How America

reacts to the proposal to do away with the inheritance

tax will say a lot about whether we are losing the battle

for freedom in this country.

But not for

the reasons you may think. The national debate over the

inheritance tax thus far has focused on the wrong

questions.

Here's how

the debate has gone so far:

Republicans

have been pushing for repeal of the inheritance tax,

saying that it penalizes that most American of

institutions, the family farm.

salt-of-the-earth farmer passes away owning very little

liquid wealth, but hundreds of acres of good farming

soil. He wants to pass the farm along to his children,

and at least one of them wants to keep the enterprise

going.

But in

walks the federal government, thrusting its greedy hands

into the pockets of the deceased and demanding money...

lots of money.

Though

farmer Brown had only a couple hundred thousand dollars

in his Roth IRA, his 1,500-acre farm is worth $2.5

million if developed as a subdivision with swimming pool

and tennis courts. Therefore, his heirs will be taxed as

if they had almost $3 million in a safety deposit box

somewhere. They owe the feds about a million and a half.

With only

$200,000 in the Roth IRA, they have no choice. They have

to sell the farm to pay the taxes.

It's an

awful scenario, but those who argue on the other side of

the debate will tell you that it's rare - extremely

rare - that the inheritance tax causes that sort of

problem.

Much more

common is the scenario in which the rich, fat cat techno

tycoon passes away leaving his heirs, who are lazy,

stupid and greedy, millions in stocks, real estate and

good old spendable cash.

The heirs

would spend all the money on booze, fancy cars and world

travel, and would probably run the family business (or

businesses) into the ground.

The federal

government wisely takes half of that inheritance to be

redistributed to more deserving people before it can be

wasted by these ne'er-do-wells. Some goes to single

mothers to help educate their children, some to Medicare

and some to help save the environment from other rich,

fat cat corporate types.

And so goes

the debate, with Democrats and Republicans arguing over

who is more deserving of the money.

Both sides

miss the point by a country mile.

The

question is not who deserves the money more, or which of

the above scenarios is more likely. Sometimes the heirs

are going to be deserving, sometimes not. Sometimes the

single mother is going to put the money to good use, and

sometimes she's going to use it to leave the kids in a

rat-infested apartment while she goes down the street to

score some crack.

The

question is who the money belongs to. And the answer is

that it belongs to the man or woman who earned it,

through investment or labor, and it is that person's

right to leave it to whomever he or she chooses.

Those who

want to redistribute this wealth may argue that earnings

are always taxed, and the government has a right to tax

this inheritance.

I would

agree, except for one insignificant but powerful fact:

whether you're talking about farmer Brown or some fat cat

tycoon, the person who earned this wealth paid taxes on

every dollar of those earnings as they came in.

Or the

wealth will be taxed in due course. If the money is in an

IRA and the heirs liquidate that IRA in order to receive

their inheritance, then the interest and capital gains

will be taxed accordingly.

If it's in

real estate and that land is sold, again the proceeds

will be properly taxed.

There is

simply no logical justification for the government to

rifle the pockets of the dead and snatch away half of the

accumulated wealth of a lifetime of hard work and wise

investing, especially considering that the government

already took half of every dime as it was earned.

If the

majority of Americans think that it's good and right that

the government redistribute this wealth, then we may have

won the Cold War, but our victory is hollow. We have lost

sight of the ideal of freedom.