Daniel Mitchell presents a scenario that should get social and economic libertarians on the same side, and could get economic lefties and social conservatives on the opposite side:
I generally believe that social conservatives and libertarians are natural allies. As I wrote last year, this is “because there is wide and deep agreement on the principle of individual responsibility. They may focus on different ill effects, but both camps understand that big government is a threat to a virtuous and productive citizenry.” …
But that doesn’t mean social conservatives and libertarians are the same. There’s some fascinating research on the underlying differences between people of different ideologies, and I suspect the following story might be an example of where the two camps might diverge.
But notice I wrote “might” rather than “will.” I’ll be very curious to see how various readers react to this story about a gay couple that is taking an unusual step to minimize an unfair and punitive tax imposed by the government of Pennsylvania.
The story is from ABC News:
John met Gregory at a gay bar in Pittsburgh nearly 45 years ago and immediately fell in love. Today, the couple has weathered the early days of the gay rights movement, the death of friends in the AIDS crisis and constitutional laws in their home state of Pennsylvania that have prevented them from marrying.
Now, as lifelong partners facing the financial and emotional insecurities of old age, they have legally changed their relationship and are father and son — John, 65, has adopted Gregory, 73.
The couple was worried about Pennsylvania’s inheritance tax.
“If we just live together and Gregory willed me his assets and property and anything else, I would be liable for a 15 percent tax on the value of the estate,” said John. “By adoption, that decreases to 4 percent. It’s a huge difference.”
Because John’s dad is still alive at 95, he could not legally have two fathers. So Gregory, though older, became the adopted son. The Daughin County Court judge who signed their papers was adamant in telling them that the adoption was “forever” and they would never be able to legally marry. …
The judge did turn to John and said, “I am really curious, why are you adopting [Gregory]?”
“I said, ‘Because it’s our only legal option to protect ourselves from Pennsylvania’s inheritance taxes,'” said John. “He got it immediately.”
Mitchell predicts a few viewpoints:
1. If you have the statist mindset of England’s political elite or if you work at a bureaucracy such as the OECD, you’ll think this is morally wrong. Not because you object to homosexuality, but because you think tax avoidance is very bad and you believe the state should have more money.
2. If you’re a libertarian, you’re cheering for John and Gregory. Even if you don’t personally approve of homosexuality, you don’t think the state should interfere with the private actions of consenting adults and you like the idea of people keeping more of the money they earn.
3. If you’re a public finance economist, you think any form of death tax is a very perverse form of double taxation and you like just about anything that reduces this onerous penalty on saving and investment.
But there are some groups that will be conflicted.
1. Social conservatives don’t like big government and bad tax policy, but they also don’t approve of homosexuality. And, in this case, it’s now technically incestuous homosexuality! If I had to guess, most social conservatives will argue that the court should not have granted the adoption. …
2. Leftists also will be conflicted. They like the death tax and they want the government to have more money, but they also believe in identity politics and wouldn’t want to offend one of their constituent groups. I’m guessing identity politics would trump greed, but I suspect their ideal approach would be to tax all inheritances at 15 percent.
In my fantasy world, needless to say, there’s no death tax and the entire issue disappears.
If you think the Pennsylvania pair had a creative answer to their death-tax problem, a commenter has an even more out-there solution, reportedly in Britain:
The son of a large landowner became engaged to be married. Then the engagement was ended and the landowner, who was in poor health, married the son’s former fiancée.
The landowner, his new bride, son and former wife all went on the honeymoon together. The landowner transferred the estate to his new wife thus completely avoiding capital transfer tax. All four continued to live in the big house.
After a year, the landowner divorced his new wife and remarried his first wife. The son married his former fiancée. The estate had passed from one generation to another without incurring tax.
One self-described social conservative commenter claims to be not be conflicted:
As a social conservative, here’s my take on it. They’re going to be a gay couple regardless of whether or not the court granted their adoption. They aren’t trying to redefine marriage or the family. They are ONLY trying to avoid paying more taxes. I don’t see it as a social issue at all and have no problem with it. In fact, I congratulate their intuitiveness!
Since when is it the government’s business to actively make you feel like an accepted member of society? Schools and parents have failed to inculcate a good sense of self-esteem in the victimhood crowd.