Estate Tax? Don't Talk To Me About The Estate Tax

Megan McArdle picked up on my post from yesterday about CNBC's use, or what I said was the misuse, of the phrase "death tax" as the headline for the piece it aired on the estate tax. I agree with Megan that CNBC's use of that phrase was a political choice that is worth noting and (at least from my perspective because I don't want to put too many words in her mouth) criticizing.

In response to what she wrote, Megan then received 82 comments (at least as of about 6 am EDT this morning) that mostly debated the theory behind the estate and gift tax.

As always happens when this tax is discussed, Megan's commenters were working far too hard.  A reason may have been stated for a tax on estates and gifts when it was first imposed, and that reason may have become the stuff political myths are made of since then.  But the estate and gift tax was imposed for reasons that had very little to do with anything other than the need to raise revenue.

That makes a discussion about the incidence of this tax interesting but largely beside the point.  The real issue is not whether estates and gifts should be taxed, its whether we're willing to raise the revenue for the amount of government we seem to want.  Estate and gift taxes are just a side story.