The House of Representatives is scheduled to vote this week on repealing the federal estate tax, and while more Republicans favor this repeal than Democrats, I can’t be equally sure the rich favor it more than the poor. The reason is a conversation I had as a reporter in the mid-1990s with the late George McGovern, who lost the presidency so soundly in 1972.
I was interviewing McGovern about his book chronicling his daughter’s tragic death, not about taxes. But when I mentioned that I had cast my first presidential vote for him, we talked a while about national debates that never go away.
Although “income inequality” wasn’t a term then in use, the issue has always been with us. One way to lessen income inequality is the estate tax, designed to ensure that vast fortunes don’t stay wholly within certain families, thereby building up the wealth gap for generations to come.
McGovern specifically brought the estate tax up, not me. During his presidential campaign he had advocated raising the tax, he said, and one of his biggest surprises was the vigorous resistance he encountered among the poor and middle class, people who would likely never have to pay it.
Whether they had money or not, McGovern said, they thought someday they might. And if that day ever came, they wanted their heirs to hold onto every bit of it.
So is this selfishness, or self-interest? I’ve never forgotten, and still agree with an essay I read years ago in Commonweal arguing that hoarding family wealth over generations is morally indefensible. I wish I could remember the author. But pragmatism, if I’m honest, may also play a role.
We’re told that the federal estate tax, now applicable only to estates of at least $5.4 million, affects less than 1 percent of all Americans. My parents never remotely approached that figure, and I’m quite confident that I never will, either. I don’t play the lottery, and I’m a journalist.
But irrational optimism has always been a big part of the American character. It can be constructive, allowing us to triumph over seemingly impossible odds, or it can be destructive, allowing us to accept bad public policy in the fanciful hope that we’ll be the exception to the rule.
I wonder if the sentiments McGovern encountered among the poor and middle class more than forty years ago have changed. If so, it could mean we’re more open to sharing the wealth, or that recent history has made us more pragmatic.
President Obama, in any event, has pledged to veto an estate tax repeal, and with an override unlikely, this probably won’t turn into a major issue. But it’s almost certain that the issue, like rich and poor, will remain with us.