The Folly of Estate Tax Repeal Lite

Wednesday, May 31, 2006

The Folly of Estate Tax Repeal Lite

In Wednesday's Washington Post, Harold Meyerson offers familiar arguments against estate tax repeal, but they bear repeating. He writes:
The Senate, meanwhile, is scheduled next week to take up legislation by Arizona Republican Jon Kyl that would permanently repeal the estate tax on the wealthiest Americans. If enacted, Kyl's bill would plunge the government another trillion dollars into the red ...

... the (Democratic) party's leadership has sought to dissuade Montana's Max Baucus, ranking Democrat on the Finance Committee, from forging a halfway-house compromise with Kyl that would deplete revenue by only $500 billion to $600 billion during that decade.

... A decades-long campaign by right-wing activists ... has convinced many Americans that the estate tax poses a threat to countless hardworking families. That was always nonsense, and under the estate tax revisions that almost all Democrats support -- raising the threshold for eligibility to $3.5 million for an individual and $7 million for a couple -- it becomes more nonsensical still.

Under the $3.5 million exemption, the number of family-owned small businesses required to pay any taxes in the year 2000 would have been just 94 ..... The number of family farms that would have had to sell any assets to pay that tax would have been 13.

On the other hand, an estate tax repeal would save the estate of Vice President Cheney between $13 million and $61 million ...

... Why any Democrat would back [Baucus' "repeal lite"] measure, however, is a deep mystery. From the policy standpoint, it would make it vastly more difficult both to shore up programs that Democrats believe need shoring up -- better educating the nation's children, for one -- and to get the nation's fiscal house in order.

Politically, backing the measure is even wackier. The Democrats are running this year as the party of comparative fiscal sanity and greater economic equity and security. Baucus's compromise would undermine all those premises.

0 comments in The Folly of Estate Tax Repeal Lite

Post a Comment

The Folly of Estate Tax Repeal Lite | Demagogue Copyright © 2010