The hollowed out middle, top heavy wealth distribution pattern is not going away. It’s here to stay and it dramatically changed all estate planning law practices. Before the estate tax exemptions were raised, my colleagues and I spent substantial time and effort avoiding estate tax, both for living and deceased clients. Times have changed radically, and so has estate planning advice for the moderately wealthy.
Public policy debates on taxation will not alter the fundamental nature of our civil oligarchy. The wealth control mechanisms that are in place now are much too powerful to alter. You just have to recognize it, see the war, and arrange your family’s affairs accordingly.
Interestingly, commentators on the left believe there is a sinister plot from specific individuals to exploit the weak and poor and keep them in their place. Winters and others believe this political and economic hegemony is purposeful. I disagree, and believe our economic system is the result of highly complex, diffuse market forces, not greedy bad guys or Marxists notions of cultural hegemony. Here’s one of my favorite passages from the book Oligarchy (quoting Graetz and Shapiro, who are Yale law professors):
“This reconstruction of the politics of tax policy has been a long-term affair”. Oligarchs have realized “a significant return on their three decades of investments in activist, conservative think tanks.” These actors blaze the ideological path along which drones in the Income Defense Industry, who do not need to be significant conceptualizers, can follow. Graetz and Shapiro write that the think tanks “have spawned teams of smart, energetic researcher-activists for whom the supply-side hostility to all taxes on capital is second nature.” These activists at institutions like the Heritage Foundation “supply legitimacy and ideological ammunition to the lobbyists and interest groups… who work relentlessly, day in and day out, to keep up the tax-cutting pressure on the Hill.”
I guess I’m a drone in the income defense industry. Well, I’m happy to be a low level drone warrior for the Mass Affluent. The higher level drones at the big law and accounting firms and family offices are over-the-top smart and very highly motivated and paid. Bureaucratic government planners and ivory tower academicians like Graetz and Shapiro don’t stand a chance against them. Your Estate Planning War Chest should contain a set of binoculars so you can keep an eye on the distant, brutal war being waged between the elite wealthy and those who seek to attack them. Wealthy elites will always win in the end. They are much too powerful with legions of well armed warriors fighting on their behalf. We in the Mass Affluent just need to be sure we don’t become collateral damage.