Customer Reviews

Death by a Thousand Cuts: The Fight over Taxing Inherited Wealth

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Right off, let me say that this is one of the best books written about how politicians in Washington D.C. respond to certain constituents when promoting or opposing changes in the tax law. Before your eyes glaze over and you think that this book is for tax experts, I assure that it is not. The authors are wonderful writers and focus on the people behind the drive to repeal the inheritance tax. Thus, it is more about personalities, personal stories, and ideology and how these are used to enact changes in the tax code, than about taxes on inherited wealth per se. Graetz and Shapiro attempt to solve several "mysteries" in this book. First, how did a tax on inherited wealth, which existed for over 60 years and was seen as appropriate, come to be viewed by many Americans as unjust and immoral? Second, how did the diverse coalition attempting to abolish the inheritance tax maintain their cohesiveness when compromise counteroffers should have weakened it? Third, why were groups who favored maintaining the inheritance tax so ineffectual when responding to the abolitionists? Finally, what does the fight over the estate tax tell us about the future of progressive taxation, the idea that those with greater resources should pay higher tax rates? The story Graetz and Shapiro tell should give great comfort to those who want government at all levels to be as small and powerless as possible, and cause great concern to progressives, like myself, who wish to see government programs in service to the majority of working people, rather than in service to the wealthy and powerful. No matter which side of the ideological debate you are on, this book is a wonderful read and I highly recommend it.

A friend gave me a copy of this book; and, therefore, I felt duty-bound to give it a try despite the fact that I never read books pertaining to politics. After struggling through the first few pages, I becaame facinated. It is not a book about estate taxes. Rather, it is a book about how our government works (or does not work). Every registered voter should be required to read it.

This book was written by two distinguished experts on tax policy and reviews the development of the campaign to end estate taxes at the federal level. In many cases it is quite informative. But compared to Jeffrey Birnbaum's book on the development of tax policy in Congress (Showdown at Guccci Gulch) is it quite light in a couple of areas.

The book begins with three questions - fundamentally, how did the coalition that formed get together, how did the repeal coalition successfully resist amendments, and finally how did an item like this (seemingly without a high level of support and which cost a lot of revenue and only affects a small number of people) not cause more generalized opposition to the Bush tax bill?

The book is excellent in some of its history (especially the chapter about the use of science in public policy) but is weaker in telling the story of how the current provision was adopted in a consistent manner. The description of the initial phases of the development of the coalition is pretty detailed. The coalition brought together some seemingly disparate interests.

Where the book falls down is in two areas. First, there are some amazing omissions in this book. Bill Gates' father was indeed a leader of the opposition - but at no place in the book does the narrative explain that Gates' father was an attorney who helped to structure estates and thus had a direct interest in the continuation of the tax. At the same time the authors keep coming back to themes - for example, a minor figure in the fight (farm owner Chester Thigpen) is highlighted more heavily than a key Senator like Max Baucus. I would also have liked to have these policy wonks think creatively about the elements of the estate tax which opponents might go forward with - when the inevitable fights come in the future. The opponents of repeal were inept - but how do they go forward? The last time the estate tax was eliminated (surprisingly not mentioned in the book) was in the 1954 revision - the problems which brought the tax back should be instructive to opponents of repeal.

The second area is the authors' limited understanding of how coalitions are built. This book should be more about the politics of the process. The concluding chapter decries the mix of research, politics and moral issues in the current political environment. Indeed, as one who writes about tax issues often, better research involvement could help the process. But the realities of politics that mix moral/philosophical issues and coalitions and evidence are what we should be thinking about.

So if you are interested in tax policy, this is a good book. But if you want to understand how tax policy is made in the real world - there are better books.

This reviewer is a trusts and estates lawyer as well as a former NY State Senate legislative tax counsel, so the story behind the 2001 repeal of the federal Death Tax effective in 2010 was professionally interesting. However, the authors of Death by a Thousand Cuts did such a fine job of investigative journalism that this book should fascinate anyone interested in politics or even the people and culture of the US. The authors are a Yale Law School tax professor and a Yale College political scientist. They thoroughly understood their material. They explain clearly and choose vignettes and examples for their drama and human interest.

They begin with the question how a 55% top bracket death tax paid by less than 2% of US estates could garner enough opposition to be voted out decisively by both houses of congress. The surprises and drama mostly come from who started and led the battle for repeal and what motivated them. They take us into the heart and mind of a liberal Seattle newspaper publisher who was disgusted to see media chains gobbling up family-owned newspapers all over the country, more often than not because a family death forced sale to pay the confiscatory death tax. They show us a farm equipment dealer whose dealership has little cash but a huge inventory. When its owner dies it will too. They tell us that America's first Black billionaire took out newspaper ads to fight the death tax and that the Congressional Black Caucus supported repeal. It takes no imagination to see a tax imposed on grieving families as sadistic in general, but these particular stories are packed with drama and human interest.

The authors clearly favor the death tax and that makes their extensive coverage of pro-repeal arguments praiseworthy. Their bias comes forth more subtly. They tell where the anti-repeal forces could have argued better. They never strenthen the arguments of the pro-repeal side, although the possibility to do so was just as great. They tell us that Bill Gates' father (a trusts and estates lawyer) fought repeal and what arguments he used. They don't tell us that many prominent accountants and estate lawyers worked with him to protect their fees and that these professionals inspired ludicrously high estimates of lost capital gains revenues if the gift tax were repealed along with the estate tax. They trivialize pro-repeal ideas such as that an estate tax penalizes thrift and hard work. Well, it does.

This is as good a book on how legislation really happens as I have seen. Despite Bismarck's comment that one does not want to look too closely at legislation or sausage being made, this book falls short of the stomach turning impact of Upton Sinclair's The Jungle. However, just as The Jungle inspired Pure Food and Drug legislation when Sinclair intended to convert his readers to socialism, this book may also, despite its authors' pro-tax bias, have unintended consequences. By gathering together the main arguments for repeal of the death tax and stating them clearly in one place, one would hope that the authors will inspire many readers to write to their congress members and senators and demand that death tax repeal be made permanent.

As its subtitle indicates, the book is about the nitty-gritty details of how the near-repeal of the estate tax got enacted into law. The authors discuss tax policy only tangentially: their focus is on who did what and why. Some actors on both sides acted out of idealistic (or, if you prefer, ideological) motives, many out of self-interested motives. According to the book, the pro-repeal forces were shrewd and far-sighted, whereas the anti-repeal forces were slow and weak. For example, charities have a strong interest in preservation of the estate tax, but were not effective in opposition to repeal, because they did not want to offend their donors and boards of directors. Having finished the book, I now believe I understand what happened. I even understand why the estate tax dies in 2010 and then springs back to life in 2011, a situation that seems insane, but which is a perfectly logical consequence of arcane Senate procedural rules interacting with the fact that the pro-repeal forces had no hope of mustering 60 votes in the Senate.

This is an immensely readable, highly educational book. It details how conservatives went after one of the most progressive taxes in our system and successfully got it eliminated. It also details the power of the conservative ideas machinery and how it works in Washington to get what it wants. For those who care about how badly the system is broken -- how the concerns of the few trump the concerns of the many on daily basis in Washington -- this is an excellent book. And most importantly, it exposes how the conservatives are moving the tax system away from wealth to work -- away from the rich to the middle class. That should be a concern to most Americans. I highly recommend the book; most people will be surprised how enjoyable it is as a read.

The authors, Professors at Yale University, wrote this book to explain how the century-old estate tax was repealed in a seemingly democratic society. This tax exempted 98% of the people, and was designed to work against an inherited money aristocracy. The estate tax was one of the most progressive part of the tax laws (p.3). The authors claim that support for repeal first came from various groups outside of Washington, and later used lobbyists and others in Washington. This was one battle in the war against progressive taxation on wealth and income. [The authors don't relate this to the monopolization of the press and broadcast stations, and the propaganda programs that include some "talk radio" shows.] The authors say these groups want to kill progressive taxation not by one big battle, but by a thousand small battles (p.5). George W. Bush's 2001 tax policies turned a large budget surplus into a great deficit. Manufacturing and jobs were destroyed as if hit by a neutron bomb.

The authors wonder why a tax that affects so few could be so successfully attacked. They must not listen to the paid propaganda from radio and elsewhere. It could also result from an exemption figure that was too low, given the relentless devaluation of the currency since 1964 (when coins were silver and the dollar was backed by gold). A million dollars is not what it was in 1963. Renaming the inheritance tax as the "death tax" make sit more threatening to people with fuzzy knowledge. The founding of America saw the law of primogeniture replace by the law of distribution so assets would be evenly distributed after death. There are no "property rights" per se, only living people can own property. The belongings of a dead person are distributed according to law and a will. Large inherited fortunes create an aristocracy, and this is inimical to a democratic society. Refer to American History before 1877. Inheritance in a legal privilege, not a natural right, when it comes to large fortunes. The republican ideal was to split up large fortunes so each could benefit from their work. In 1889 Andrew Carnegie argued for a death tax because giving great fortunes to children was a danger to them (p.233). Page 234 provides some examples.

The authors claim that the increasing number of people who own stocks made them believe they would be affected by the inheritance tax. Maybe it is more true that the $675,000 exemption was decades out of date. [Isn't that middle-class housing in many parts of the country?] That proposed raise in the exemption was too little, too late, and confirmed the idea of its wrongness (p.9). The organized coalition for repeal was not halted by assumption about the status quo. [This recalls Machiavelli's comments on the difficulty of changing laws when a well-organized group works actively while the opposition is disorganized.] The purpose of the estate tax was to break up large holdings, like those middle-class businesses (e.g. "20 gas stations") so the many could profit from their own work, and not create a class of the idle rich. One problem with the estate tax is that it doesn't apply to corporations. Vigorous anti-trust actions is needed to break up the mergers and acquisitions effected since 1980. Its never too late to correct these mistakes.

This analysis should teach us to understand politics. The next battle will be to create an oppressive national sales tax (the so-called "value added tax") that will create the high unemployment and economic malaise found in western Europe today. Or the so-called "Fair Tax" that will lower income taxes for the super-rich by raising them for working Americans. You can read "Greenspan's Fraud" by R. Batra for more details in a shorter book. The `Glossary' lists the various terms and used in the book.

Michael Graetz and Ian Shapiro successfully explain the history of the estate tax, the lobbying battles over it, and the shift from consensus to its repeal in their book Death by a Thousand Cuts. By investigating a range of opinions from Congressmen to farmers, the authors effectively portray how the pro-estate tax side underestimated the ability of organization, group affiliation, and passion to bring about the repeal of a tax that had been accepted without contest for generations. The authors criticize the efforts of large groups and Democratic congressman to organize against the repeal - by illuminating the fact that there was too little organization. While the book provides an accurate and thorough account of the lobbying process that helped lead to the repeal of the estate tax, it provides much unnecessary detail and is obvious in its bias against the repeal of the tax.

For readers who are uneducated in the history of opinions on taxes, Graetz and Shapiro thoroughly describe the evolution of progressive taxation. While not clearly defined in the book, progressive taxation can be explained as a tax that increases as a person's income increases. They describe the shift of opinion on the estate tax when the Republicans made estate tax reform part of their "Contract with America." (Graetz and Shapiro, 15) By using rhetorical frames and spins, pro-repeal groups were able to effectively present the estate tax not as a tax only affecting 2.4% of the wealthy, but as a "death" tax that could potentially "punish" family businesses and farmers by double-taxing their hard earned money. In other words, the authors show how the pro-repealists were successful in presenting the tax in a way that best supported their cause. The authors do a good job showing how much influence organized interest groups can have on government decisions. While the repeal of the estate tax might not necessarily have been a practical crusade, it was a passionate one that eventually won out against the greater good of society and economy, in the opinion of the authors. By putting direct pressure on members of the legislature, pro-repeal groups built a coalition including large numbers of business owners, gays, and the working class, thus encouraging politicians that it would be beneficial to represent and support their cause. With a few wealthy elites being represented by large groups of non-estate tax payers, effective lobbying became the force behind the tax repeal. While the estate tax may have actually benefited some people who worked for its repeal, a pluralistic system prevailed and ended up benefiting the few elites who represented only a fraction of the masses. For an ordinary reader or college student who is unaware of how effective lobbying can be in enhancing American democracy, the authors do a great job portraying the process.

The authors also do a good job providing simple facts on the tax, such as its ability to tax the deceased estate up to 55% and the subsequent $24 billion in government revenue. While they covered some of the services and people who benefit from the tax, they could have been more specific in displaying the direct economic benefits of keeping the estate tax around. If the authors favor the tax, which seems to be the bias throughout the book, why do they not put more effort into displaying its benefits? Despite this lack of information, the authors do a good job explaining the basic components of the tax for readers unknowledgeable on the subject.

When writing about such a widely debated topic, the authors would have benefited by being more cautious in displaying their bias towards keeping the tax around. It tends to distract from their entire argument. From the very beginning, they describe the pro-repeal group's goals as being ones of "conviction and anger" in place of "practicality" (Graetz and Shapiro, 23). While this might be true, blatantly stating their bias against the pro-repeal argument is a good way of losing the reader's trust. Instead of making readers cope with the bias, the author's argument would have been stronger if they would have merely shown the impracticality of the pro-repealists.

The authors also include much un-needed information in the book that tends to get repetitive and boring. Describing all characters by their eye color or ability to cook tends to lose its appeal by the sixteenth chapter when the authors describe Bob Johnson and the paintings covering his walls and his casual way of dressing in black pants and a black polo sweater. Is all this information necessary?

Overall, the book provides good background details on the estate tax and displays the ability of interest groups to change the American government. Graetz and Shapiro successfully provide readers with an educating, enjoyable read that was easy to follow and understand. While it could have been improved by eliminating the obvious bias and the un-needed details, it provides a good look at American government and the power of group affiliation in reaching a goal - whether practical or not.

Graetz and Shapiro's book DEATH BY A THOUSAND CUTS is a must-read for anyone interested in national tax policy. Graetz and Shapiro write well and the story is fascinating and timely.

As a tax attorney, I was excited to purchase this book and get a non-partisan, in-depth look at what was going on with respect to the estate tax. Michael Graetz has a stellar reputation as a law professor, so I was doubly excited.

I was very disappointed that the book's political bias appears on virtually every page. I think reasonable people can disagree on whether we should have an estate tax, but Graetz presents each and every proponent of repeal as a self-interested opportunist. I would have liked to have seen an unbiased account of what "really" goes on in Washington, but this book failed to satisfy.

If you're looking for a book that will confirm your love for the estate tax, and need a reason to pat yourself on the back, this is the book for you. If you are looking for a book that gives you an unbiased account of the world of politics, this book isn't for you. I found Showdown at Gucci Gulch much more interesting.