American News

The Daily Devil’s Dictionary: “Investing” in Cake

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Senate tax reform, US tax reform, estate tax, death taxes, Chuck Grassley, Trump tax reform, Republicans, Republican Party, investing, USA news today

© aradaphotography

December 06, 2017 06:01 EDT
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The rich rise up against women, booze and movies.

In the wake of the Senate’s vote on tax reform, Iowa Republican Senator Chuck Grassley, a key member of the Senate Finance Committee, explained the real reason for abolishing the estate tax, which is currently applied to personal wealth valued at more than $5.5 million. “I think not having the estate tax recognizes the people that are investing, as opposed to those that are just spending every darn penny they have, whether it’s on booze or women or movies.”

Grassley appears to have studied in great detail the daily activities of the rich and the poor, an admirable accomplishment, worthy of our finest sociologists.

Here is today’s 3D definition:

Investing:

A common activity of people who discover they still have money in the bank even after spending it on conspicuous consumption, lavish celebrations of their own egos and various forms of self-indulgence, who then find it convenient and amusing to speculate on other ways to effortlessly increase their wealth.

Contextual note

The first thing to understand is that the current version of the tax only applies to the value of the estate in excess of $5.5 million and twice that for married couples. This means that if a deceased individual’s estate is valued at $6 million, the tax is applied only to the $500,000 over and above $5.5 million. The new tax bill doubles the amount that remains tax-free — $11 million for an individual, $22 million for a couple. The House’s version will eliminate it entirely in 2024. There are, of course, numerous means of distributing one’s estate to family before dying to ensure that no tax will be paid. That’s what lawyers and accountants are paid to do.

That being true, Grassley would have a more convincing argument if he were to point out that the elimination of the state tax served a truly noble purpose by eliminating the need to hire lawyers to dodge the estate tax. After all, lawyers — who generally have no problem paying their own rent and electricity bills or sending their children to college — are the most likely class of people to spend their pennies “on booze or women or movies.”

And the logical conclusion would be that the money saved on lawyers and accountants could be fruitfully invested. For example, in a private plane, yacht or beach home. Or by simply placing it in a tax haven, which they’ve probably already done anyway, on the advice of their lawyers and financial counselors.

Historical note

The marketing wizards in the Republican Party, who insisted on calling the estate tax the “death tax,” know that death is the one thing all Americans are frightened of, since they all share the same wild hope of becoming both rich and immortal. That’s what drives the American dream. For ages, Americans have been told that the only things that are inevitable are “death and taxes.” But since all obstacles can be overcome in America’s “can-do” culture, the determination to fight the inevitable remains fierce. Thus, the cult of youth, the permanent repression of thoughts of death, the invention of techniques promising to abolish or at least postpone it (cryonics), and the belief that taxes represent nothing more than the immoral incursion of an invasive government in the lives of honest people.

The estate tax has been in effect since 1916 and has been under attack since the Reagan administration in the 1980s, when “trickle-down” economics became the unofficial ideology of the government and both major political parties. Grassley has expressed an extreme form of trickle-down theory, where the last thing that trickles out is the direct result of the booze consumed. But various prominent wealthy and super-wealthy people have not only found strong reasons to oppose abolishing the estate tax — they have even militated to reinforce it.

In 2012, Forbes reported on the initiative of “a group of wealthy Americans.” One of them, Abigail Disney, “a philanthropist and filmmaker and heir to the Disney fortune,” offered this line of thought: “We have the choice of taxing a small percentage of the wealthiest who certainly can afford it, or we can cut social programs for those who need them.”

In the combat of reasoning between Grassley and Disney, Grassley’s side has prevailed. If there is no bread for the people, let the rich invest in cake.

*[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce, produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book, The Devil’s Dictionary, in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news.]

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

Photo Credit: aradaphotography / Shutterstock.com

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