Thursday, March 16, 2023

America’s Death Tax Has Caused Far More Problems Than It Has Solved

“I have no respect for the passion of equality,” Oliver Wendell Holmes Jr., one of America’s great jurists, once declared, “which seems to me merely idealizing envy.”

But envy, and its sister vice, greed, are very much back in fashion today when it comes to the left. Just listen to President Biden, who wants $2 trillion of new taxes, mostly paid by millionaires, so that the rich will “pay their fair share.”

In seven blue states, including California, Illinois and New York, new wealth taxes and higher income tax rates on people such as Bill Gates, Warren Buffett, and Taylor Swift have been proposed by liberal lawmakers.

Mr. Biden said billionaires aren’t “paying their fair share” and shouldn’t be paying a lower tax rate than a firefighter. That’s a ridiculous claim. The richest 1 percent of Americans pay 42 percent of the income taxes in America. That’s near an all-time record high.

The Tax Foundation reports that if all the new wealth, capital gains and income tax surcharges under consideration were to be enacted, the government could snatch up to as much as 70 percent of a millionaire’s savings or assets. Does taking two-thirds of someone’s lifetime savings sound “fair” to you?

Liberals seem to forget that we already have had a grand experiment with a wealth tax in America: It’s known as the “death tax.” This tax on gifts and estates has been around for a century. And it has caused far more migraine headaches and problems than it has solved.

The current tax rate is 45 percent on estates above $12 million. When including state levies, this means the government can help itself to nearly half the assets of a family-owned business at the time of the owner’s death.

The estate tax was originally proposed by Karl Marx. It was and still is touted as a Robin Hood plan to redistribute the “great hoards of wealth” amassed by the Rockefellers, the Fords, and the Carnegies to the lower-income Americans.

But guess what? It has never come close to working. Over the past 50 years, it has never accounted for more than 3 percent of total federal revenues. Amazingly, in 2020, the latest year for which we have complete and accurate IRS data, the estate tax raised $17.6 billion out of the $3.5 trillion in federal revenue. This is roughly enough revenue to pay one day’s worth of federal spending.

Another way to appreciate how fiscally inconsequential this wealth tax is, it represents a microscopic one-half of 1 percent of all federal revenue collections. The preliminary numbers for 2021 show the same pattern. Roughly $20 billion was raised out of a $4 trillion budget, or again close to 0.5 percent of tax collections.

Yet America’s tax on estates and gifts is nearly three times higher than the charge in most other industrial nations. Sweden, even with its large welfare state, abandoned its estate tax many years ago as counterproductive.

Why don’t wealth taxes work? Because the rich don’t generally get rich by being stupid. They have found myriad ways around paying it. They hire the planet’s best estate tax planners, lawyers and lobbyists to keep their fortunes two arms’ length away from the tax collector.

The most obvious example is that multibillionaires Mark Zuckerberg, Jeff Bezos, Buffett and Gates have stashed almost their entire fortunes in perpetual foundations from which the government will never collect a penny.

More to the point: There is a moral and ethical reason to hate greed and envy taxes such as this. What is wrong with achieving the American dream and getting rich?

Accumulating wealth by building a world-class business and, on the way, employing thousands of your fellow citizens or achieving new heights of greatness in arts, entertainment, sports or medicine is not a vice to be punished but a virtue to be celebrated. Taxing the rewards of that pursuit of excellence is a fool’s errand.

The real-world harm of this “wealth tax” is immense. Family businesses get clobbered by this tax because oftentimes, the founder of the enterprise, who spent his waking hours building up the business, typically never gave a second thought to “wealth tax planning.”

Remember: Every successful big business started as a small business. As a consequence, many heirs have to sell the family business, farm or ranch just to pay the taxes. That’s un-American.

Let’s get rid of envy taxes that punish those who chase their dreams and catch them. Biden wants a $7 trillion government and wants the rich to pay for it all. That doesn’t seem very fair, and it doesn’t seem very democratic. And history proves it never works.


The Tooth-Fairy Economics of Slavery Reparations

The reparations movement has gained tremendous ground in recent years by offering promises of compensation to the descendants of slavery’s victims in the United States. The proposal forms the centerpiece of the New York Times 1619 Project, which is now a multi-million-dollar docuseries on the Hulu streaming service. A reparations task force in San Francisco recently recommended $5 million payments to African-American residents, and several Democratic members of Congress have pressed the Biden administration to prioritize the same cause at the federal level. Reparations have even made their way into children’s programming, with a recent episode of the Disney cartoon “The Proud Family” depicting them, angrily and self-righteously, as society’s obligation to African-Americans.

The rhetoric around these proposals often adopts a moralizing tone about restitution for past injustices, many of which are all too real. As a matter of economics, though, reparations advocates offer surprisingly little in the way of viable solutions. If the US government tried to implement the reparations program that the 1619 Project espouses, we would get huge increases in both taxes and inflation. Yet the key economist advising on this proposal denies that any taxes would have to increase.

In the climactic conclusion to the Hulu series, 1619 Project creator Nikole Hannah-Jones explains that “reparations is not just about slavery, but about decades of government-backed legal apartheid deployed against the descendants of the enslaved.” As we pointed out in “The 1619 Project Vindicates Capitalism,” in the Wall Street Journal on February 22, 2023, “almost every example presented is the result of government policies that, in purpose or effect, discriminated against African-Americans.” The particular interventions we highlighted were eminent domain, racial redlining of mortgages, and enforcement of union monopolies that excluded black people.

But the only remedy for the mislabeled track record of government-inflicted injustice, viewers are told, is a massive government redistribution program with a price tag of $13 trillion. Let’s put this in perspective in two ways. First, $13 trillion is over half of current US GDP. Second, it amounts to $312,000 per black man, woman, and child. If you gasp at San Francisco’s $5 million and think $312,000 is no big deal, realize that $310,000 in reparations per person, multiplied by about 41.6 million African-Americans, is quite a big deal.

Ms. Hannah-Jones interviews Duke University economist William A. Darity, one of the most prominent academic voices behind the $13 trillion number. Darity has advanced similar dollar amounts in his scholarly work, including a 2022 article in the Journal of Economic Perspectives. As with the Hulu episode, he offers this figure while eliding difficult questions about financing this redistributive payout.

Vaguely sensing that there’s no such thing as a free lunch, Hannah-Jones asks where the federal government would get the money to pay such a massive amount. Wouldn’t taxes have to be raised, she queries. Mr. Darity confidently asserts that no such action is necessary.

“It’s a matter of the federal government financing it in the same way that it financed...the stimulus package for the Great Recession” and the COVID-era CARES Act, Darity continues. To do so, the federal government need only “spend the money but without raising taxes.”

This verges on tooth-fairy economics.

The cold reality of public finance means that every government outlay must be paid eventually, whether through taxes in the present, higher inflation, which is also a tax, or higher taxes on future generations. The federal government has no good option when it comes to just “spending the money.”

If the Federal Reserve monetized the whole amount, base money, which is currency in circulation plus bank reserves, would increase by $13 trillion. M2, the conventional measure of the money supply, is 3.96 times the monetary base. If that relationship held, then increasing the monetary base by $13 trillion would increase M2 by 3.96 times $13 trillion, which is $51 trillion. M2 is currently $21 trillion. $51 trillion is a whopping 245 percent increase. So if the spending occurred all in one year, inflation would be about 240 percent. Critical Race Theory would unite with Modern Monetary Theory in an inflationary spiral.

What if the Fed didn’t buy any of the new debt? Then future taxpayers would be on the hook. In a given year, the federal government raises about $4.8 trillion in revenues. So paying off just the new $13 trillion debt would require almost three years of federal revenue.

The only other alternative to increasing current taxes, creating massive inflation, or increasing future taxes would be to enact massive cuts in other programs. Remember earlier this month when, in his State of the Union address, President Biden accused congressional Republicans of wanting to sunset Social Security and Medicare? If the $13 trillion reparations were paid, sunsetting those programs, or reining them in by a double-digit percent, would almost certainly be on the table.

Almost everyone who designed the government’s discriminatory programs is long gone from office; most are dead, as are all plantation owners who perpetrated the original atrocities of slavery. So the vast majority of people who would shoulder the financial burden of reparations are people who had nothing to do with either slavery or the century of discriminatory policies that followed.

How about instead going through the various federal programs, and state and local programs, for that matter, that intervene in markets or violate property rights, often in discriminatory ways, and ending them? It would be great if Nikole Hannah-Jones and William Darity signed on to this 2023 project.


‘Good’ Rioters and ‘Bad’ Ones

The difference in sentencing between Capitol trespassers and anti-Trump rioters and leftist firebombers is glaring.

“I hope they burn everything down,” said Urooj Rahman to Colinford Mattis in a message hours before they took to the streets of Brooklyn to rage on behalf of George Floyd. “Need to burn all the police stations down … probably all the courts too.”

It was strange sentiment for one lawyer to express to another — especially that last part. Some might even call it violent insurrectionist sentiment.

But here they were, these two lawyers — Rahman, then 31, having graduated from Fordham University Law School, and Mattis, then 32, a proud graduate of both Princeton and NYU Law School — talking about burning down the instruments of civilized society that they’d sworn to uphold.

When Rahman joined protesters that night, she wrote to Mattis: “Throwing bottles and tear gas … lit some fires but were put out … fireworks goin and Molotovs rollin.”

The highlight of this night of mayhem was when Rahman stepped out of Mattis’s tan minivan and Rahman hurled one of those Molotov cocktails into an empty NYPD vehicle outside the 88th Precinct station house, torching it.

For this, she was sentenced to 15 months, while Mattis got one year and one day. Nice sentencing if you can get it.

Then there were the hundreds of rioters who burned cars and smashed storefronts in DC in 2017 during President Donald Trump’s inauguration — and had their charges dropped altogether by the Department of Justice. All of them. Think we’re exaggerating? Go ahead, look it up.

And then there’s Navy veteran Jacob Chansley, 33, the guy best known as the fur-bearing, horn-helmeted QAnon Shaman of January 6 infamy. Indeed, his was the very face of that mostly peaceful non-insurrection that took place inside the Capitol — as opposed to the thuggish behavior of those outside the Capitol grounds who climbed walls, broke windows, and skirmished with cops.

“Virtually every moment of his time inside the Capitol was caught on tape,” said Tucker Carlson upon revealing video of that day which, thanks to the rigged January 6 Committee, had never been seen before by the public.

“The tapes show the Capitol Police never stopped Jacob Chansley,” Carlson continued. “They helped him.” Indeed, they walked him past seven other cops milling around outside the Senate chamber, who barely give Chansley a second look. And yet, as Carlson continues, “Jacob Chansley became the face of January 6, a dangerous conspiracy theorist dressed in an outlandish costume who led the violent insurrection to overthrow America’s democracy.”

“The one very serious regret that I have,” said Chansley in a jailhouse interview, “is believing that when we were waved in by police officers, that it was acceptable.”

There are conflicting accounts of Chansley’s activities that day. As the Washington Examiner reports: “The footage, released by Fox News host Tucker Carlson on Monday, does not include most of the evidence that is damaging to Chansley, according to the filing by prosecutors of Proud Boys member Dominic Pezzola, who was also sentenced for his involvement in the Capitol riot. Of the footage that Carlson has shown, the 10-page filing read, all of it took place between 2:56 p.m. and 3 p.m. on Jan. 6, even though Chansley had already breached a police line at 2:09 p.m. and then entered the Capitol.”

One thing we’re not hearing from credible sources, though, is that Chansley behaved violently. In fact, he’s on video tape reading then-President Donald Trump’s tweet and telling the crowd: “Everybody go home. We made our points.”

And for that, Jacob Chansley got 41 months in prison. And that was after having done 10 months in solitary confinement.

As free-thinking independent journalist and one-time leftist Glenn Greenwald put it at the time, “Only a sick, punitive society imprisons non-violent protesters for years in harsh conditions — or one that regards particular ideologies as inherently criminal.”

Just think: Chansley would’ve been better off tossing a Molotov cocktail into a cop car.


Another false rape claim in Britain

There was rash of them some years back

A fantasist whose lies about being raped by an Asian grooming gang drove three men to attempt suicide was today jailed for eight and a half years - as CCTV footage revealed the moment she bought a hammer which she used to beat her own face in.

Eleanor Williams, 22, was found guilty of perverting the course of justice earlier this year after accusing several innocent men of raping, trafficking and abusing her in a Facebook post that included graphic images of injuries she claimed to have sustained.

The post, made during lockdown in May 2020, was shared more than 100,000 times and sparked national outrage, leading to dangerous racial unrest and a protest in her hometown of Barrow-in-Furness attended by Tommy Robinson, founder of the far-Right English Defence League.

But evidence would reveal her allegations were entirely made up. CCTV showed her in Tesco buying the hammer she would use to harm herself and a packet of Pot Noodles she ate in a hotel at the same time she claimed she was being held captive.

The fallout from her elaborate tissue of lies saw three of the wrongly accused men try to take their own lives, a curry house attacked by thugs and a Muslim takeaway owner chased down the street by men who poured alcohol on his head.

Sentencing, Judge Robert Altham said there was 'no explanation' for Williams's lies as he criticised her for showing 'no significant sign of remorse'. He said she was not racially motivated and chose to accuse Asian as well as white men to copy 'other cases of national prominence'.

Preston Crown Court heard she had been with others at Cameron Bibby's house in November 2017 when she was sick after drinking alcohol and smoking cannabis.

Mr Bibby and his friends contacted Williams's sister and mother, who came to collect her and later took her to hospital, where she alleged she had been raped.

In March 2019 Williams had been on a night out with Jordan Trengove when she was taken home after becoming intoxicated.

She would later allege Mr Trengove raped her that night, and then on two later occasions, claiming he came to her flat, attacked her and threatened her with a knife.

Judge Robert Altham said: 'She caused [the injuries] to herself to support her allegations. As we will see this was to become a feature of her conduct.'

Williams claimed she had been groomed since the age of 12 or 13 by local business owner Mohammed Ramzan, who she falsely claimed took her across the region and persuaded her to have sex with other men.

She described punishment beatings, rape, a girl nearly dying as a result of a beating and another having a dog set on her.

Williams told police she had been taken to Amsterdam by Mr Ramzan, forced to work in a brothel and sold at an auction for 25,000 euros, but the buyer did not go through with the deal.

During the trial, Jonathan Sandiford KC compared the account to a scene from the Liam Neeson film Taken, in which an ex-Secret Service agent's teenage daughter is abducted by human traffickers.

At the time Williams was in the Netherlands Mr Ramzan's bank card was being used at a B&Q in Barrow, police discovered.

Williams said she was taken to Ibiza by Mr Ramzan and made to have sex with men. She admitted this was not true when officers suggested they check flight documents, but at trial she maintained the allegation.

When police investigated Williams's account of being taken to addresses in Blackpool and forced to have sex with men, they found she had gone to the seaside resort alone and, after buying a Pot Noodle from a nearby shop, spent most of her time in her hotel room watching YouTube.

After a chance encounter with Oliver Gardner in Preston city centre, Williams initially claimed he was a trafficker who forced her to take cocaine, sold her to two Asian men and raped her.

Judge Altham said: 'This was a complete fabrication, much of it would be disproved from CCTV.'

In what the prosecution called her 'finale event', in May 2020 Williams was found by police with injuries including a swollen eye, cut finger and injuries to her legs and abdomen which were 'too numerous to count'.

She would later post pictures of the injuries on Facebook with a description of being beaten, groomed and trafficked by Asian men.

But, evidence from a pathologist found the injuries were consistent with being caused to herself.

A hammer found at the scene had her DNA on and was identical to one she had purchased from Tesco earlier in the month.

The judge said: 'It is troubling to say the least that she shows no significant signs of remorse.'

Describing the allegations she made as 'complete fiction', he added: 'Unless and until the defendant chooses to say why she has told these lies we will not know.'

Williams, whose case drew attention from high-profile figures including Geordie Shore's Holly Hagan-Blyth and Countdown presenter Rachel Riley, looked straight ahead and thanked the judge after he sentenced her.

Mohammed Ramzan, a business owner who was accused of grooming Williams, told the court his life had been made 'hell on earth' by false allegations.

Earlier, the court heard that 150 extra crimes were recorded in Barrow amid the backlash prompted by Williams' Facebook post.

Speaking outside court following the hearing, Mr Ramzan said: 'There's no winners here today, I feel no sense of triumph, only sadness. 'I'm not sure how the family and I are going to recover from this. Mud sticks and I fear it may take some time.'

Mr Ramzan, who was in tears as he spoke from the witness box, said two weeks after he was arrested following Williams's claims he attempted to take his own life. He said: 'I still bear the scars to this day.'

Mr Ramzan said his property had been damaged and his businesses had been 'ruined' after he and his family were targeted 'in the most horrendous way'.

'We had messages like people are going to rape my wife in front of me. From Islamophobia, to racism, to just general hate - people wishing me dead,' he said.

'My children had fire extinguishers, baseball bats next to their beds for their safety because we had threats. People were going to burn the shops down, burn us down.

'We had rental properties in town smashed in. Is that the type of persecution that goes on today in a town where there's only a handful of Asians, and everybody knows these Asians?

'They've all dealt with me. I've fed them all because I've been in the food industry. I've fed them all, from the children to the adults to the grandparents... and they turned on me.'

Jordan Trengove, who spent time in custody after being falsely accused of rape by Williams, told reporters he planned to take action against the police.

He said he does not believe Williams has shown any remorse, adding: 'I don't think the sentence is long enough, in my opinion, for what she's done to us all.'

Mr Trengove said his life was 'utterly destroyed' by William's allegations. The word 'rapist' had been spray-painted across his house and his window was smashed. After he was charged following Williams's claims, he said he spent 73 days in prison, where he shared a cell with a convicted sex offender.

He said: 'Things had calmed down a bit until the Facebook post in 2020. 'This made things even worse for me. There were big protests and marches in Barrow. The lowest point was when I tried to end my life in August 2020.'

He said he will 'move out the area' when Eleanor Williams is released from prison in four years, having served half her sentence.

Oliver Gardner said his chance encounter with Williams in Preston led to him being sectioned under the Mental Health Act. Mr Gardner, who was accused of rape after he met Williams in the city centre, said it was a 'real shock' when he was contacted by Cumbria Police and told of her claims, adding: 'It was just a case of being in the wrong place at the wrong time.'

In his statement, he said he tried to end his life before being sectioned, saying: 'This whole period in my life has been totally overwhelming.'

Cameron Bibby, who was the first man accused of rape by Williams in 2017, said he had to remove himself from most social media. Because of the online abuse, he also became scared to pick his son up from nursery because of the way people looked at him.

He said after Williams posted her account on Facebook, his neighbours displayed 'Justice for Ellie' stickers in their windows, which 'intimidated' him.

Superintendent Matthew Pearman, of Cumbria Police, said Williams's allegations led to 'public displays of mass anger' in Barrow, with protests held outside the police station and on a retail park.




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