Thursday, June 08, 2006


Reparations and the Death Tax

I was watching the first season of the unique documentary of African American culture know as the Chappelle Show last night, and came across the Reparations episode. In this episode, he foresaw a change in wealth status of many individuals and changes in consumer behavior. It is quite an interesting interpretation and it spurred me to think about the idea of reparations a little bit of more.

Reparations are meant to "right" the wrong for past crimes. They are an intergenerational wealth transfer from future generations to the current generation for past wrong. It is kind of confusing really. Why should future citizens pay for our current political opinions and agendas? The same should be said for our current tax breaks and the excessive largess of modern America. From a policy stand point, I am opposed to the use of reparations for a number of reasons. First, they will only serve to make future individuals, who had no part in the crime, worse off. How long is a "society" guilty for its actions? How many generations back should we go?

The second reason that I disapprove is because it will simply turn into a welfare program. It will be a simple transfer of wealth, i.e. votes for cash to whichever party is the most generous. It could never be a one time pay-out. Moreover, who says that our current generation of African Americans are the most “deserving” of these reparations? Should the past generation have received it? What about the next generations?

Not only is it not appropriate to hand out money to just one generation, but it can't possibly right the wrongs of past crimes with a cash settlement involving none of the aggressors.

After wanting to go over reparations this morning, I came across this WSJ article about the Death Tax. It appears to be much the same issue. The Death Tax is in place to limit one type (heredity) of intergenerational wealth transfer. As the WSJ article points out, it is the people that can shelter their funds that are actually in support of the maintaining the tax, along with the Insurance companies. Here's an interesting question, should we support the death tax, if we think that intergenerational wealth transfers are appropriate? Forget about it as a tax or as a coercive instrument, but rather as a theoretical construct.

The main "concern" or problem with intergenerational wealth transfers, by the Left is that it creates an uneven playing field or that it maintains inequality. This is problematic because it is based on an unrealistic world view. Taking that to its logical conclusion, we would all end up being Harrison Bergeron.

The Right tends to oppose it because it is a tax. They see it as a coercive instrument that creates additional disincentives for thrift and savings with in a family unit. Although few actually pay the tax, it does appear to hit the middle class and first-generation entrepreneur hardest.

Should we oppose all types of wealth transfers to be consistent, or should the appropriate action be to oppose only those involving coercion?

Are you sure this will be a wealth transfer from the future generation to the present one? I'm not so sure.

This is only transfering wealth from one group of people in the present to another group of people in the present. These new holders of that wealth can just as easily save it and pass it on to the next generation as the former holders of that wealth. I don't see any reason why absolute wealth in the future should neccesarilly change as a result of redistribution.

In terms of the moral argument, why is it just for some people to benefit from historical crimes? Is it because the "relevant" parties are dead? Would we say the same thing if removed the blinders of history and use a recent example?

Suppose Nick Cotton the crook steals thousands of dollars from his neighbor Mark. We would both say Mark deserves his nmoney back based on our moral intutions. What if Nick gives the money to his son Ashley? Wouldn't we both still agree Mark deserves his money back?

What if Mark dies the next week? Does his family deserve the money? What if Nick then dies the next, but Ashley still keeps the money? Is that JUST?

Your argument seems to implay that Mark's family doesn't deserve any money back in either scenerior. But that doesn't sit right with me or the courts, I imagine. So, it must be the fact that "it's been so long". Well, how much time must pass for it to be okay to benefit off the crimes of others?

Now, it may be impractical for us to rectify the damage of slavery today, but this is a moral question and not bound by practical constraints.
That was my point. What length of time makes it inappropriate for this transfer? If it were real individuals in the present this would be simplified. Since it is not, and we are talking about a great deal of time between the crime and the "righting of wrongs", it is much more difficult. An additional difficulty arises out of making all present and likely future individuals liable for the actions of a few, more than 150 years ago.

This also puts the term "society" into question. How are we connected exactly? Are we all just a group of people owned by society or are we independent or autonomous in any way, and therefore not linked directly to the crimes of others in society?

I don't really see how it could not influence future groups. If it was any bit a substantial amount of money, then how could it not be deferred and paid over some years time. The current expenditures of our welfare system will already be paid by our children and ourselves (the younger people), how could an additional wealth transfer not be treated the same way?

In theory it could be a one time deal, but it seems like it would be too popular to simply stop.
There is also a problem in the paying out of these funds. Are people deserving because of the color of their skin or because of their lineage?

Should the families of slaveholders directly pay the families of slaves? That would seem more appropriate, but still rather problematic. Should I be liable for a crime that my great grandparents could have committed?
Well, I'm certain it will impact particular groups, but I'm still not sure I could see it as a wealth transfer from future generations to current ones.

Let's say a modern white family has $100,000 in slave derived wealth in their pocession. Ignoring realities and complications, let's say they leave the entire ammount for the next generation. So the next generation of the white family now has the $100,000 of slave-derived wealth.

In a "perfect" reparations scheme, that $100,000 would be taken costlessly from the white family and given to a former slave family that "deserves" that money. Assuming they also leave every penny of that money to the next generation, then there should still be that same $100,000 of wealth in the next generation.

No transfer of wealth between generations. The only difference is ancestry of the people holding the wealth.
I see what you are saying, but aren't there a lot of assumptions.

For political reasons, I was just saying that it wouldn't likely come directly from the current generation of taxpayers. If it were very efficient, which seems unlikely in the political sphere, then it could work like you say.

Also, wouldn't we need to repeal the Death Tax -- to maintain that transfer of wealth for the future generation of people of a particular ancestry.

I think there are lots of groups out there that currently see the Death Tax as a form of reparation, an inefficient one mind you, but still a transfer towards greater equity.
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