Richard Epstein, responding to Paul Krugman’s Op-Ed in the New York Times, defends the Republic position on unemployment benefits, the estate tax and health care. With regard to the estate tax he writes:
So let’s start with the estate tax and ask whether a tax that exempts 99.75%, of all estates, as the Democrats propose, is better than one that just abolishes the tax altogether. I vote for the latter. The estate tax operates as the third tax on the accumulation of wealth–after progressive taxes on earnings and savings. That heavy state and federal key drives many people to take grotesque steps to minimize their liabilities, which in part explains why only 0.25% of the people pay it. By forcing these dumb maneuvers, the tax distorts the accumulation and transfer of capital in ways that could easily reduce the production of wealth that could be subject to an income tax. Only if you think that hitting the most productive portions of the population is the right way to instill a sense of national unity would you want to keep this ship afloat.
The full article can be read here.
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