The Filthy Rich

The New York Times has a very interesting article on how the wealthiest Americans keep getting richer. The problem is, they've chosen a few bad examples. Here's one:

To see his point, take Oracle’s founder, Lawrence J. Ellison. Mr. Ellison’s net worth last year was around $16 billion. And it will probably be much bigger when the list comes out in a few weeks. With $16 billion and a 10 percent rate of return, Mr. Ellison would need to spend more than $30 million a week simply to keep from accumulating more money than he already has, to say nothing of trying to spend down the $16 billion itself.

First of all, Ellison's money isn't in a bank account or in bonds. He can't just earn 10% a year. His money is in stock, chiefly in Oracle, the company he founded and continues to run. He CAN'T give his money away without losing control of his company, which could lead to losing his job. The same holds true of Bill Gates or Warren Buffett, or anyone whose wealth is mostly in the stock of a company they run.

The article goes on to talk about the Waltons and other families with inherited wealth, and here the concerns are perfectly applicable, and the question remains valid: why on earth do they need all of that money?

This is why we need the estate tax. People argue that the money has already been taxed, but I find this unconvincing. It's already been taxed as another person's money. I could make a similar argument about profits made from selling a car or a house - the person who paid me had already paid taxes on that money.

Individuals should pay taxes on any money coming into their possesion for the first time; we only use the estate tax because it's simpler to tax the estate than sorting through income taxes for all the beneficiaries.

The Republicans have been effective in labelling the estate tax the "death tax." Why haven't Democrats been equally effective in labelling it the "Paris Hilton tax?"