One thing the tax cut deal between Obama and the Republican Congressional leadership has done is bring the estate tax back into the news. They propose a permanent resolution (35 percent tax rate on wealth over $5 million) in lieu of jumping back on New Year's Day to pre-2001 law that no one really expects to last longer than legislative deadlock dictates. I had been starting to wonder if this would just keep hanging over everyone.
Just because the estate tax is now back in the news, the anti-"death tax" jeremiads have now resumed (or at least intensified) on the Wall Street Journal's editorial pages. Now, I am far from hard-core on this issue. At a minimum, in a revenue-neutral and distribution-neutral framework, I would probably want the estate tax to be more in the range of the tax cut deal than of 2000 law. Concerns both about the estate tax's effects on work, saving, and altruistic transfers (in lieu of simply consuming the money before one dies), and about its susceptibility to various tax planning devices, persuade me that the rate probably shouldn't be very high - again, especially if one can use other instruments instead to address revenue and distributional goals.
But my point here is perhaps more trivial. Whatever one's bottom line, I find the use of the term "death tax" to be offensively dishonest. First of all, the tax is not levied with respect to death itself - the tax base is indeed the decedent's estate. Second, the old term had been accepted and standard for decades if not centuries. The "death tax" brigade tried changing it because Frank Luntz determined from focus group interviews that this was a good political move. We start losing a common language, and moving into the linguistic world of 1984 where "Freedom Is Slavery," if Frank Luntz can use focus groups to change it. (Nothing personal, Frank - you have a job to do and you do it skillfully; it's just that others shouldn't go along with it.)
It was thus with some relief that I found that WSJ reporters on the news pages, or at any rate Martin Vaughan today, are still using the correct term "estate tax" instead of succumbing to the right wing version of linguistic PC.
I just hope I haven't sold him out here by mentioning this.