Wednesday, December 12, 2007

The Attack on Good Luck

Tibor R. Machan

Over the last few years a controversy has been brewing about the death tax. While a great many people whom it doesn’t effect support it, some who would pay huge sums in this unjust policy do as well. Bill Gates and Warren Buffet both are on record in favor of hefty taxes on estates that could otherwise benefit family members, offspring of the wealthy.

Now Hillary Clinton has jumped on the bandwagon and this really should be no surprise. Although her line of defense is kind of weird--“The estate tax has been historically part of our very fundamental belief that we should have a meritocracy, that we do not want a system--where we expect people to make it on their own--to be, over time, dominated by inherited wealth.” She continued, speaking in the characteristic fashion of royalty (that uses “we” without actually consulting anyone included), saying that “What we do believe that people should have to get out there and make their way, to a great extent.”

Two points need to be made in response to this. One is that those who earned the wealth may not be coerced into using it in ways they do not choose. Wealthy people like Gates and Buffet have every right to give away all they have earned, so their freedom and property rights are not at all violated by abolishing the death tax. If they don’t want to have their kids get their wealth, they can do with it was they choose. But those who would like their wealth to go to their offspring and others in their surviving families ought not to be prevented from doing so. They, too, have the right to private property, the greatest principle in defense of freedom of choice, a bulwark against statism and populism which amount to nothing less than confiscation.

Another point worth raising is that we are all subject to the vagaries of good and bad luck. Some of us are born with talents and these talents may well give us a leg up when it comes to competing with others in the market place. Tall people have advantages that short ones lack. Healthy people are clearly luckier than those with inherited medical problems. There simply is no end to the inequalities of fortune and misfortune in human life. Those who wish to even things out voluntarily are, of course, quite free to make that effort. No one, however, has the moral and should have the legal authority to forcibly fiddle with the advantages and disadvantages people have in their lives. In a society of free men and women this issue must be left to the free choices of the people involved. And, in fact, America, which still tends to be more in line with the idea of economic laissez-faire--though only barely by now--has more economic equality than do other countries because when governments are entrusted with equalization, look out! Bias and cronyism are sure to dominate, which is far worse than some “unfair” economic advantages or disadvantages due to inheritance and other sources not directly related to merit.

It is, furthermore, very odd to see Hillary Clinton suddenly champion meritocracy when, in fact, the history of her own type of democratic politics--populism--has been precisely to reject it and embrace government wealth redistribution based on what politicians and bureaucrats deem to be fair.

Bill Gates and Warren Buffet need not worry--no one would prevent them from allocating their wealth as they choose should the inheritance tax disappear. What would stop is the government taxing the wealth and using it in line with the vision of its ideological leaders instead of the choices of those who would otherwise have the authority to use it as they see fit because wealthy parents decided to leave it to them to make the decision.

Sadly, the death tax and similar schemes of extortion that enable politicians and bureaucrats to allocate funds they certainly haven’t earned--talk about meritocracy--appeals to the envy of many people who simply refuse to live with how nature and human decisions distribute wealth in the country. This envy then is used by the likes of Hillary Clinton to grab power for themselves, economic power they certain didn’t earn. Moreover, this is also a source of the expansion of economic statism whereby individuals are deprived of their right to choose how to allocate the fruits of their labor.

Let’s leave the wealth and the luck to those who have it without violating anyone’s rights. It may not always work out to everyone’s satisfaction but it will certainly be far superior to giving the power to the likes of Hillary Clinton.

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