Dear Mr. Gates:
As I read back over our exchange on the death tax, a few concluding thoughts.
First, minimizing the tax burden the government places on individuals is the right policy. We do not exist to satisfy government; it’s the other way around. Lowering taxes increases economic growth, which means more opportunity for everyone. That is one of our primary policy goals. Since the average federal income tax burden on Americans is at its all time historic high, and since there is a large ($5.6 trillion) projected budget surplus, this is the right time to cut taxes.
The death tax is a good candidate for reduction for two reasons. It is fundamentally unfair; taxing what people earn as they go along is one thing, but taking up to one half of anything unspent when people die is very different. You said in your first response that one of your goals was to get as close as we can to everyone starting life from the same position. That would require a 100 percent death tax on everyone; the government would take everything you have saved and created in your life’s work when you die. That would be outrageously unfair; a 50 percent death tax is only slightly less unfair.
Like all taxes aimed at a few thousand wealthy people, the death tax in reality penalizes tens of thousands of middle-class families as well. If one is a collectivist who believes that government making decisions for all of us is better than individuals making decisions for themselves, that is fine. But if you are a believer in liberty, that people have “unalienable Rights … [to] Life, Liberty and the pursuit of Happiness,” confiscation by the government of half of a life’s work is wrong.
Finally, shouldn’t this whole discussion be focused on expanding rather than contracting the winner’s circle? Instead of working to limit the success of the wealthy we should be devoting our energies to increasing the opportunities of the less successful.
In the 20th century the overriding domestic policy goal of government was to create a safety net to make sure every American had access to basic needs—safety, health care, jobs, and retirement income. We have done well in accomplishing that goal. In the 21st century with its extraordinary technology perhaps it is time for a new overarching goal: to open up opportunity and financial security to everyone. That means, in order of magnitude, a better education system, and helping the two-thirds of Americans who have no savings or investments up the economic ladder. High tax rates are an impediment to that goal.
Helping every person achieve the American dream of opportunity and economic security is work worth doing.