Recently, Senator Chuck Grassley, an Iowa Republican, summed up the GOP’s stance on why they should kill the estate tax:
“I think not having the estate tax recognizes the people that are investing, as opposed to those that are just spending every darn penny they have, whether it’s on booze or women or movies.”
But this raises some questions in my mind. Which is actually better — “investing”, or “booze and women”?
Grassley’s remarks fall on a moralistic concept of what’s good and bad. Obviously (in his opinion) “investing” is virtuous; booze and, I guess, women, are bad (Grassley’s misogyny is a topic for another blog post, but you might have caught his assumption that heterosexual females aren’t making meaningful economic decisions). And, apparently, the government should “recognize” the people who are supposedly virtuous. But I don’t really give a shit about whether what an individual does with their money is moral or not. I recognize the irony in the following statement, but I, a literal communist, and unlike the “small-government conservative” Grassley, don’t believe that the government should be using its tax policy as a means push a subjective moral agenda, but rather should be basing it on what’s good for the actual economy.
But what is “the economy” anyway? I looked it up in the Business Dictionary:
An entire network of producers, distributors, and consumers of goods and services in a local, regional, or national community.
So, that’s what the economy is — but what’s better for it? The estate tax as it is exempts the first $5.5 million in assets, so we are talking about people who have supposedly invested more than that amount. That’s a lot of money. What do we mean when we say “investing”? This isn’t the old days where you buy stock in a shipping company so that they can raise funds to buy a schooner and sail crates of cargo across the ocean to the New World. So what are these people doing with $5.5 million? Buying up real estate? Speculating? Putting it into some bizarro Wall Street instrument that takes money and magically turns it into more money?
None of this has anything to do with the production, distribution, and consumption of goods and services. It’s just hoarding assets and doing some tricks to make the value of them appear larger than they were when you purchased them. The modern concept of “investing” is many steps removed from anybody doing any actual labor that results in a product or service. And, remember, we are talking about the estate tax which specifically applies to people who have amassed over $5.5 million in assets and just hung onto it until they died. For the most part, these people had no plans to return that money to the actual economy. Why is that supposedly virtuous?
Now consider, on the flip side, the person who spends “every darn penny”. I’m not advocating living completely paycheck to paycheck. I think everyone should have an emergency savings account, and have the ability to save up for long-term goals. But in both of those cases, the idea is that they will actually be spent, eventually. You’re going to buy that badass hot tub, or tap into your emergency account when your job moves to Honduras and you get laid off; I’m talking about saving money for an actual purpose. I’m not talking about amassing wealth like you’re trying to get the high score in a video game. I’m not talking about saving up several million dollars and just hoarding it until you die.
But that’s just me telling you not to be an idiot (and the current U.S. government has no problem promoting idiocy) with your money. It really has little to do with the economy. So if you really want to live hand to mouth, do you — it’s not my place, or the government’s place, to tell you not to. Because you know what’s great for the economy? Buying booze. The dollars you spend on booze filter through the people who work at the liquor store, drive the beer truck, work at the brewery, and so on. You know what else is great for the economy? Spending money on “women”. I don’t know if that means going out on a nice date, keeping a restaurant in business and putting tips in the wait staff’s pockets. Maybe it means that you solicit a prostitute or put some cash in a stripper’s thong, and she goes and pays her rent and feeds her kids. These are good things. You’re creating jobs. You’re putting money into goods, distribution, and services. You’re keeping the actual economy moving instead of just locking your money up in “investments”.
This is a very Mickey Mouse level Marxist-Leninist analysis, but it doesn’t take a genius-caliber understanding of this shit to make the point. Government policy that favors “investors” over working-class consumers who actually produce and consume goods and services, and policies which accelerate the accumulation of resources on the “investor” end at the expense of working-class consumers, are bad for the economy. This is why capitalism is inherently unstable and unsustainable in the long-term. But people like Grassley fail to grasp this, because they’re so entranced by their Ayn Rand wet dreams to recognize plain fucking facts when they’re slapped in the face with them. They have to fall back on their moral-high-horse analysis where the government “recognizes” our supposed betters, because if we based our tax policy on what’s actually effective in the real world, that would pull the plug on their hoity toity Malthusian delusions and that would be a total bummer, man.
Hammer & Icicle 