The concept of an inheritance tax must be the mother of all morally repugnant taxes.
This is easily understood when one reflects upon the impact such taxes have upon the lives of individuals whose lifelong strivings have culminated in the accumulation of estates which they wish to pass on to their descendants. These are estates that the individuals have created, without assistance from government. Yet politicians are bent imposing and then pillaging or squandering taxes on these hard-earned assets in the name of income equality or redistribution of wealth.
It is amazing how statist policymakers have swallowed the case in favour of income equality, without a thorough, objective evaluation of this fetish and its broader socio-economic and moral implications.
The wisdom of the Greek philosopher Aristotle (384 - 322 BCE) more than two millennia ago, ought to have closed the debate. He said: "The worst form of inequality is to try to make unequal things equal."
Parents possess a natural instinct to protect their children and provide for them materially and in all other respects, so that they grow up to be socio-economically self-sufficient.
Concomitantly, most parents also cultivate and nurture in their children the values and principles needed to define them as honest, morally upright citizens, who become an asset to the community and the country. Many parents sacrifice a great deal to achieve this virtuous end. In some remarkable cases, in anticipation of bringing forth children, they start to set aside savings for their future benefit. So-called misers embark on this venture to an even greater degree than most other people.
This cross-generational instinct explains why many grandparents will eagerly assist their own children with parenting and may attempt to take over responsible parenting when they observe that their grandchildren are not being properly cared for. In some desperate cases the grandparents may even resort to court interventions and apply for legal custodianship of a neglected or abused grandchild.
The custodial instinct extends to great grandchildren. Even when parents and grandparents might not be able to provide materially for their offspring because of physical limitations or some other form of incapacity, their concerns and wishes pertaining to the welfare of their descendants burns eternal.
This inherent imperative runs across all cultures.
In some cases, the children will have been helping their hardworking parents to create and accumulate wealth, thus adding value to their endeavours.
"Misers aren't fun to live with, but they make great ancestors," David Brenner once stated. While this statement is humorous, it is pregnant with meaning. It references the reality of the struggles (trials and tribulations faced) which many successful wealth creators endure while foregoing many pleasurable indulgences.
The extent to which their energies seem wholly focussed on generating, investing and growing their wealth is remarkable. While their peers make merry, the so-called misers toil as they deny themselves indulgences which others (in their view) unnecessarily enjoy. Their peers may end up with little or nothing to show for their efforts.
Ultimately, all the blood, sweat and tears, all the industry, and sacrifices, through the years and in many cases over decades, come to fruition in the form of an accumulated estate. Then the primary creator of the accumulated wealth dies and the estate is to pass to the beneficiaries. This is when inheritance tax kicks in.
The question this raises which must be asked is: who is the victim of this pernicious tax?
Robbing Peter to pay Paul is what the inheritance tax does, though its advocates euphemistically refer to this process as the redistribution of wealth, with the aim of equalising incomes or reducing income inequality. This is so clearly morally groundless! "There is no moral argument that justifies using the coercive powers of government to force one person to bear the expense of taking care of another," writes economist Prof Walter E Williams.
Karl Marx saw taxation as the way to usher in socialism. "There is only one way to kill capitalism," he stated, "… by taxes, taxes and more taxes." Advocates of vindictive, punitive taxation (the capital gains tax which in reality penalises capital formation, is another such case among a plethora of others) are generally of socialist orientation. Marx must be laughing in his grave to observe what is happening now in South Africa, the USA, and many other countries as his views on taxation as an ideological weapon find traction among academics and politicians.
The warning in 1957 by Ayn Rand, the Russian-American philosopher, should be heeded: "When you see that trading is done, not by consent but by compulsion - When you see that in order to produce, you need to obtain permission from men who produce nothing - When you see money flowing to those who deal, not in goods, but in favours - When you see that men get richer by graft and pull than by work, and your laws don't protect you against them, but protect them against you - When you see corruption being rewarded and honesty becoming a self-sacrifice, you may know that your society is doomed."
It is unfortunate that many people do not engage or probe the motivations for proposed policies. They seem content with the rhetoric of good intentions uttered by populist, statist policymakers. In the final analysis, once the superficially altruistic veneer of the inheritance tax is removed, it is easy to see that the real motivation for it is envy, covetousness, and the sick retributive desire to punish the wealth-creators even as they are dead. This is equally morally outrageous! Quite clearly it is the deceased who are taxed. It beggars belief as to how anyone would even contemplate such a clearly punitive, necrophiliac tax.
Those countries that have already enacted an inheritance tax should have it abrogated while those that might be contemplating it must be aware that the vampires are at the gates.
The Afrikaans version of this article was first published in Rapport on 20 September 2020