Mathew Yglesias is a left of center Harvard educated blogger. Young and idealistic, and well written. But boy is he wrong today. He thinks that if you build a business and you die, then the beneficiaries should be liable for a 50 percent tax on the estate. He most elegantly states the headline that I wish not to repeat. The alternative that he most elegantly states is to make the beneficiary an indentured servant to the government to pay off the tax over time if they can not raise the capital.
He is sadly mistaken. The small business man typically takes a pittance of a salary, reinvesting the money back into his or her business. They struggle and sacrifice to build the asset. Matthew lives in a world of salaries and expense accounts in the Washington, New York, Boston corridor. I am sure that every restaurant he sits in, every newsstand he buys his papers in, and every shop he walks in is there just to be a convenience to him. But to the person who owns these establishments, that is their life, and they are taking a huge risk of time and capital to make it a success. But his selfishness is blind to these little people.
I have a friend who owns a little meat market, with a convenience store and gas station. We were talking yesterday as he was working his typical 12 hour day, on how to grow the business and get the capital to improve the store to the level that a national chain will partner with him. He is frustrated. He is tired. But he is dedicated.
We talked about how to earn enough now to pay the bills, as he is building an asset. That is the goal of small business people, to grow the business to be an asset. Make the world a better place, and create something for the family.
But Mathew does not plan to go down that road. He would rather see that money in the hands of the government as opposed to achievers. He most plainly says, F#$@ the Small Businessman. Well, Mathew, Screw You buddy.
Submitted to the Outside the Beltway Traffic Jam.
UPDATE: Bill Hobbs has a very good post on this topic. His answer is much more refined than mine, but Bill is much more refined than I am.