Inherit the Windfall: The Estate Tax Debate
ROBERT SIEGEL, host:
The Senate is once again taking up what the Internal Revenue Service calls the Estate Tax and what its Republican opponents call the death tax. There's a proposal to eliminate it altogether. There's another proposal to eliminate federal taxes on estates of $5 million or less and reduce the rates on bigger estates.
At stake in this debate are, on the one hand, hundreds of billions of dollars in federal revenues, but on the other, a question of American values, what we think about inherited wealth. Is death ideally a time of leveling or is leaving one's progeny well set the whole point of accumulating wealth?
Nelson W. Aldrich, Jr. has written about inherited wealth quite a bit and Mr. Aldrich, I wonder what you think Americans typically believe about inheriting gobs of money. A sign of poor character, or good fortune?
Mr. NELSON W. ALDRICH, JR. (Author, Old Money: The Mythology of Wealth in America): Well, it's a sign of good fortune that is predicted to create bad character. Because inherited wealth flies in the face of the dominant American myth, which is the myth of the self-made man, and its corollary myths, which deal with the necessity of standing on your own two feet. It has to be said that when most people, I think, talk about the rich or the wealthy, in American lingo they generally mean the self-made. They do not mean the hereditary wealthy or the hereditary rich.
SIEGEL: What do you think the American public would make of the proposal that, one way or the other, upon death we can leave our heirs, you know, the equivalent of a down payment on a house or a year of tuition for their children in college, but that's about it. Otherwise, you know, it's ashes to ashes and dust to dust, apart from that. Do we buy it, or do you think we believe that people should be able to indeed pass on what they've acquired?
Mr. ALDRICH: Well, you may remember the McGovern campaign. In Detroit, I believe, McGovern got up and gave a speech to the UAW in which he proposed that inheritances be limited to $5 million, which is one of the proposals right now before the Congress.
SIEGEL: We should say that in 1972 $5 million was, as they say, a lot of money.
Mr. ALDRICH: Yeah. That was serious money. And he was hooted and booed by the automobile workers. I think there's a sad lack of imagination in the American voter in that, when somebody says to them, that's your money, you made it, you get to keep it, they want to say yes.
SIEGEL: But when the hall of auto workers, you're saying, in 1972 booed George McGovern for suggesting taxing to the point of elimination estates over $5 million, people are in effect saying, by their booing, that could be my kid who makes $20 million you're talking about. My kids could yet be very successful and very lucky.
Mr. ALDRICH: Exactly. That's the pyre of promise that we live in. That anything is possible. Anything good is possible. I'm sure that's what they were thinking.
SIEGEL: Do you think there's some point in life when people realize, as promising as things appeared when I was 25, I am not going to leave $5 million to my children at the rate things are going now that I'm 65?
Mr. ALDRICH: I don't know. I think that kind of wisdom is just a will of the wisp against the thought of the almighty dollar. I mean, Andrew Carnegie back in the 1890s said, I would as soon leave a curse to my child as leave him the almighty dollar.
SIEGEL: That's not a 21st century sentiment that we've heard recently.
Mr. ALDRICH: No. I don't think you'll be hearing that quoted in the Congress.
SIEGEL: Thank you very much for talking with us, Mr. Aldrich.
Mr. ALDRICH: Well, thank you so much.
SIEGEL: That's Nelson Wilmarth Aldrich, Jr. He's written about inherited wealth in his book Old Money: The Mythology of America's Upper Class. That, by the way, is a class with which he is very familiar. He is descended from the Rhode Island senator of the same name. He was his grandfather. And that senator's daughter, Abby, married John D. Rockefeller, Jr.
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