A letter from an ill-mannered former high-school classmate of long ago, one of several like it, which I pass on in paraphrase: "I saw that your father had died," she wrote. "He was always so clever about money. Did he leave you a big estate? Did he figure out a way around the estate tax?" It's a rude question, but it has an answer.
My sister and I have been going through my father's estate lately with his lawyer, and we're pawing through old, dusty files to find bank account numbers and rules for annuities, so maybe it's a good time to think about what my father, Herbert Stein, left to us.
He did indeed leave some money. By the standards we read about in the Wall Street Journal or Sports Illustrated, it was not worthy of much ink. In any event, because of the class-warfare-based death tax, the amount that will be left is vastly less than what he had saved. As an economist, my father was famous for defending taxes as a necessary evil. But even he was staggered, not long before his death, when he considered the taxes on his savings that would go to the Internal Revenue Service.
The nest egg is going to be taxed at a federal rate of about 55 percent, after an initial exemption and then a transition amount taxed at around 40 percent (and all that after paying estate expenses). When I think about it, I want to cry. My father and mother lived frugally all their lives. They never had a luxury car. They never flew first-class unless it was on the expense account. They never in their whole lives went on an expensive vacation. When he last went into the hospital, my father was still wearing an old pair of gray wool slacks with a sewed-up hole in them from where my dog ripped them--15 years ago.
They never had live-in help. My father washed the dishes after my mother made the meatloaf. My father took the bus whenever he could. His only large expenditure in his and my mom's whole lives was to pay for schools for his children and grandchildren. He never bought bottled, imported water; he said whatever came out of the tap was good enough for him. They still used bargain-basement furniture from before the war for their bedroom furniture and their couch. I never once knew them to order the most expensive thing in a restaurant, and they always took the leftovers home.
They made not one penny of it from stock options or golden parachutes. They made it all by depriving themselves in the name of thrift and prudence and preparing for the needs of posterity. To think that this abstemiousness and this display of virtue will primarily benefit the IRS is really just so galling I can hardly stand it. The only possible reason for it is to satisfy some urge of jealousy by people who were less self-disciplined.
There are a few material, tangible items that an assessor will have to come in to appraise. There are my father's books, from his days at Williams College and the University of Chicago, many of them still neatly underlined and annotated in his handwriting, which did not change from 1931 until days before his death. Most of them are about economics, but some are poetry.
That's another item my father left: his own poetry and his massive prose writings. Very little of it is about anything at all abstruse. There are no formulas and no graphs or charts, except from his very last years. There are many essays about how much he missed my mom when she died, about how much he loved the sights of Washington, about how dismaying it was that there was still so much confusion about basic issues in economics. And there are his satires of haiku about public policy, his takeoffs on Wordsworth and Shakespeare, often composed for a friend's birthday, then sometimes later published. I suppose there will not be much tax on these because my father was hardly a writer for the large audience.
Some of them will go to the Nixon Library, and some will be on bookshelves in the (very small and modest) house my wife and I own in Malibu, a place he found beguiling because he had always wanted to live by the ocean and write. And there are his furniture and his clothes, none of which has any value at all except to me because they remind me of him and because, when I stand near them in his closet, I can still smell his smell of hair and skin and leather shoes, the closet smelling a lot like he smelled when he came home from work in 1954 carrying a newspaper that said there could be no more racial segregation in schools. And there are his mementos of Richard Nixon, his White House cufflinks, photos of Camp David, certificates and honorary degrees, and clippings of great events of state. And there are his love letters to and from my mother when they were courting in 1935 and 1936, still tied with light blue ribbon in what was my mother's lingerie drawer, talking about their love triumphing over the dangers of the Depression. I suppose we'll have to place a value on these and have them taxed, too.
But these are the trivia of what he left me and my sister. The really valuable estate cannot be touched by the death tax. The man's legacy to his family has almost nothing to do with anything that can be appraised in dollars and cents.