Former Vice President Joe Biden took his turn on the “Political Soapbox” sponsored by the Des Moines Register at the Iowa State Fair last Thursday (8 August).
Like other Democrats, he devoted time to charging racism-racism-racism, the mantra which has all but completely replaced Russia-Russia-Russia now that the so-called “Mueller investigation” has concluded without being able to pin so much as jaywalking on the President.
It is surprising that Biden did not know that he had been allotted 20 minutes to speak. He began by saying, “I know I got 5 minutes,” which must have mystified most of his listeners, who knew how much time he had and would have wondered whether they had heard him correctly; he checked his watch about 2 minutes after he began speaking, however, and he looked at it again after another 2 minutes, and then suddenly blurted out to people sitting in the front row, “How much time do I have left?” Apparently he was told only “15,” because he asked “15 seconds?”; equally apparently he was assured that he had that many minutes, because he then said, very loudly and slowly, “Ohhhh.” Judging by his performance, a casual observer would think that he was an outsider, new to politics, not someone who served 36 years in the Senate and 8 as Vice President, and who campaigned for the presidential nomination twice before.
Like other Democrats, he frequently promised free stuff. On one of those occasions, when talking about raising funds to make community college free, he launched into a bizarre story: “If you have a capital gain, you’re about to cash it in, you get hit by a truck, God forbid, you leave it to your son or daughter, they pay no tax; that costs the government 17 billion a year.” Biden correctly identified the provision of the tax code in question as “stepped-up basis”; it allows heirs to treat the fair market value of an asset which they inherit, like stocks or real estate, as their cost basis, so that they owe no taxes immediately on the inheritance, and no taxes later upon selling the asset other than on the amount by which it appreciated after they acquired it.
The important thing to realize about this so-called “loophole” is that it does not benefit the super-rich, whose estates are valued over $11.4 million and are subject to estate tax; rather, the provision applies only in the case of estates which are too small to trigger the estate tax¾in other words, to many families whose members would describe themselves as belonging to the middle class. Biden should be given credit for specifying how to pay for a program which he is advocating, but what he is talking about is instituting a new federal inheritance tax, payable by those receiving a bequest or inheritance; the new tax would apply to everyone in the country who receives anything from an estate too small to trigger the estate tax, unlike the current federal estate tax, to which only about 2,000 estates per year are liable. The irony is that Biden earlier in his speech had claimed that he was running to help the middle class, and then he announced this scheme which would siphon off large amounts of wealth every year from the middle class to the government.
Free community college might sound good, until you find out that it’s not free after all, if you are a close relative of someone who dies with any money to his name¾rather, although it is free to many of the people who benefit from it, it is costly to many others who do not benefit from it. That raises the question why the costs of community college should not be borne by those benefitting from it, but instead by others, who do not.
Most people would like to leave some money behind, and would like to be able to decide who gets what¾children and grandchildren, nieces and nephews, or a charity of their choice¾, without obligating them to turn around and give the government a big slice. Biden’s scheme ignores the fact that the tax actually gets paid by the recipients, many of whom live in straitened circumstances themselves, and can use the money; in many cases the tax would take money from poorer families to pay the tuition of children from wealthier families. The scheme also betrays the usual mindset of a Democrat: the government is leaving money on the table whenever it fails to impose a tax, or a high enough tax, on some transaction; in the present instance, the Democrat mentality seems to be that it is unfair to give heirs better tax treatment than the decedent would have got; the scheme thus also simply assumes that the decedent himself would have been treated fairly, which arguably is not true in the case of capital gains, since currently they are not indexed for inflation, so that much of the “gain” on which the tax is levied is purely nominal.
Biden spoke for more than 17 minutes, with boilerplate about health care and global warming, before concluding: “We choose unity over division! We choose science over fiction! We choose truth over facts!” That combination of misrepresentation and absurdity provided a fitting end to a performance which was both confused and confusing.