There are many well-documented misunderstandings regarding the opinions and values of the Founding Fathers. One of the biggest and farthest reaching misunderstandings regards the role of government in redistributing wealth among the American people. Democrats are drided as the Take-From-The-Rich--and--Spread-It-Around folks while the Republicans jump on every opportunity to criticize any tax plan that they see as shifting wealth from the wealthiest to the working classes. "Class warfare!" they cry. "Socialism!" they shout. "Un-American and un-patriotic!" I listen and wonder if we are witnessing the last best stand of the American Aristocracy fighting to maintain its unfair advantage, and access to, the economic and political stage.
Shall we call it socialism when govenment uses tax policy and regulation to share the nation's wealth to deliberately cause some level of equity? If so, America has lost touch with vital parts of the original foundation of American democracy. Men such as Adam Smith and Thomas Jefferson, Noah Webster, Theodore Roosevelt, William Gates Sr. and others would disagree heartily with modern conservative claims of "socialism." In fact, according to these men, equitable distribution of wealth in America is one of the founding principals of American democracy.
I think that people who have the good fortune, the skill, the luck to become wealthy in our country simply have a debt, simply have a debt to the source of their opportunity. So I just don't see any problem with an estate tax which recovers from those folks at the time of their death, and at the time of the transfer of that wealth to their progeny or wherever, of imposing a tax which in some part recovers and generates payment of what seems to me to be a very clear and simple obligation. That is why so many of us feel that this is not only an appropriate tax, it strikes me as about the fairest of all. William Gates, Sr., Forum on Estate Tax, Tax Policy Center, 2003.What a simply wonderful, patriotic idea. If one is fortunate enough to have been born in a time and place that provides the opportunities to amass great wealth, one owes the nation something in return. Why not? America gave you order and structure, saftey and rules, not to mention physical infrastucture. All of these helped lead to your success. And those all have a value. A value that should be returned as a debt paid back. President Obama addresses the same idea in his Roanoke Va. speech from last July.
I’m always struck by people who think, well, [my wealth and success] must be because I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something -- there are a whole bunch of hardworking people out there. If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business -- you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.We have a great nation that is great because of what we have accomplished together in the name of American exceptionalism. So when productivity rises, yet real wages drop, somebody is getting the big payoff and it isn't the workers. Conservatives love to quote Jefferson about "a wise and frugal government … shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.” -Thomas Jefferson, First Inaugural Address, March 4, 1801. I agree, but only in the context of the rest of Jefferson's beliefs. Today, corporate power is so consolidated and powerful that it is the corporate leaders who "take from the mouth of labor the bread it has earned" by forcing the working class into jobs that do not pay enough to live on and expecting those workers to shoulder the highest percentage of the tax burden. The Corporate Aristocracy has elevated itself to an "entitled" position of power and importance. This Aristocracy--this entitlement--is inherently damaging to a democracy.
The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together...So we say to ourselves, ever since the founding of this country, you know what, there are some things we do better together. Barack Obama
The causes which destroyed the ancient republics were numerous; but in Rome, one principal cause was the vast inequality of fortunes. Noah WebsterEarly Americans were all too familiar with European Aristocracy and as they began to conceive this new nation they wanted a new idea based not on Aristocratic order but on shared political power. For that to happen they believed there had to be relative equity in wealth among the citizens of America. There was a strong belief that inherited wealth would lead to a rising Aristocracy with wealthy families consolidating unfair political power. Both Thomas Jefferson and Adam Smith, that great Conservative champion, found it impossible to accept that great wealth should be passed on from parent to child. Because of this they stood firm on a redistribution of wealth in the form of an inheritance tax.
The disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect persons of poor and mean condition is the great and most universal cause of the corruption of our moral sentiments. Adam Smith
If there was one thing the Revolutionary generation agreed on — and those guys who dress up like them at Tea Party conventions most definitely do not — it was the incompatibility of democracy and inherited wealth. Stephen Budiansky's Liberal Curmudgeon Blog, October 2010.
A power to dispose of estates for ever is manifestly absurd. The earth and the fulness of it belongs to every generation, and the preceding one can have no right to bind it up from posterity. Such extension of property is quite unnatural. Thomas JeffersonIf developing laws and tax policies that redistributed wealth with the specific purpose of creating relative equity among the citizenry were priorities for the Founding Fathers, how would they feel about the current marriage of politics and economics in our country today? Would they be horrified by the American Aristocracy and its spokesman, Mitt Romney's comments about the 47%? Would our Founding Fathers, knowing even then how extreme wealth corrupts democratic institutions, condemn or accept the Citizens United ruling? Would the Founding Fathers shake their heads at the lowest tax rates going to those who, by luck of their own birth, inherited their wealth as well as to those who do no actual work for their gains?
There is no point more difficult to account for than the right we conceive men to have to dispose of their goods after death. Adam Smith
So I wrap up my thoughts on this topic (for now at least) with the following. I believe it articulates exactly what is happening today in American national politics.
A State divided into a small number of rich and a large number of poor will always develop a government manipulated by the rich to protect the amenities represented by their property. Harold Laski, British political theorist (1893-1950).
You know, like car elevators and offshore bank accounts and tax dodge loopholes.