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Cutting Taxes Is Selfish

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Washington is a land of grand farce. People here routinely say things that no one believes, not even the person saying it. They do things they know are absurd. They can’t help it. To stop is to confess what cannot be confessed: that the political enterprise is just a big con game.

A classic example of what I mean took place a few months ago. There is talk in Washington of cutting the estate tax, which is more aptly dubbed the “death tax.” Congressional Republicans are pushing the idea, and President Clinton has expressed some interest. But Deputy Treasury Secretary Lawrence Summers criticized people who want to cut the tax. What he said was, “When it comes to [cutting] the estate tax, there is no case other than selfishness.”

Ouch! The S-word! The Republicans couldn’t let that stand, and they quickly responded. House Speaker Newt Gingrich said Mr. Summers “owes every American taxpayer an explanation for his unfair and irrational accusation that Republican efforts to cut taxes are motivated by selfishness.”

Rep. John A. Boehner of Ohio, chairman of the House Republican Conference, said the remark illustrates “the arrogance of the liberal elite, who believe that government has some right to redistribute the fruits of a life’s work.”

“It sounds like a comment that people who believe in socialism would make,” said House Ways and Means Chairman Bill Archer.

The business community also waxed indignant. The vice president of the National Federation of Independent Business, Dan Danner, said:

“We think it’s pretty horrible when they imply that thousands of small business owners who just want to pass their business to their children are selfish. It certainly leaves us with serious concern that they don’t understand the job-creating role that small business plays in America and in the economy.”

U.S. Chamber of Commerce chief economist Martin Regalia said:

“There is a chance this year of creating a bipartisan approach to cutting taxes and balancing the budget. Instead, the administration comes out and throws bombs at the whole idea. Their response to everything is that it only helps the rich.”

The charge of selfishness is so serious that, a day later, Mr. Summers actually apologized. “I should not have used the term ‘selfishness’ to characterize positions in the debate over estate taxes,” he said. “There is room for honest disagreement on this issue. It is wrong to question the motives of others in policy and policy debates,” he said.

When White House spokesman Michael D. McCurry was asked whether he agreed with Mr. Summers’s original remark, he said, “Clearly not.”

Could a farce be more transparent? One gets the impression these are actors reading from a script. It is so predictable. Do Republicans and business lobbies really believe that reality is a malleable goo and that if they just refuse to pronounce the words, the facts will go away?

Lawrence Summers was basically right. Can we really take any Republican or businessman seriously who disputed him? Can we believe that Mr. Summers is sincerely regretful he said it? No one inside the Beltway takes any of this seriously. Neither should you.

Where Mr. Summers erred was in thinking there is something wrong with people wanting to keep their own money for personal “selfish” reasons. Need I say this? There is nothing wrong with that!

True, taxes hurt the economy. Therefore, when people keep their own money, it is good for everyone. But people like their taxes cut, first and foremost, because they want to control more of their own lives and belongings — even when their lives are nearing an end. And it is not any less “selfish” to want to hand a legacy to one’s children. What could be more “selfish” at the end of your life than to give your own children financial security while knowing that your life’s work will live on? (Richard Dawkins’s book The Selfish Gene comes to mind here.) Would you like to die knowing that your children will have to liquidate your achievement to feed the ravenous state?

In the private recesses of his own mind, every person knows why he and everyone else want to keep their money. But people haven’t yet acknowledged that there is no sin in that. The self is the thing in you that chooses and acts. It is you. That makes it the very fount of virtue. Let’s stop apologizing.

The sanctimony of the GOP and business lobbies is shameful. Chairman Archer says only a socialist would condemn tax cutting as selfish. Excuse me, Mr. Chairman, but socialism is the political system that outlaws self-interest. To frantically deny that someone wants a tax cut because of self-interest is to accord legitimacy to socialism. Ayn Rand used to say that in any argument, the more consistent of the adversaries will win. If you share socialism’s premises while trying to oppose socialism, you will lose.

Apparently it’s okay for the nonrich to be “selfish.” If you propose a tax cut for them, you don’t have to justify it in the name of the social good. The “rich” don’t have the same right. I use quotation marks because your definition of “rich” will differ markedly from the government’s definition. Henry J. Aaron, a well-respected economist at the Brookings Institution, made this clear in an article defending the estate tax entitled “Now’s Hardly the Time to Favor the Richest Among Us.” (As though there is ever such a time.) Mr. Aaron bemoans the growing gap between rich and poor and cannot understand why anyone is talking about cutting that tax. (The gap nonsense always neglects a critical fact — mobility through income levels.) Fewer than 2 percent of dying Americans will have their estates taxed, he writes. An estate has to be larger than $600,000. (That doesn’t buy what it used to buy.) People can get around the tax by giving money away before the die.

Let’s accept all this as true. So what? Part of the “American ethos,” Mr. Aaron says, is that while people should be encouraged to work hard and save, they should be limited in how much “privilege” they can give to their progeny. That should be done, he adds, out of the “traditional American concern about undue concentration of economic or political power.” So there it is. People who manage to create and accumulate more wealth than most are a threat. To whom? Well, that’s never made too clear.

The entire case against the accumulation of wealth rests on an equivocal use of the word “power.” Note that Mr. Aaron refers to “economic or political power,” as though they are similar. But those two concepts should not share the genus “power.” They are entirely different things. Political power is the barrel of a gun — the threat of force. Economic power is the barrel of a pen — the offer of value. Ironically, to diminish economic “power,” we must expand political power. (Franz Oppenheimer and Albert Jay Nock long ago wrote of the tradeoff between social power and political power.) It is a bad bargain.

It is embarrassing to have to remind people of this in the United States of America. In the Declaration of Independence, Thomas Jefferson singled out three natural rights — life, liberty, and the pursuit of happiness. The last phrase, appearing instead of “property,” has prompted much discussion. I can’t tell you what Jefferson was thinking. But here’s a plausible theory: Property is already implicit in life and liberty. If you own your life and are free, you may use your belongings as you see fit. By specifying the pursuit of happiness, Jefferson might have been pointing out that the blessings of life and liberty need not be justified through selfless service. One’s life and happiness on earth are justification enough.

Rand once wrote that when Republicans and conservatives — the putative friends of capitalism — defend liberty on the basis of self-sacrifice, they have surrendered to its avowed enemies and are merely suing for peace. With friends like that, does liberty need enemies?

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    Sheldon Richman is vice president of The Future of Freedom Foundation and editor of FFF's monthly journal, Future of Freedom. For 15 years he was editor of The Freeman, published by the Foundation for Economic Education in Irvington, New York. He is the author of FFF's award-winning book Separating School & State: How to Liberate America's Families; Your Money or Your Life: Why We Must Abolish the Income Tax; and Tethered Citizens: Time to Repeal the Welfare State. Calling for the abolition, not the reform, of public schooling. Separating School & State has become a landmark book in both libertarian and educational circles. In his column in the Financial Times, Michael Prowse wrote: "I recommend a subversive tract, Separating School & State by Sheldon Richman of the Cato Institute, a Washington think tank... . I also think that Mr. Richman is right to fear that state education undermines personal responsibility..." Sheldon's articles on economic policy, education, civil liberties, American history, foreign policy, and the Middle East have appeared in the Washington Post, Wall Street Journal, American Scholar, Chicago Tribune, USA Today, Washington Times, The American Conservative, Insight, Cato Policy Report, Journal of Economic Development, The Freeman, The World & I, Reason, Washington Report on Middle East Affairs, Middle East Policy, Liberty magazine, and other publications. He is a contributor to the The Concise Encyclopedia of Economics. A former newspaper reporter and senior editor at the Cato Institute and the Institute for Humane Studies, Sheldon is a graduate of Temple University in Philadelphia. He blogs at Free Association. Send him e-mail.