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Death by a Thousand Cuts: The Fight over Taxing Inherited Wealth
written by Michael J. Graetz, Ian Shapiro
Studio : Princeton University Press
by Princeton University Press
Publisher : Princeton University Press
Released : 2006-07-24
Availability : Usually ships in 1-2 business days
Number of Items : 1
EAN : 9780691127897
Avg. Customer Rating: (based on 12 reviews)
List Price : $20.95
Our Price : $9.85
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Product Description |
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This fast-paced book by Yale professors Michael Graetz and Ian Shapiro unravels the following mystery: How is it that the estate tax, which has been on the books continuously since 1916 and is paid by only the wealthiest two percent of Americans, was repealed in 2001 with broad bipartisan support? The mystery is all the more striking because the repeal was not done in the dead of night, like a congressional pay raise. It came at the end of a multiyear populist campaign launched by a few individuals, and was heralded by its supporters as a signal achievement for Americans who are committed to the work ethic and the American Dream. Graetz and Shapiro conducted wide-ranging interviews with the relevant players: members of congress, senators, staffers from the key committees and the Bush White House, civil servants, think tank and interest group representatives, and many others. The result is a unique portrait of American politics as viewed through the lens of the death tax repeal saga. Graetz and Shapiro brilliantly illuminate the repeal campaign's many fascinating and unexpected turns--particularly the odd end result whereby the repeal is slated to self-destruct a decade after its passage. They show that the stakes in this fight are exceedingly high; the very survival of the long standing American consensus on progressive taxation is being threatened. Graetz and Shapiro's rich narrative reads more like a political drama than a conventional work of scholarship. Yet every page is suffused by their intimate knowledge of the history of the tax code, the transformation of American conservatism over the past three decades, and the wider political implications of battles over tax policy. |
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Explains what happened & why |
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As its subtitle indicates, the book is about the nitty-gritty details of how the near-repeal of the estate tax got enacted into law. The authors discuss tax policy only tangentially: their focus is on who did what and why. Some actors on both sides acted out of idealistic (or, if you prefer, ideological) motives, many out of self-interested motives. According to the book, the pro-repeal forces were shrewd and far-sighted, whereas the anti-repeal forces were slow and weak. For example, charities have a strong interest in preservation of the estate tax, but were not effective in opposition to repeal, because they did not want to offend their donors and boards of directors. Having finished the book, I now believe I understand what happened. I even understand why the estate tax dies in 2010 and then springs back to life in 2011, a situation that seems insane, but which is a perfectly logical consequence of arcane Senate procedural rules interacting with the fact that the pro-repeal forces had no hope of mustering 60 votes in the Senate. |
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Some useful information |
Michael Graetz and Ian Shapiro successfully explain the history of the estate tax, the lobbying battles over it, and the shift from consensus to its repeal in their book Death by a Thousand Cuts. By investigating a range of opinions from Congressmen to farmers, the authors effectively portray how the pro-estate tax side underestimated the ability of organization, group affiliation, and passion to bring about the repeal of a tax that had been accepted without contest for generations. The authors criticize the efforts of large groups and Democratic congressman to organize against the repeal - by illuminating the fact that there was too little organization. While the book provides an accurate and thorough account of the lobbying process that helped lead to the repeal of the estate tax, it provides much unnecessary detail and is obvious in its bias against the repeal of the tax.
For readers who are uneducated in the history of opinions on taxes, Graetz and Shapiro thoroughly describe the evolution of progressive taxation. While not clearly defined in the book, progressive taxation can be explained as a tax that increases as a person's income increases. They describe the shift of opinion on the estate tax when the Republicans made estate tax reform part of their "Contract with America." (Graetz and Shapiro, 15) By using rhetorical frames and spins, pro-repeal groups were able to effectively present the estate tax not as a tax only affecting 2.4% of the wealthy, but as a "death" tax that could potentially "punish" family businesses and farmers by double-taxing their hard earned money. In other words, the authors show how the pro-repealists were successful in presenting the tax in a way that best supported their cause. The authors do a good job showing how much influence organized interest groups can have on government decisions. While the repeal of the estate tax might not necessarily have been a practical crusade, it was a passionate one that eventually won out against the greater good of society and economy, in the opinion of the authors. By putting direct pressure on members of the legislature, pro-repeal groups built a coalition including large numbers of business owners, gays, and the working class, thus encouraging politicians that it would be beneficial to represent and support their cause. With a few wealthy elites being represented by large groups of non-estate tax payers, effective lobbying became the force behind the tax repeal. While the estate tax may have actually benefited some people who worked for its repeal, a pluralistic system prevailed and ended up benefiting the few elites who represented only a fraction of the masses. For an ordinary reader or college student who is unaware of how effective lobbying can be in enhancing American democracy, the authors do a great job portraying the process.
The authors also do a good job providing simple facts on the tax, such as its ability to tax the deceased estate up to 55% and the subsequent $24 billion in government revenue. While they covered some of the services and people who benefit from the tax, they could have been more specific in displaying the direct economic benefits of keeping the estate tax around. If the authors favor the tax, which seems to be the bias throughout the book, why do they not put more effort into displaying its benefits? Despite this lack of information, the authors do a good job explaining the basic components of the tax for readers unknowledgeable on the subject.
When writing about such a widely debated topic, the authors would have benefited by being more cautious in displaying their bias towards keeping the tax around. It tends to distract from their entire argument. From the very beginning, they describe the pro-repeal group's goals as being ones of "conviction and anger" in place of "practicality" (Graetz and Shapiro, 23). While this might be true, blatantly stating their bias against the pro-repeal argument is a good way of losing the reader's trust. Instead of making readers cope with the bias, the author's argument would have been stronger if they would have merely shown the impracticality of the pro-repealists.
The authors also include much un-needed information in the book that tends to get repetitive and boring. Describing all characters by their eye color or ability to cook tends to lose its appeal by the sixteenth chapter when the authors describe Bob Johnson and the paintings covering his walls and his casual way of dressing in black pants and a black polo sweater. Is all this information necessary?
Overall, the book provides good background details on the estate tax and displays the ability of interest groups to change the American government. Graetz and Shapiro successfully provide readers with an educating, enjoyable read that was easy to follow and understand. While it could have been improved by eliminating the obvious bias and the un-needed details, it provides a good look at American government and the power of group affiliation in reaching a goal - whether practical or not.
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Disappointing but useful |
This book was written by two distinguished experts on tax policy and reviews the development of the campaign to end estate taxes at the federal level. In many cases it is quite informative. But compared to Jeffrey Birnbaum's book on the development of tax policy in Congress (Showdown at Guccci Gulch) is it quite light in a couple of areas.
The book begins with three questions - fundamentally, how did the coalition that formed get together, how did the repeal coalition successfully resist amendments, and finally how did an item like this (seemingly without a high level of support and which cost a lot of revenue and only affects a small number of people) not cause more generalized opposition to the Bush tax bill?
The book is excellent in some of its history (especially the chapter about the use of science in public policy) but is weaker in telling the story of how the current provision was adopted in a consistent manner. The description of the initial phases of the development of the coalition is pretty detailed. The coalition brought together some seemingly disparate interests.
Where the book falls down is in two areas. First, there are some amazing omissions in this book. Bill Gates' father was indeed a leader of the opposition - but at no place in the book does the narrative explain that Gates' father was an attorney who helped to structure estates and thus had a direct interest in the continuation of the tax. At the same time the authors keep coming back to themes - for example, a minor figure in the fight (farm owner Chester Thigpen) is highlighted more heavily than a key Senator like Max Baucus. I would also have liked to have these policy wonks think creatively about the elements of the estate tax which opponents might go forward with - when the inevitable fights come in the future. The opponents of repeal were inept - but how do they go forward? The last time the estate tax was eliminated (surprisingly not mentioned in the book) was in the 1954 revision - the problems which brought the tax back should be instructive to opponents of repeal.
The second area is the authors' limited understanding of how coalitions are built. This book should be more about the politics of the process. The concluding chapter decries the mix of research, politics and moral issues in the current political environment. Indeed, as one who writes about tax issues often, better research involvement could help the process. But the realities of politics that mix moral/philosophical issues and coalitions and evidence are what we should be thinking about.
So if you are interested in tax policy, this is a good book. But if you want to understand how tax policy is made in the real world - there are better books. |
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Too partisan to prove useful |
As a tax attorney, I was excited to purchase this book and get a non-partisan, in-depth look at what was going on with respect to the estate tax. Michael Graetz has a stellar reputation as a law professor, so I was doubly excited.
I was very disappointed that the book's political bias appears on virtually every page. I think reasonable people can disagree on whether we should have an estate tax, but Graetz presents each and every proponent of repeal as a self-interested opportunist. I would have liked to have seen an unbiased account of what "really" goes on in Washington, but this book failed to satisfy.
If you're looking for a book that will confirm your love for the estate tax, and need a reason to pat yourself on the back, this is the book for you. If you are looking for a book that gives you an unbiased account of the world of politics, this book isn't for you. I found Showdown at Gucci Gulch much more interesting. |
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Who knew? |
My grandfather was born in the rural South in 1885. With little help from family and no help from his government, he put himself through college. He married, became a dairy farmer and sired seven children which he brought up and thoroughly educated (all seven went to college)during the Great Depression. Of those seven children, his four sons all became his working partners and one son lived and raised his own family on the family farm.
My grandfather worked HARD, all of his life, to buy and build up a large and prosperous farm. He had 21 grandchildren and numerous great-grandchildren. One grandson was born with Down's Syndrome and will need costly, special care as he grows older. As an intelligent and well educated man, it is interesting to note that Grandfather started out his adult life as an ardent, LOYAL (his word) Democrat, serving in county politics as a Democrat. Toward the end of his life he switched to the Republican party where most of his progeny now reside.
When this fine, decent man died at the age of 99, his family was death taxed at the exact same rate as Bill Gates, the Kennedys, Steven Spielberg, Warren Buffett, and every other billionaire roaming around today espousing the fine merits of the death tax.
This is the paradox surrounding those Liberals who defend the death tax: family farms ARE being shut down, cut up and sold to pay the death tax. In turn, those family farms are being bought up by developers who are then doing what the Liberal establishment deems so evil: destroying wetlands and natural habitats for wildlife, wreaking havoc with vast tracts of woodlands thus creating increased sprawl or, in John Denver's famous words "more scars upon the land".
All of this because of the supposedly egalitarian notion that the death tax is a well deserved tax for the super rich.
The only thing I have to say about the death tax is this: if we children, grandchildren and great-grandchildren had wanted to sell half of the family farm (which we did NOT wish to do), we would have preferred to have been able to do so and then actually KEEP the proceeds of the sale rather than turn those proceeds over to the federal government. |
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