class envy.
There is even less for the Democrats to work with on
the inheritance tax repeal than on tax cuts enacted
by Congress. The present inheritance tax targets a
few wealthy Virginians for taxation, while totally
exempting all others. Federal tax cuts enacted at
the urging of President George W. Bush, on the other
hand, have generally reduced taxes at differing
rates for taxpayers depending on the rate at which
they have been taxed in the past. The argument in
favor of these differences is that federal income
taxes in particular are graduated and should be
reduced roughly in accordance with that scale.
As Senator Joseph
Lieberman, D-Conn., has observed, the Gore-Lieberman
campaign in 2000 failed to get any traction using
the soak-the-rich appeal. The simple truth is that
most Americans support a system that allows
individuals to become wealthy. If they ever did show
any inclination to move toward wealth
redistribution, they long ago abandoned that
flirtation.
Virginians
traditionally have been even less interested in
income and wealth redistribution schemes than the
rest of their countrymen. This tactic might work in
other countries, but American voters have repeatedly
demonstrated that their ever-optimistic view
frustrates politicians who appeal to class envy.
Most Americans who aren’t already wealthy hope
that they or their offspring will be someday.
What Americans may
not understand in detail about how wealth is
generated in our economic system, they surely sense
in some general way. The wealthy aren’t the enemy
of the rest of the population. Those who take risks
and develop a better mousetrap actually create
wealth, not only for themselves but for the economy
as a whole. We all benefit.
Democrats who try
to portray our system as a zero sum game in which a
few get rich at the expense of the rest have
generally failed to convince the voters. Since
the experiment at Jamestown in the 17th century,
Virginians have recognized the self-defeating nature
of socialism and its kindred ideologies.
Let House Democrats
stake their claim to recapture of that body on an
appeal to class envy. Let them claim that
Republicans have given a tax break to millionaires
while a majority of Senate Democrats also voted for
that break. We’ll see if Virginians have
fundamentally changed.
-- February 24, 2003
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