The Progressive Underpinnings of the Estate Tax

Why is there an estate tax at all?  An interesting article in The Nation "The Plutocracy Prevention Act" explores the ideological underpinnings of the enactment of the federal estate tax in 1916.

A century ago this summer, Theodore Roosevelt gave his remarkable "New Nationalism" speech about the dangers of concentrated wealth and corporate power. After witnessing a decade of financial corruption and corporate malfeasance, Roosevelt called on the nation to "effectively control the mighty commercial forces which they have themselves called into being."

 Hmm, dangers of a "decade of financial corruption and corporate malfeasance" - sound familiar at all?  Madoff and BP come to my mind.

 The article goes on to provide why the estate tax was structured as it was:

Part of his vision was a "graduated inheritance tax on big fortunes, properly safeguarded against evasion and increasing rapidly in amount with the size of the estate." Congress instituted an estate tax in 1916 that was in place until last January. For most of the last century, the estate tax was a single tax rate. A person with $5 million was taxed at the same rate as someone with $5 billion.

While the author is using this history lesson to underscore their support for the newest estate tax legislation (see prior post "Estate Tax News From Washington") where there is a "billionaire surcharge" I find it interesting that the facts and circumstances that gave rise to the estate tax almost a century ago are so similar to those facing us today.

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