Posted by Neil H. Buchanan
Earlier this week, The Wall Street Journal's Style & Substance editor announced that news articles in the paper should no longer use the term "death tax." The editor, Paul Martin, explained: "Because opponents of estate taxes have long referred to them as death taxes, the term should be avoided in news stories." A few thoughts:
(1) This is a triumph for those who guard the wall between news and editorial at the WSJ. The biggest concern that people had when Rupert Murdoch's News Corporation bid for the Journal was that the wall would quickly fall. This would be very bad as a general matter, but it would be especially bad in this case because people familiar with the paper have long known that the editorial page is run by a group of extreme right-wing, anti-tax zealots, while the news operation has been scrupulous about policing any attempts to editorialize outside of the op-ed pages.
Thus, for example, the news section of the paper ran one of the best summaries of the now-infamous "McDonald's hot coffee" case, describing it in a way that made it absolutely clear that there was no runaway jury, etc.; but the editorialists continue to invoke that same case as proof positive of the excesses of the U.S. legal system.
This new ruling from the Style & Substance editor is a clear move to maintain the apolitical style in the paper's news columns. Very good news. (Of course, this means that the editorial page will still be filled with references to the "death tax.")
(2) Regular readers of this blog know that this was particularly welcome news for me. In August 2007, I gave my gold medal for "dishonest tax rhetoric" to the use of the term "death tax" in place of estate tax (or inheritance tax, which is not the same thing). This seemed like yet another case where the culture was moving irreversibly in the wrong direction, accepting a dishonest locution purely because of repetition of a lie. With the WSJ now having taken a step back, there is renewed hope.
(3) Mr. Martin's explanation for his ruling was bizarre, arguing that it is the preference of one side in the estate tax debate that makes the term "death tax" political and, therefore, unacceptable. Why, by that logic, does he allow writers to use the term "estate tax," given that proponents of the estate tax have long referred to it as the estate tax? The answer has to be that the term "estate tax" is correct, not that "death tax" is preferred by one side in the debate.
(4) Mr. Martin tries another explanation later in his memo: "[T]the term death tax has become too politicized to be of any use except in editorials. Bury it." It has "become too politicized"? "Become"?! There was never a time when this term was not politicized. The birth of this term, as has been well documented (see especially Graetz and Shapiro's Death By a Thousand Cuts), was entirely a political exercise. It was tested on focus groups by political operatives who had been heavily funded by wealthy opponents of the estate tax. You couldn't find a better example of something that is -- and has always been -- a purely political term.
(5) Interestingly, the particular use of the term "death tax" that brought the matter to Mr. Martin's attention was arguably correct. The offending article began: "With the federal estate tax disappearing for most people, state death taxes have emerged as a surprise new worry." As I argued in my 2007 blog post, there is no federal "death tax," and referring to it as such is thus technically incorrect. (I also argued that it is substantively incorrect.) By contrast, the Internal Revenue Code does use the term "death tax" in a few obscure places to refer generically to state (and foreign) estate and/or inheritance levies. That means that the quoted sentence was technically accurate (i.e., it reflected statutory definitions), referring to the federal estate tax as an estate tax and to the various state taxes collectively as death taxes. This implies further that the very success of the effort to convince people to use the term "death tax" as a political weapon is what really motivated Mr. Martin to ban its use entirely, even where it would otherwise have been unobjectionable.
(6) Mr. Martin's memo contained another oddity. In an attempt to clear up the use of the term "wealth tax," he wrote: "While we’re at it, let’s also bury mislabeled wealth taxes. Any proposal to impose a surtax on high incomes is just that, a tax on income, not a tax on assets. Such proposals affect high-income earners, not necessarily 'the wealthy.'" This is correct, in that it is absolutely accurate to refer to a tax on income as an income tax and not a wealth tax.
On the other hand, the term "wealth tax" is a very simple and familiar one, referring to any tax that is levied on the value of a taxpayer's property (broadly or narrowly defined) at a particular moment in time. The estate tax is a kind of wealth tax, because it is levied on the value of the estate at death (or later, under certain conditions). Plain vanilla property taxes (i.e., local taxes on the assessed value of one's home and land) are wealth taxes. Some states' tax the value of each citizen's car each year, which is a wealth tax. Neither income taxes nor sales taxes are wealth taxes.
This difference is a core part of the tax policy debate. In general usage among tax types, wealth taxes are taxes on large accumulations of money or property, whether those taxes are collected at death or before then. Some analysts, for example, advocate a general consumption tax accompanied by a significant tax on large accumulations of wealth (assessed and collected annually), the latter of which can (if calibrated correctly) turn an otherwise regressive system into a progressive one. Being able to refer to wealth taxes, income taxes, and sales taxes has therefore been a well-understood shorthand in conversations in tax policy circles.
If Mr. Martin simply means that the WSJ's writers should no longer use the term "wealth tax" to refer to an income tax on high-income earners, then there is nothing unusual about that. He appears, however, to be going further, suggesting that the term has become so degraded by misuse that it has lost its meaning. If so, that is a loss to clear communication. Even so, Mr. Martin's call would be the right one. If a word loses its meaning, we do ourselves no favors by pretending otherwise.
But it is important to end by emphasizing the good news: A major news organization has finally said unambiguously that it is bad journalism to use the term "death tax." It is a very good day.