Paris Hilton & the U.S. Senator

Parishilton2513Over at the Oregon Center for Public Policy, Mike Leachman has an idea:

Here’s an idea for running the economy: let’s all give tax breaks to super-rich heirs like Paris Hilton! Then, Paris and other lucky heirs and heiresses will spend our money in wise ways that the rest of us mopes never would have thought of, creating an economic boom and great jobs for everyone!

OK, so he's being sarcastic... The Paris Hilton Fan Club, led by U.S. Senator Jon Kyl (R-AZ), is proposing eliminating the estate tax for rich heirs and heiresses.

[It] would cost nearly $1 trillion over the first ten years of implementation at a time when the government is already running massive long-term deficits. The one-year cost for repeal of the estate tax is more than our government invests in worthy endeavors such as homeland security, K-12 education, student aid, or veteran’s medical care. ...

The Paris Hilton Fan Club thinks that massive amounts of inherited income ought to be tax-free while workers continue to pay income and payroll taxes on their wages. They want Paris to have more money to invest in creating great jobs for everyone. They also want her to be able pass on more money to her children, assuring that Hiltons in skimpy skirts will live well, well into the future when our children are still digging their way out of the country’s debt.

Read the rest - and come back to discuss.

  • Adam Smith (unverified)

    Call it a Freudian slip, but I think not. Mr. Leachman unknowingly exposes the great hypocrisy of those who would oppose economic stimuli such as tax cuts.

    "Then, Paris and other lucky heirs and heiresses will spend our money in wise ways that the rest of us mopes never would have thought of..."

    That's just the point. It isn't OUR money. It's Paris' money. We didn't earn it, nor did our dads. That's why Paris gets to decide what to spend it on, not us. And yes, a Hilton buying her third crocodile skin mini-skirt will provide direct stimulus to the economy and create 'great jobs for everyone.'

  • PanchoPdx (unverified)

    What makes you think that you (or a group of people like you standing as proxy for the "needs of society") of has any right to claim half of the Hilton family fortune (which is based primarily on earnings that have already been taxed to provide for the common good)?

    Unless you can answer that one, blathering about Paris Hilton (or other worthless heirs) is really a non-starter.

    It's like arguing that because the US Gov't has such a big budget (and that so much of it is wasted anyway) that the United Nations should just begin taxing the US to provide for third world needs.

    So long as the Hiltons paid their taxes on the money they earned, they should be able to dispose of it as they wish.

  • Sid Leader (unverified)

    For the past ten years, dozens of reporters from Associated Press, New York Times and even the Wall Street Journal have been on the hunt for the Loch Ness Monster of GOP Tax Reform -- REAL people who had to lose their REAL businesses because of the estate tax.

    Answer: No one in America has lost a business because of the estate tax because the MILLIONS or BILLIONS of dollars you get to keep is usually enough... if you aren't a Greedy Gus.

    Don't believe me? Read this from the newspaper W and Cheney read first thing in the morning -- the Washington Post. I hear Jeff Gannon/Guckert delivers it personally in his tighty-whiteys!

  • (Show?)

    I don't know, but seriously doubt that the Hiltons paid taxes on their income at the same rate as I did, but even if they did, why are we talking about double taxation only when it relates to inheritance taxes.

    The answer is that this is how Grover Norquist and his ethically challenged pals at the Hair Club For Tax Dodgers designed the rhetoric. Virtually all money gets taxed multiple times. A more honest frame would be that the Gummint gets a bite anytime that each individual person receives additional income.

    Here's an old Rueben Bolling cartoon dealing with the double taxation as it relates to the capital gains tax.

  • CAM (unverified)

    Good thing the comments made by Adam Smith are not consistent with what the original Adam Smith would have said. For example:

    "That's just the point. It isn't OUR money. It's Paris' money. We didn't earn it, nor did our dads."

    Unless you recognize that pesky little fact that wealth is created on the backs of workers, as the original Smith did. Furthermore, it was the philosophy of the enlightenment that those with wealth had a moral and communal obligation to give back to their communities through employment, charity, and yes, even taxes.

    Neo-con psuedo-economists always conveniently forget that one. That, and the fact that it is consumer spending that stimulates a consumer-based economy and not the precious tax cuts for the rich that end up going to playing the market in ponzi-like speculation schemes (and not for creating jobs) that the neo-cons are always jawing on about. Probably explains why, four years after the recession, our economy (under direct neo-con control, mind you) is still in the toilet.

    As for inheriting wealth, hardly anyone prior to the 20th century believed anyone had an inherent right to a parent's fortune (except kings and dictators). In fact, enlightenment philosophers believed that property was the domain of the community and when a person was done mixing their labor with it, it was to be returned to the community for the betterment of all. Thus they believed taxes such as inheritance, estate, and capitol gains taxes were necessary to ensure that government continue to create the environment in which free enterprise and commerce could flourish. They did not think twice about it.

    This philosophy was so strong among the wealthy class that even in the height of the guilded age, tycoons like Carnagie, Mellon, Aster, Morgan and others managed to give back their massive wealth to the very people whom they extracted it from, in the form of employment, charity and yes even taxes. Contemporary tycoons like Soros, Turner and even Bill Gates are doing it today.

    And yes, their heirs received a comfortable trust to inherit, but it was nothing like the millions and billions that their parents amassed. After all, the heirs of wealth were expected to make their own wealth, another one of those tennants of the enlightenment.

    In 4,500 years of recorded civilization, taxes have always been the responsibility of the wealthy. It's the price they pay for a civilized society. Suddenly the neo-cons want the wealthy to skip out on 4,500 years of recorded precedent, all in the name of a philosophy whose core value is nothing more than the statement "It's mine to do as I please!"?

    Sounds like social activism to me.

  • PanchoPdx (unverified)


    Suppose the Hiltons wanted to convert their entire fortune into gold and drop it by helicopter into an active lava bubbling volcano.

    Nothing wrong with that, it's their right to do so.

    Suppose the Hiltons want to devote their entire fortune to running a campaign to get Paris Hilton elected President (once she's old enough).

    Nothing wrong with that either.

    Suppose they want to invest it all into a series of allegoric movies preaching the evils of environmentalism and run them on a single channel in all their hotels 24 hours a day.

    Nothing wrong with that either.

    Now suppose they simply want to leave all their money to their kids.

    Uh-oh, the government has a problem with that one.

  • (Show?)

    Welp, I ain't no tax expert, nor did I stay at a Holiday Inn Express last night, but as near as I can figure it in the following examples:

    If the seller of said gold realizes any profit on the transaction, they should pay a tax on it.

    The political consultants, media outlets, dirty tricks guys, chauffeurs, and videographers (gotta have them in a Paris Hilton race) would all pay taxes on their respective portions of the money.

    If the Hiltons produce movies that make any money, they are taxed on the profits. If they give a lump sum to someone else to produce the movies, they are taxed on that income.

    The point here is (again) that the money changed hands and the gummint gets its cut.

    BTW Pancho: What did you think of the cartoon?


    CAM also makes a great point about Adam Smith's and other enlightenment proto-libertarians views re taxation.

    Remember that Smith's immediate targets were the huge monopolistic trading companies like the East India Company, Halliburton, and others that received unfair advantage by having the state allied with them against other, smaller merchants and other countries.

    That's why we fought our "Chamber of Commerce" Revolution against the British here in the brand new US of A. These days of course, we are back to the bad old days of Crony Capitalism, and Adam Smith is spinning in his grave.

  • Michael (unverified)

    I think he got this idea from a commercial that is being run on television. So maybe borrowing another's idea is okay? What bugs me about all this nonsense is that the U.S. will spend a huge sum to maintain our troops that are deployed around the world. About $500 for every man, woman, and child in the country. It is the biggest welfare program on the globe and neither party gives a rats ass. Bring the troops home and give us all a big tax cut. M.

  • PanchoPdx (unverified)


    I can't comment on the cartoon because I'm not willing to subscribe to Salon in order to see more than the first frame.

    But double taxation on earned income is not a nonsensical issue. The opposite position, (i.e., taxing money every time it changes hands) is rather ridiculous.

    If you don't think so, then why not tax housewives (or househusbands) for the spending money they receive from a breadwinning spouse?

    Obviously the money is changing hands. Certainly one could argue that a homemaker is providing a valuable service to a breadwinner, why not just call it income (or not) and tax it for the exchange that it is?

    On your responses to my earlier Hilton hypotheticals, clearly a man of your learning and insight can distinguish between:

    A). The Hilton's getting the full value of whatever it is they choose to do with their estate (destroy it, donate it, invest it), and,

    B). The tax consequences for someone who earns income from doing business with the Hiltons.

    Receiving a gift is not income.

    But if you'd like to take the position that it is, then perhaps we should also begin taxing all the charities.

  • CAM (unverified)

    Ever notice that when someone comes along and points out the historical record or logical inaccuracies that clearly expose and contradict the jawings of neo-con psuedo-economists, the neo-con flaigrantly ignores it?

    They seem to be inflicted with that "My mind is already made up so please don't confuse me with the facts" syndrome.

    Hypotheticals don't interest me, especially when there is plenty of historical record available to use instead.

    For example, thr great Reagan tax cut led to the Recession of 1982-84 (it was a depression here in Oregon) and no less than three subsequent tax increases, one each under Pres. Reagan, Bush the Elder, and Clinton.

    BTW It was those tax increases and the subsequent spending associated with it that led to the great prosperity of 1994-99. Now, four years into a recession and after another round of misguided tax cuts for the wealthy class (and none for the working/consumer class), the economy still sits in the bottom of a toilet.

    No, neo-con psuedo-economic voodoo hypotheticals don't interest me. The fact that the economy is in shambles, jobs are leaving this country at light-speed, consumer confidence is at an all-time low, and corporate malfeasance is at an all-time high, that all does interest me, as it should all true liberals and true conservatives. The additional fact that this mismanagement of our economy is happening under neo-con control should and is providing all of the proof needed to us true liberals and true conservatives.

    Neo-cons know this to be true, and it is the reason why they continue to ignore economic truiths or historical facts and instead make up euphamism's like "Tax cuts stimulate the economy" or "The death tax is unfair."

    In a consumer-driven economy, trickle-down does not work. It eliminates competition, removes government (and thus the people) from ensuring a fair and level playing field, and kills the free market. It didn't work for Hoover, it didn't work for Reagan, it won't work now. Unfortunately, it won't stop neo-con psuedo-economists from jawing on and pushing on the rest of us this failed voodoo-economic philosophy

    And that is the real definition of insanity.

  • PanchoPdx (unverified)

    CAM wrote:

    Ever notice that when someone comes along and points out the historical record or logical inaccuracies that clearly expose and contradict the jawings of neo-con psuedo-economists, the neo-con flaigrantly ignores it?

    Were you referring to me? Given the tone of your last post and multiple references to "hypotheticals" I think it must be so, even though I never responded to your post and my comments were clearly directed at the author and then Pat.

    FYI, I'm not a neo-con. Anyone who has read more than a couple of my posts over the last year could tell you that. Applying simplistic inaccurate labels to people who may disagree with you is not a good method of engendering discussion.

    If you want to pose a question to me, then do so.

    However, if you just assume that a lack of response to one of your posts (which was never directed at me) is an indication that I must somehow consider your argument unassailable, well, I'd like to introduce you to Jack Peek.

  • Dan Neal (unverified)

    I see "Adam Smith" is all over ending the estate tax. Remember it was the real Adam Smith who wrote: "The subjects of every state ought to contribute toward the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state ... [As Henry Home (Lord Kames) has written, a goal of taxation should be to]'remedy inequality of riches as much as possible, by relieving the poor and buredning the rich.'" AN INQUIRY INTO THE NATURE AND CAUSES OF THE WEALTH OF NATIONS (1776)

  • CAM (unverified)

    PanchoPDX wrote:

    "Were you referring to me?"

    Actually, no. If I had, you would have known it.

    However, I have to say that your argument is remarkably similar to the statements that Citizens for a Sound Economy and the Oregon Taxpayer Association make. And they also use hypotheticals, although they do so for the simple reason that they are unable to point out a concrete example that supports their arguments, either historical or contemporary.

    I presume you have historical or contemporary examples that you can use. If so, I think it would be good for this forum if you brought them to light. Knowledge is power.

    In any event, CSE and OTA's arguments are not based at all on the only two major economic models out there, the Harvard (or Keynsian) model and the Chicago School (or von Hayek) model. Instead, they rely on obscure psuedo-economists who receive their funding from their national counterparts to develop hypotheticals that are tailor made for their voodoo-economic arguments. So far, they have been relatively successful in falsely convincing people that their euphamisms are economic fact.

    When confronted with the historical or economic record in any discussion or debate, CSE and OTA repesentatives consciously ignore the arguments and instead attack the messenger.

    I merely pointed out that most neo-cons practice the conscious ignoring of legitimate arguments based upon contemporary or historical examples. As you are not a neo-con, I assume you do not.

    That would be a good thing.

    I just happen to believe that hypotheticals only work in the absence of recorded history. As there is plenty of recorded history on the failure of voodoo economics, I will continue to point that out.

    I hope you will also.

    BTW-you might want to note that the argument about taxing the homemaker is already practiced. Homemakers pay consumer taxes regardless of their income, in the form of sales taxes, excise taxes, gas taxes, lodging taxes, or a myrid of various consumer the homemaker is usually a member of the working/consumer class.

    You might also want to note that, except for the business transaction (or value-added) tax, transactions of wealth are exempt from almost all of the consumer taxes.

    If neo-cons are successful in eliminating what is left of the taxes on wealth, they will have eliminated a 4,500 year tradition.

    Call me a traditionalist, but I think that is not such a good idea.

  • PanchoPdx (unverified)


    Maybe we are talking past one another, but I clearly posed moral questions with my posts.

    It's not that I can't play the game of citing noted economists and offering historical examples to back my position, it's I just don't find those sorts arguments worthwhile or compelling when a moral proposition is fairly clear.

    For example, up until the last 150 years, the institution of slavery had been part of civilization for as long as recorded history. I just googled "economics of slavery" and got 119 hits. I'm sure someone out there wrote a dissertation in praise of it. I've come across utilitarian arguments in support of it (aparently there could be more social utility for everyone on average if one class does all the dirty work).

    Even so, I'm not going to waste my time arguing about slavery with someone from an economic or traditionalist perspective because I find the institution morally repugnant.

    Likewise, I consider those who believe that they (posing as a proxy for society) have a greater right to determine what a person should do with his own wealth (earned honestly and already taxed) than the person who earned it, on a shaky moral foundation.

  • Jon (unverified)

    As New Orleans struggles for survival, the President and his amen corner are waging a full scale assault on the Estate Tax, what they derisively (and effectively )term the "Death Tax." They will continue to pursue this massive transfer of the U.S. treasury to America's wealthiest, even as a mountain of evidence shows that successive Bush budget cuts devastated New Orleans' disaster preparedness and levee maintenance...

    For the full story, see:

    "New Orleans Pays the Death Tax."

  • CAM (unverified)


    You stated:

    "It's not that I can't play the game of citing noted economists and offering historical examples to back my position, it's I just don't find those sorts arguments worthwhile or compelling when a moral proposition is fairly clear."

    Then why not consider the larger and more important moral question:

    After 4,500 years of doing so, why only now does the wealthy insist on no longer giving back to the very society, community, country, etc that helped them acquire that wealth?

    As I stated before, prior to the recent neo-con led experiment in trickle-down economics and the tennant that "My wealth is mine to do as I please," wealth was considered a domain of the public and that one who acquired wealth was expected to contribute heavily to the commuity for the betterment of the the form of employment, charity and taxes. It was a moral obligation that those from the wealthy class took seriosly and did not think twice about.

    Fast forward to today. American corporations exporting living-wage jobs overseas faster than they can be replaced by new business and industry. Chairity contributions overall at an all-time low (particularly among the wealthy class). And now the assault on the only remaining forms of taxing wealth that are left.

    Where is the moral outrage?

    You are correct that the institution of slavery was once a part of civilized society for most of our 4,500 years of recorded history. However, the fight over slavery verses freedom has always been a war waged within society for all of recorded history. The fight over the moral obligations of the wealthy on society only started in the last century. They can hardly be compared in any context.

    Wealth is created from the labors of the working class. Smith and all of the subsequent economic theorists all agree.

    Most argue that the wealthy have a right to acquire that wealth. True enough. However, with every right, there is an equil responsibility. This means that the wealthy have a moral obligation, or responsibility to use that wealth for the betterment of the community.

    Enlightenment philosophers framed that argument based upon historical observations. Our founding fathers used it as an ideal for revolution, and included it in the Preamble to the US Constitution ( promote the general wealfare...). Lincoln used it to end slavery. Theodore Roosevelt used it to bust the monompolistic trusts. FDR used it to provide relief for the one-third of Americans who were without a job (the depression had little impact on the wealthy) and to ensure that profiteering did not take place during WWII. It was the standard that all presidents since used, until Reagan and the neo-cons took power.

    Quite simply, when the wealthy no longer practice that responsibility, they no longer have that right to wealth.

    So the philosophy of "It's mine to do as I please" does not fit that responsibility, and when the responsibility of the wealthy is not met by the wealthy, the people, though their government have the right and the moral obligation to make it so.

    The overwhelming evidence to act is all around us today. The unregulated trend of corporate malfeasance, the exporting of American jobs by American corporations, the offshoring of American wealth, the assault on civil liberties in the name of homeland security, and the abandonment of the wealthy to pay their obligation to a civilized society on the wealth acquired off the backs of the working/consumer class...those are the real moral issues that need to be addressed.

    That is what I am concerned about today, because unlike hypotheticals, they are very real and they exist now.

  • PanchoPdx (unverified)

    Truce CAM,

    I got three lines into your last post and I had to stop.

    You can ignore all the silly annoying moral hypotheticals I pose.

    And I'll avoid wading into the swamp of your sweeping historical misconceptions and tunnel-visioned economic references.

    It will save everyone a lot of time (which you could probably use to finish your senior thesis).

  • CAM (unverified)


    Really, calling for a truce and then taking a parting shot? Whatever.

    I think anyone who reads your last post will understand that your parting shots were derrived from frustration. A sound debate over the theory and practice of economics, wealth, government and the will of the people is not for the faint of heart.

    I also understand your reliance on using extreme hypotheticals rather than concrete examples, and your burst of frustration when confronted with that dilemna. I'm used to that. Advocates of voodoo economics do that to me all the time.

    I'm just sorry I wasn't able to provide the validation you were looking for. The theory driving this topic seldom does.

    Oh well, time to move on!

  • PanchoPdx (unverified)


    My parting shot was a little cheap and I'll cop to being frustrated earlier. Although it was not due to the power of your arguments, just the realization that tackling those specious positions is the functional equivalent of slapping Brer Fox's tar baby.

    For example, what was I to do with your foundational claim (made twice) that the estate tax (or some other mechanism of wealth redistribution through taxation) has been an important part of civilization for 4,500 years?

    Laugh out loud, demand proof or just leave the whole thing for dead?

    None of these options seemed satisfying on its own, so I employed the first and last. (my mistake)

    Then there was the point where you invoked Hayek and the Chicago School of Economics in support of your position.

    You might be surprised to learn how Milton Friedman, often regarded as the father of the Chicago School of Economics, viewed (in moral terms) the inheritance tax:

    “Finally, it seems illogical to say that a man is entitled to what he has produced by personal capacities or to the produce of the wealth he has accumulated, but that he is not entitled to pass any wealth on to his children; to say that a man may use his income for riotous living but may not give it to his heirs.” (Capitalism and Freedom, 1963).

    Then there is the observation that most "wealth is created from the labors of the working class."

    All I can say is, Wow! What an important correlation!

    I'll stow that one away along with: "most serial rapists began life as part of the breastfed class."

    But, since (against my better judgment) I've made it this far, I might as well finish.

    At some point, I was impressed to find you acknowledging a "right" for individuals to acquire wealth. (quite magnanimous of you)

    However, you also posit a competing moral obligation (applied in aggregate) for the wealthy to use their "wealth for the betterment of the community" (presumably measured by the satisfation of the community).

    Finally you pontificate that the price of failing to satisfy that competing moral obligation by the aggregate is the outright elimination the first right for individuals.

    In other words, if wealthy people don't spend enough on community needs voluntarily, it becomes the right of the community to extract whatever they believe they deserve from them.

    At the end of the day, it's pretty tedious to argue with the morality of "might makes right". I guess I'm just surprised to find a liberal owning up to it nowadays. (when you could have just as easily claimed to be employing Rawls' "veil of ignorance").

    But I wonder if you'd hold the same perspective if the needs in question were somewhat different?

    For example, we assume that every individual adult female has the "right" to determine with whom she will share her affections.

    But perhaps this "right" is really balanced against a competing moral obligation for women (in the aggregate of course) to generally meet the needs of men in a given society in such manner that promotes formation of stable family bonds.

    A given society might then decide the price of women ignoring that moral obligation (in the aggregate) was justification to eliminate the right of individual women to choose the recipients of their affections.

    Consider my example ludicrous?

    It's got a lot of history on its side. Arranged marriages really have been around for over 4,500 years.

    But somehow I doubt such traditionalist observations would convince you that system is morally valid.

    Back to your thesis....

    In its support, you list a number of examples where the federal government stepped in to promote "community betterment" - presumably when wealthy folks would not.

    How interesting history appears through a rearview prism:

    The Emancipation Proclamation is now an example of the government promoting community betterment while the wealthy sat on its hands.

    And all along I'd thought Lincoln had employed it to encourage slave insurrections in the South to hasten the end of the Civil War?!

    (those damn public schools...)

    Anti-trust regulations, wartime price controls and the New Deal are enlisted as ballast. Somehow, even the Preamble is perverted to your cause.

    But the galvanizing force behind civilzation's Four-and-a-Half-Millenia March of Progress abruptly ended when "Reagan and the neo-cons took power."

    (that one might have a shot at the Hyperbole HOF)

    Jobs are now "exported" (as if they were tangible things that belonged to a society) and we are beset on all sides by "corporate malfeasance".

    Oh, the humanity.

    I suppose that's all the more reason to eliminate whatever other bothersome individual "rights" remain an obstacle to a sufficiently sated majority.

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