Democracies shouldn't abolish death tax

I HAVE noted with interest mentions of estate duty, or 'death tax', in recent editions of The Straits Times. They have mostly been arguing in favour of abolition of these taxes and I would like to offer a different viewpoint, based on a more-democratic and less-capitalist stance.

One should keep in mind some things with respect to wealth. One is that while hard work is certainly a major factor in achieving wealth, it's not the only thing; personal or family connections, favourable government regulations and even luck play a part, especially at the highest levels of wealth.

It's very unlikely that a person with $5 million in assets is much different in intelligence, diligence and skill from a person with $500 million in assets.

And people at those levels of wealth (and greater) owe much to people much less fortunate than they, whether they realise it or not.

The second is that wealth begets wealth, and wealth also wields considerable power in determining the laws, and the very future, of a country.

It's a cycle that, once started, tends to concentrate power in a very few hands, hands that are not necessarily motivated to assist, or even concern themselves with, those less fortunate.

One very important function of government, at least in a democratic society, is to ensure that power is never concentrated in a small number of people, and that opportunity is equally available to all.

Democratic elections are not sufficient to ensure this, as wealth can strongly influence elections (in the United States, for example, elections are consistently won by the candidate who spends the most money on advertising).

Government needs to step in and redistribute wealth to ensure a reasonably level playing field, and to ensure that families are not able to create perpetuated dynasties that eventually prevent the normal democratic process from working.

Estate duty is a very important part of this redistribution of wealth, and helps ensure that a democratic society remains democratic, rather than being controlled by a handful of very wealthy families.

It is healthy and reasonable to debate at what level of wealth heavy estate duty should occur, but it's my opinion that it's hazardous to a democratic society to abolish estate duty. It serves an important role in the ecology of democracy.



Peter Duniho