Re: Constitutional Limits on Tax Levels [was: Statistics]

[Cornell Clayton]

I certainly don't assume that those who are wealthy did nothing to merit their wealth (in fact, I am in favor of institutions that would falsify such stereotypes by prohibiting dissolute heirs).  I simply believe that that is irrelevant to the question of whether others are entitled to their wealth or whether they are entitled to dispose of their wealth in any way they chose. 

First, I'm not sure that an estate tax encounters any legitimate property right at all.  The "natural heirs" certainly have to "right" to inherit (as we recognize that one may justly chose to give their wealth to someone else), and the idea that an individual may exercise a constitutional right to unrestricted giving (even if we thought one existed) from beyond the grave certainly raises all sorts of sticky problems -- not dissimilar to the problems Justice Blackmun mentioned in Roe when he refused to recognize rights in the unborn.  To be honest, I haven't thought enough about this latter claim to know what to make of it yet.

Regardless, the theoretical objection to an unrestricted "right to give" wealth becomes evident if we rephrase the question from "can parents pass on wealth to their children" to should we have a right to transfer wealth to whom ever, and under what ever circumstances, we chose?  After all, why does it matter who the wealth is being transferred to?  I assume that those who might argue for a right to unrestricted transfers of wealth to relatives would also argue for the same right to unrestricted transfers to a close friend or someone else one chooses, right?  But when we consider the question at this more general level, it is clear why we reject such a right.  We restrict transfers of wealth in all sorts of ways, usually to protect principles of equality or the rights of others to equal opportunity and fairness -- consider antitrust laws as just one example.

IMHO, our preference for a system that recognizes inheritance of wealth rests simply on cultural traditions and an unexamined assumption that such a right is "natural."  But there are good reasons why natural justice theories were thoroughly discredited as a constitutional theory for a pluralist democracy like the US (remember not even Clarence Thomas wanted to be tagged with that label!).  Quite apart from the naturalistic fallicy (the is/ought problem identified by Lynn Henderson), its not so long ago that people seriously argued that some races, some sexes, some classes, were "naturally" (genetically, divinely chosen, take your pick) superior to, or more entitled than, others.  Bentham was certainly right when he said the idea of 'natural morality is nonsense, and the idea of natural rights is nonsense on stilts.'

Cheers,
CWC

At 03:16 PM 5/30/03 -0500, you wrote:
>Ok, I'm a little confused about the constitutionality of a confiscatory
>estate tax issue.� Here's what I think I understand:
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>First, it seems that the relevant property right is that of the parent, not
>the child.� A confiscatory estate tax would not seem to "take" that
>property, instead it simply prohibits passing the property on at death.
>The parent would still be free to dispose of his or her property as wished
>until the time of death but denied the opportunity to pass it on then.� For
>this to be a taking, you would have to hold that the ability to pass your
>property on at death was an essential part of the bundle of property
>rights, which would seem difficult to argue if you were entirely free up to
>that point.
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>If combined with a confiscatory gift tax, though, this would not be the
>case.� Then, the restriction would be on any disposal of property to others
>(though it could be freely spent by the parent).� Denial of your ability to
>make gifts does not destroy the entire property interest but does seem like
>a pretty big restriction on your bundle of property rights.� But suppose
>the gift tax doesn't apply to all gifts, e.g., charitable donations are
>exempt, but only those to your children.� Now, the question would seem to
>be:� Is the ability to give property to your children (before or after your
>death) an essential component of your right in property, given the other
>uses of your property?
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>Is this correct?
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>Frank Cross
>Herbert D. Kelleher Centennial Professor of Business Law
>CBA 5.202
>University of Texas at Austin
>Austin, TX 78712
>