The Founders' Vision and the Estate Tax

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estate tax, tax law, constitutional law, Founding Fathers


This article relies upon the views of leading members of the Founding generation to support the proposition that contemporary proposals to eliminate estate and gift taxes are unconstitutional. First of all, the Framers did not limit their analysis of "constitutionality" to Supreme Court opinions. They believed that elected politicians and the body politic also resolved important constitutional disputes. The public's refusal to support the Republican Party's effort to impeach President Clinton is a recent example of a major constitutional controversy's being resolved outside the courtroom. More particularly, the Founders frequently employed the Aristotelean definition of "constitution" as the actual distribution of wealthand power (not just the formal distribution of public power). Many Americans of that era were wary of luxury and concentrated wealth. The taxation power was a major part of their analysis. The leading members of that generation agreed with Adam Smith that proportional taxation was permissible, even desirable. Thomas Jefferson thought the silent tool of progressive taxation would stabilize the republic by preventing the wealthy from becoming a tyrannical aristocracy. Jefferson and Madison led the movement to eliminate primogeniture and entail, because those two doctrines of wealth transfer at death kept property in too few hands. Madison, however, foresaw that these reforms, combined with widespread education and protection from religious persecution,would not maintain a "happy mediocrity." Commerce and manufacturing were creating new forms of wealth that would not be affected by Jefferson's agrarian policies. Once the frontier disappeared, the poor would flock to corrupt cities where they would be manipulated by wealthy demagogues. Overall, this intellectual history supports the constitutional argument that we should not abolish estate and gift taxes because huge wealth transfers create many "haughty hiers" who will have the undesirable, dangerous traits of decadence and overweening ambition that accompany any hereditary aristocracy. Quite simply, the allocation of money and influence, a process invariably influenced by tax policy, is the most important constitutional issue of our time. While some may argue that conceptions of constitutionality should be limited to Supreme Court jurisprudence, this article replies that constitutionalizing these issues puts them in a richer historical context and dramatizes how central they are to the well-being of the republic.