Thursday, March 03, 2005

Values in law.

Sometimes, law reflects values.

Social Security reflects a value. The young are responsible for the old just as the old were once responsible for the young. The people supporting retirees are the younger workers. The SSA is effectively a middleman, one big bank account into which the workers of America pay and the former workers of America draw.

What privatization says to me is "old folks are on their own."

The inheritance tax reflects a value. It's wrong to hoard. Imagine the world is a town. One man has ten times more bread than he can ever consume in his lifetime, and the other citizens are going hungry. It's pointless hoarding. Now imagine it's "wealth" rather than bread. To encourage people to work for wealth, we let them keep the wealth they earn. After they're gone, however, the hoard they were unable to consume gets redistributed.

If you have no problem with hoarding, consider this from "A Minor Political Screed" by David Brin:
Now there's a funny thing about the inheritance tax - it's effects are vastly greater than they seem at first sight. At the surface, it doesn't look like the government's biggest source of revenue. In fact, its chief effect over the years has been encouraging super-rich folks to create charitable foundations, in order to keep their money away from the IRS!

Get this -- in the USA, charitable giving by the rich is MORE THAN TEN TIMES as high as it is in Europe! Studies credit most of this difference to the inheritance tax, spurring the wealthy to use their money to buy fame and gratitude, rather than let Uncle Sam decide how it will be spent.
This is what I think of when I hear folks talk about cutting taxes (often for the rich) and cutting funding for social programs, thinking that the people will give their extra money to charity as a result. It doesn't even out.
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