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08/31/2005: "Finally, the Return of The Duke of Earl; And a Karl Rove Reprise"

Sadly, the United States Constitution prevents the United States from granting any Title of Nobility. And for those clever folks out there who think – "That's okay – State's Rights!" I've more bad news: the Constitution also prevents any State from issuing Titles of Nobility.

And yet, don't we all yearn for true nobility? Watching the Queen wave gracefully to the crowd, her Corgi in her arms. Watching the beautiful Princess Diana as she made us think that fairy-tales really can come true. Bowing down before royalty while we bask in the glow of the royal smile. Reading about the stately Prince Charles and his less-than-stately affair. And of course, calling our local stores to see if they have Prince Albert in a can. "Well if you do, let him out! nyuck nyuck nyuck!" (Wait, no, that was from my childhood of what then passed as juvenile delinquency.)

Not much later than my childhood, in the 1960's, drunk on beer, friends and I sang along with Gene Chandler as he sang the Duke of Earl:

Duke, Duke, Duke, Duke of Earl
Duke, Duke, Duke of Earl
Duke, Duke, Duke of Earl
Duke, Duke, Duke of Earl

Duke, Duke, Duke, Duke of Earl
Duke, Duke, Duke of Earl
Duke, Duke, Duke of Earl
Duke, Duke, Duke of Earl

Funny, the words seemed a whole lot more meaningful back then. But surely in their determined, hopeful repetition ("Duke, Duke, Duke, Duke of Earl, Duke, Duke ….), it was a calling-out by an angst-ridden nation of the deep yearning for a higher power here on earth to whom to look up from our grim hopeless lives, from the daily grit of our everyday grind, to see them walk, clad in ermine and lace, sporting emeralds and pearls (and maybe, for the youngish female ones, sporting a little bit of cleavage), high above our common lives, their lives writ large before us.

So if you, like me, are jealous of England for it's royalty, then cheer up. I have good news.

Drunk on money instead of beer, we are bringing back the Duke. Not the Duke of Earl, but almost-real Dukes this time. And not just Dukes, but Earls too! And Counts, Barons, Viscounts, Earls, and Sultans. Remember the Marquis de Sade? We'll get more "noblemen" of his ilk too. Well, noblemen of a sort.

Because of the namby-pamby Founding Fathers, we can't have the traditional, European-style titles of nobility for which we all yearn. So we can't use those actual names. But constitutional prohibitions notwithstanding, the Senate is poised to join the House of Representatives in voting to give us the modern-day equivalent, by eliminating the Estate Tax.

I was taught in law school that the purpose of the federal Estate Tax is not so much to bring in money, as it is to prevent the accumulation of vast fortunes which are passed on from generation to generation, creating a moneyed class that has all the trappings of nobility except for the titles themselves.

Even today, no one pays Federal estate tax if their taxable estate is less than $1,500,000. And for married couples, any competent estate planner can ensure than $3,000,000 passes free of any federal estate tax. Where I come from, $3,000,000 is serious money. But in 2006, the estate-tax credit goes from $1,500,000 to $2,000,000, meaning that married couples can ensure that taxable estates of $4,000,000 are totally free of estate tax. And finally, in 2009, the estate-tax credit is going up to $3,500,000, meaning that for married couples, a total of $7,000,000 can be protected, totally free of estate tax.

This isn't enough for the House and Senate, who want to repeal the Estate Tax entirely.

The Seattle Times characterizes the battle as being between "the very rich and the merely rich." [Rich battling over estate tax, Sunday, August 14, 2005, page A10.] It said in that article that "Small-business owners – the merely rich – want to exempt from taxation inheritances of up to $10 million. The very rich – people whose estates are worth tens of millions to even billions of dollars – want instead to reduce the tax rate on assets passed on at death. A $10 million exemption isn't nearly enough for them."

The Seattle Times article points to what has been a focal point of the debate: that a sharp reduction in the estate tax would deprive the federal government of tens of billions of tax dollars each year. The New York Times reports the amount, once the estate-tax is fully repealed, to be "$70 billion a year in today's dollars. Over the first ten years of full repeal, the cost would total more than $700 billion, plus interest. Assuming that the government is still running an annual deficit in 2011, which is more likely than not, the total ten-year cost would be close to $1 trillion." ("Death Tax? Double Tax? For Most, It's No Tax, nytimes.com, 8/14/2005.)

Wait a minute. $70 billion in one year? $1 trillion over ten years? Can the federal government afford to give tens of billions of dollars a year to the rich, at a time of steep federal budget deficits?

Should the federal government return $70 billion a year to the rich, when social programs are starving for money?

Those are policy questions, but they are distinct from what I understand to be the policy basis behind the federal Estate Tax: to prevent the formation of a moneyed elite, a ruling class. But that argument is not even being raised in the debate.

What is likely to happen? I'd go with the prognostication of the Seattle Times, which opined that "Thanks in part to lobbying by the heirs of Wal-Mart stores, Mars candies and Campbell soup, the estate tax is close to becoming extinct."

In Alice in Wonderland, the Duchess gave Alice a baby to hold, but the baby turned into a pig. That is a fitting analogy for a proposal that the rich cherish as though it was their own child. And that they want middle-class taxpayers (not just Alice, but every taxpayer Tom, Dick and Harry) to cherish it as though it were their own. But taxpayers beware: when you look down at the child you'll be holding in your arms, you'll see instead, pig-like, the beady eyes of next generation of American aristocracy.

You don't have to be a Democrat to defend the Estate Tax, any more than you need to be a Republican to attack it. To defend the Estate Tax, all you need to have (if you are looking at this issue solely from its financial effect on you personally) is an estate between you and your spouse that is below $4,000,000, which would mean that starting next year, with competent estate planning when you and your spouse have both passed on, neither of your estates would have paid an Estate-Tax dime to the feds.

Don't actually like the thought of a permanent moneyed elite, created by the elimination of the Estate Tax? Tell your Congressmen and Senators that. And tell your friends and family, here and in other states, to tell theirs. Time is short: the Senate is expected to vote on this within the next few weeks.

PS: a Reprise Regarding Karl Rove: In an article a few weeks ago, I was very critical of Karl Rove. You also may have read a few letters critical of me for my criticism (as well as another letter which supported my position). For those interested in the subject, read the recent article by the Los Angeles Times and duplicated on Yahoo, called A CIA cover blown; a White House exposed , or use advanced search on Yahoo, looking for it on August 25th, on Yahoo, with the key words "Karl Rove."