"So the Rich Get Richer?" (re:estate tax repeal"

[DFWdem]

http://www.usnews.com/usnews/opinion/articles/050502/2edit.htm

"The House of Representatives has voted to repeal the estate tax altogether, and the Senate is moving toward a very significant reduction. This year the tax is collected only on assets of more than $1.5 million. That would account for about 18,800 people, less than 1 percent of the 2.5 million people likely to die annually. Of the 18,800, only 440 will leave estates with assets primarily generated by farms or family-owned businesses. That's relevant because proponents of eliminating or further cutting the tax portray it as dismembering family businesses that have been built up over many years. The Democrats, seeking a compromise, have proposed exempting $3.5 million per person, or $7 million per couple, with a reduced tax rate of 47 percent. Under that plan, they would tax only 0.3 of 1 percent of estates, but even so, only the wealthiest of the wealthy would be taxed. If the exemption were set at this level, the Tax Policy Center of the Brookings Institution and the Urban Institute notes, only 50 estates would be those of owners of farms and family businesses. The notion that thousands would be forced out of family businesses is, in other words, preposterous."

"But wait, the gift to the super-rich is even bigger than it seems at first blush. The effective tax rate wouldn't be 47 percent. It would be much less. Why? Because the tax would be levied only on the amount above the exemption, combined with state tax payments and charitable bequests. In 2003, the Internal Revenue Service reported, the actual inheritance tax rate averaged just 18.8 percent."

"How, in the face of our increasingly dire fiscal problems, can Congress even think about giving away so much money to this handful of wealthiest Americans? And how dare it add to our national debt in this way when it is cutting so many other vital social programs while forcing the middle class to pay still more in taxes!"

More at the link. This is an excellent argument against the repeal of the estate tax. To paraphrase Bill Maher, "We all hate taxes, but if you're going to tax anyone, for god's sake, tax rich dead people!"

[chomskysright]

1. a refreshing refrain from ONWARD FRISTIAN SOLDIERS:

dedicated to waltzing Karl Rove (waltzing with WHO you might ask) who reportedly hums this whilst cheating, lying, and manipulating his way through his White House chores:


Onward Fristian Soldiers

Onward Fristian Soldiers
Marching as to war
as resourcese dwindle
and there are no more

Frist, the royal master
leads agains the foe
forward into battle
armor-less we go

ALL together now on the chorus:

Onward Fristian soldiers
Marching as to war
the wealthy pay no taxes
banking is off-shore

[salin]

2. Meanwhile... something to watch for in terms of "cutting loopholes"

since January there have been noises from the White House (which increasingly appears to be "running" the leadership in Congress) about "cutting loopholes" - in order to make room for additional tax cuts (including the one in this article). Top among "loopholes" to cut - the corporate tax incentive for companies that provide health insurance. So just when health insurance costs are skyrocketing - and more people are uninsured - they want to make it less likely (because it will cost even MORE) for companies to provide health care insurance. IOW, if you want to be insured - start setting thousands of dollars aside, a year (for a single person - try about $5,000 a year). How many of us realized that much of a tax cut in the first place? But we really do have to protect the estates of multimillionaires and billionaires. I am sure that most americans are happy to make that health care trade off to contribute to that republican cause (of protecting wealthy dead folks' estates.)