On August 25, the U.S marked the 100th anniversary of the National Park Service. In the words of historian Wallace Stegner, the parks are “the best idea we ever had. Absolutely American, absolutely democratic, they reflect us at our best rather than our worst.”
Several weeks after President Woodrow Wilson penned the act creating national parks, he signed America’s second best idea into law, the federal estate tax, our nation’s only levy on the inherited wealth of multi-millionaires and billionaires.
Like the park system, the estate tax is a fundamentally American notion, an absolutely democratic intervention against a drift toward plutocracy and extreme wealth imbalances. Taxing inheritances set the U.S. apart from the monarchies and wealth dynasties of Europe.
A century ago, we were living a Gilded Age of ostentatious wealth and dizzying inequality. Before the Forbes 400, there was the First Four Hundred, the coveted list invited to New York socialite Caroline Astor’s annual cotillion ball.
It was “wealth against commonwealth,” as muckraker Henry Demarest Lloyd described it. Louis Brandeis, who later became a Supreme Court justice, presciently observed, “We can have concentrated wealth in the hands of a few or we can have democracy. But we cannot have both.”
The impetus for the estate tax was the threat that concentrated wealth and political power posed to our nation’s fragile experiment in self-governing democracy. And the movement pressing to tax inherited wealth ranged from rural populist farmers and urban reformers to enlightened industrialists and President Theodore Roosevelt. On estate taxation, Andrew Carnegie wrote in his essay Wealth, “Of all forms of taxation, this seems the wisest.”
Read the full article at US News and World Report.