TW: And it is not because I dislike them. In fact my peeve is that some folks would end them. A favorite Republican gambit is the repeal of the "death" tax. The Republicans have been successful in reducing estate taxes but they would like to do more. One Senate bill described below would add roughly $250 billion to the deficits over the next ten years (and no the conservatives have not defined how they would "pay" for this gift to the wealthy).
Americans are terribly aspirational, a great thing, but the reality is the vast majority will never attain the asset levels subject to the estate tax. Republicans moan that "small business" owner and little, old farmers bear significant estate taxes...bullshit. The vast majority of these taxes are paid by folks with assets exceeding $10MM.
Americans have prided themselves on equality of opportunity and social mobility but wealth begets wealth. Wealth may not buy happiness but it buys education, connections, legal counsel and other power levers unavailable to those less well-endowed. One means, not the only, to mitigate the accumulation of power by elites is an estate tax. If folks want to index the asset levels, fine, even raising the minimum to $5MM is somewhat defensible although not necessary. But cutting the tax on the higher levels should not happen. What the U.S. does not need is yet more tax changes to improve the lot of those with the most.
From the Economist:
"...the Senate's Lincoln-Kyl bill to cap the estate tax at 35% (down from the current 45%), raise the exemption from $3.5m to $5m per person, and index the exemption to inflation. In its first decade after taking effect (2012-2021), the Center on Budget and Policy Priorities found, the bill would cost $250 billion over current law. The tax, notes the Center on Tax Policy, affects just 0.2% of decedents, or 6,000 households per year; 84% of the tax is paid by the extremely wealthy, with estates worth over $10m. Current law is already vastly more generous to wealthy estates than it was in 2000, when the exemption was set at $600,000[and the top rate was 55%]...
One of the standard attacks on the estate tax is the claim that it forces small business and farm owners' children to sell the family property because they don't have enough liquid assets to pay the tax. The American Farm Bureau claims that even the current version of the law "threaten(s) family-owned farm and ranches and the livelihoods of families who make their living in production agriculture", though the trade association provides no figures on how many farms are actually liable. The Tax Policy Center finds just 100 small family businesses and farms would pay any tax under current law; the Department of Agriculture's Economic Research Unit found 554 farms would be liable in 2009, but many of those may not meet any reasonable definition of "small". And Congress has already enacted measures letting farmers value their land at the lower "farm use value" rather than fair market value, exclude 40% of the value of the land, and repay the tax in installments over 15 years. Perhaps there ought to be some limits on how much more revenue our heavily indebted government should forego to cater to a few hundred people a year who have the misfortune to inherit assets worth over $3.5m.
...What kind of deficit hawk advocates slashing $250 billion in government revenue over ten years and giving 99.5% of it to extremely wealthy people who inherit millions of dollars from their parents? Clearly, if Artur Davis wants to become governor of Alabama, he's going to need the votes of a lot of people who voted for George Bush. But surely he can find some conservative causes to champion that actually make some sense, rather than playing along with the Bush-era philosophy of massive, deceptively-marketed tax cuts skewed towards the very rich that have left America with a crippling legacy of public debt."
http://www.economist.com/blogs/democracyinamerica/2009/10/who_wants_to_cut_the_estate_ta.cfm
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