I’ve been enjoying watching Chuck Grassley, the Republican Senator from Iowa, try to explain his way out of his claim that poor people spend their money on hookers and blow “booze or women or movies.” Grassley’s comments came in response to Republican efforts to repeal the estate tax, which Republicans will have you believe affects hardworking Americans who built their family wealth from nothing and who only want to leave their children and grandchildren enough money to, you know, go to college or farm the old homestead. In actuality, it affects just a tiny fraction of a percent of Americans. This is because, under current law, your estate has to be worth about $5.5 million for the estate tax to touch you, and both the House and Senate bills increase that to $11 million, with the Senate bill eventually phasing it out. The Tax Policy Center estimates that that will be about 80 family-owned businesses and farms this year, and they will face a tax of about 6%. So, no, the tax doesn’t bust up family farms–it just works against the upward suck of wealth and the perpetuation of an aristocracy.

In a demonstration of ignorance about what poor, working class, and middle class families live like, Grassley told the Des Moines Registrar:

“I think not having the estate tax recognizes the people that are investing, as opposed to those that are just spending every darn penny they have, whether it’s on booze or women or movies.”

He later declared that his degrading statements about those of us who don’t have assets of $5.5 million were taken out of context, explaining, “The question is one of basic fairness, and working to create a tax code that doesn’t penalize frugality, saving and investment.”

Grassley is confusing money and morality.  He’s also incorrect about his facts: wealthy people spend more money on “frivolous” things than do poor people. In fact, when poor people receive cash transfers, they often spend LESS money than they would otherwise on such “temptation goods.” So if Grassley was hoping to reduce spending on “sin,” he could do so by INCREASING cash payouts to the poor.

Grassley is willing to invoke morality arguments about the poor–but not the rich. Should we cheer on people who invest in businesses that are socially harmful? Why is my spending money on a bottle of booze and a movie more immoral than a millionaire’s investment in the alcohol or film industry?

Plus, without consumers, those investments don’t matter. Grassley implies that investors are better citizens (After all, they are doing something good for America by investing.), but the financialization of the American economy has done terrible damage to us. Take your girlfriend out to dinner and drinks and you’ve literally paying your neighbors. Buy stock in GE, Microsoft, Pfizer, Merck, or Apple (some of companies with the biggest accumulated offshore profits) and you’re not.

To Grassley’s concern that the estate tax is “unfair”…. I don’t think many of us will buy it. There is nothing more fair than everyone starting at zero. Conservatives like to pretend that everyone starts life equally, and they are quick to deny that things like the structural racism and sexism of the past should be things we account for today. (“White people shouldn’t be punished for the racism of their ancestors” is one such defense.) But they are perfectly okay with unfairness that enriches the already-rich. If Grassley wanted to be fair, he’d tax estates at 100%. Why should the kids of wealthy people get to inherit wealth? They didn’t do anything to deserve it.

If Senator Grassley wants “fair,” he should go to Des Moines. Or make the estate tax 100% so that no rich kid gets to ride on the success of his father. Turns out that wealth makes for poor moral character. 

Let’s say, though, that the spirit of Grassley’s comment was that tax policies should incentivize the responsible use of money. I have some suggestions:

1. Give women preferential treatment because we are more responsible with money. Grassley’s comments suggest he doesn’t see women as earners at all, but if he wants to see his tax policies put to good use, he should direct them toward women. When women are in charge of the family money, we spend it more on the family and less on personal expenses. We spend less on alcohol and cigarettes. And we distribute what we have more fairly across family members.
2. Give women-led businesses preferential tax policies because, once again, we’re more responsible with money. And men know it, which is why women are tapped for leadership during times of crisis.
3. Invest in immigrants, both documented and undocumented. Their presence lowers crime rates, and they TWICE as likely as native born people to start businesses in economically vulnerable areas, stabilizing neighborhoods and improving the tax base.
4. Use tax policy to punish companies that offshore and hide money abroad. Our tax policy needs to put US priorities first, and we aren’t doing with policies that encourage the movement of jobs or hoarding of money.
5. Reward consumers. We’re the backbone of the economy. Get rid of sales taxes on groceries, children’s clothing and school supplies, and medical devices.

The GOP would protest any of these ideas as racist and sexist and anti-entrepernural–even as they propose policies that keeps intergenerational wealth derived during times when women and people of color were legally barred from a fair shot.

What to do about it?

Rebecca