To the average American, few topics are as confusing as discussions over the economic impact of taxes; even fewer are as distressing as death. No wonder, then, that in the recent presidential debates Texas Gov. George W. Bush used emotional appeals to argue against the estate tax. "It's a fairness issue," Bush said. "It's an issue of principle, not politics." To Bush's credit, the implementation of the estate tax is, at least in part, a fairness issue. But by appealing to emotion, Bush's statements ignore the more substantive issues surrounding the tax.

Just what does Bush find unfair about the estate tax? "I just don't think its fair to tax peoples assets twice," Bush said. But double taxation is not unprecedented. After all, the sales tax is also a second tax on your income, and it affects far more Americans than the estate tax does. In fact, the sales tax is a much more egregious case of double taxation, since the estate tax falls on a second person--the heir.

But Bush seems to have a more fundamental problem with the estate tax, a problem reflected in his use of the phrase "death tax." Implicit in this phrase is an argument most commonly made by one of the estate taxes most prominent opponents, Rep. Bill Archer (R-Tex.): "Death as an event should not be taxed."

The problem with this argument, and with the use of the phrase "death tax," is that the death tax doesn't tax death at all: it taxes inheritance. And inheritance, unlike death, is a transfer of wealth between two parties, placing it squarely within the class of taxable transactions.

In other words, there's nothing inherent about the estate tax that distinguishes it from any other tax--and in evaluating its merits, we should ask the same questions that we ask of all other taxes. First, does the tax raise the amount of money that the government needs? Second, does the tax minimize the financial loss and behavior distortion of individuals? And third, is the tax burden fairly distributed? The answer to the first question is an unqualified yes. As it is currently implemented, the estate tax earned $24.6 billion in fiscal year 2000--no trivial sum. Regarding the second question, for those Americans who pay the estate tax, the tax burden is not as serious as some of the rhetoric makes it out to be. It is assumed, after all, that inheritors do not rely upon the deaths of relatives and friends as their sole source of income. Even if they did, the first $650,000 of the estate is exempt from taxation--and by 2006 that figure will rise to $1 million.

The estate tax's opponents often claim that family farms and small businesses must be sold to pay the tax. But, like the impact of the tax burden, this problem is not as serious as it sounds. Only a small number of farms and businesses--less than one in 20--even meet the criteria needed to pay the estate tax, and among those who do a series of exceptions allow most of them to avoid paying a tax at all. For instance, owners of farms and small businesses have higher exemption levels, and for tax purposes they are allowed to value their assets at less than market value. And the few who have to pay the estate tax can choose to defer taxation and then spread their payments over several years, further reducing the tax burden.

The estate tax's critics also claim that the estate tax distorts behavior by reducing peoples incentives to work, save, and invest. Yet these arguments conveniently ignore the similar distortions of behavior in heirs who, for no effort on their part, receive a $650,000-plus inheritance. More importantly, however, current tax law allows wealthy Americans to lower their estate-tax burden by making charitable contributions. These are exactly the kind of distortions in behavior we need: in 1995, for example, Americans with taxable estates gave to charities about three-fourth of the amount they paid in estate taxes.

The only remaining argument against the estate tax, then, is fairness. From a progressive standpoint, few taxes are as fairly distributed as the estate tax: the revenue generated by the estate tax is twice the amount generated by the federal income taxes of the poorest half of all taxpayers. Furthermore, although only the wealthiest 1.4 percent of Americans pay the tax, the revenue is used for government programs and services that help all citizens.

Is this unfair to the wealthiest 1.4 percent? If the estate tax were the only tax on the books, then it would be unfair, just as having only a cigarette tax would be unfair to smokers. But the estate tax is only one part of a broader tax scheme, and it makes no sense to talk about the fairness of the estate tax in isolation.

The problem with repealing the estate tax is that such an act would make the overall system more unfair. If we don't need the $24.6 billion that the estate tax generates, there are better places to cut taxes--we could, for instance, drastically reduce taxes on the poor. And if we do need the revenue, then repealing the estate tax is unfair to the 98.6 percent of Americans who will have to pay the $24.6 billion that the top 1.4 percent save.

With all due respect to Governor Bush, not every tax relief benefits everybody. To think otherwise is to ignore the people he has promised to serve. And that's an issue of principle, not politics.

Steven C. Wu '02 is a social studies concentrator in Quincy House.