During the last Bush Presidency, as you may recall, there was a coordinated campaign to eliminate the Estate Tax, which has existed in some form in the United States since the 18th century. Rebranding it the “Death Tax” under the guidance of Republican pollster Frank Luntz, wrote that the term “kindled voter resentment in a way that ‘inheritance tax’ and ‘estate tax’ (did) not,” and alluding constantly to imaginary family farms that would be destroyed if the tax were to remain on the books, Republicans were successful in passing legislation in 2001 that phased out the tax, which primarily affected the super-rich, over a ten year period. (Coincidentally wealth inequality grew at an unprecedented rate over this same period of time in America.) Thankfully, the tax returned in 2011, albeit in a somewhat watered down form. Forces on the right, however, have never stopped plotting to kill the legislation once and for all on behalf of their wealthy backers, who would love to be able to move wealth from generation to generation without taxation.
The most recent attempt to kill the Estate Tax, which I’d prefer to call the Patriot Tax, is being led by Texas Congressman Kevin Brady, the author of H.R. 2429, better known as the
Death Tax Repeal Act of 2013. As of right now, the bill, which could go to the floor of the House as early as this month, when Congress returns to D.C., has 221 cosponsors, the vigorous support of Koch brothers’ front group Americans for Prosperity, and a great deal of momentum. (Three of the bill’s cosponsors are Democrats; Representatives Mike McIntyre of North Carolina, Jim Matheson of Utah, and Sanford Bishop of Georgia. Representative David Price of North Carolina had been a cosponsor, but backed out in April.)
The following comes from an opinion piece in Forbes.
…H.R. 2429 has the support of a majority of the whole House and virtually everyone in the House GOP Conference. It has 221 cosponsors–almost the only Republicans not on there are the ones who traditionally don’t co-sponsor bills because they are in leadership or run committees…
House Ways and Means Committee Chairman Dave Camp (R-Mich.) has endorsed having a vote on H.R. 2429. 18 of the 21 GOP members of this tax writing committee are co-sponsors. Just last week, over 30 Members of Congress sent a letter to the leadership urging a vote on H.R. 2429 as soon as possible…
Reagan economist Steve Entin, now of the Tax Foundation, has a dynamic score which shows that repealing the death tax would actually raise more in pro-growth tax revenue than the meager amount the death tax collects today. That’s because killing the death tax will create hundreds of thousands of new jobs and free up economic resources currently trapped with insurance companies, lawyers, and estate planners. That’s probably why most states no longer have a death tax.
Killing the death tax has, in every poll taken for two decades, attracted supermajority support. Conservative activists – the ones the GOP needs coming out in force to vote this November – absolutely hate the death tax. Sure, it will face the same, tired class warfare arguments from the Left, but that’s never worked with our base voters, the ones that really matter in a midterm election.
It would be smart politics for the House GOP to energize, not demoralize, their base heading into the final election push…
I know, like me, your first inclination is probably to believe everything said by a Reagan administration economist extolling the virtues of trickle down economics, but, just in case you aren’t, here’s the other side of the argument, as expressed by Vermont Senator Bernie Sanders, who let it be known yesterday that he’d be bringing forward an alternative proposal – one that wouldn’t see the Estate Tax eliminated, but strengthened. Here’s his statement in its entirety. (Please read it. It’s important.)
The founders of our country declared their independence from what they viewed as a tyrannical aristocracy in England. More than two centuries later, today’s tyrannical aristocracy is no longer a foreign power. It’s an American billionaire class which has unprecedented economic and political influence over all of our lives.
Unless we reduce skyrocketing wealth and income inequality, unless we end the ability of the super-rich to buy elections, the United States will be well on its way toward becoming an oligarchic form of society where almost all power rests with the billionaire class.
In the year 2014, the U.S. has by far the most unequal distribution of wealth and income of any major country on earth. This inequality is worse than at any time in our country’s history since 1928. Today, the top 1 percent owns about 37 percent of the total wealth in this country. The bottom 60 percent owns only 1.7 percent of our nation’s wealth.
At a time median family income is $5,000 less than it was in 1999, the net worth of the top 400 billionaires in this country has doubled over the past decade. The top 1 percent now owns more wealth than the bottom 90 percent of Americans and one family, the Walton family of Wal-Mart, owns more wealth than the bottom 40 percent of Americans.
In terms of income, the top 1 percent earns more than the bottom 50 percent. Since the Great Recession of 2008, 95 percent of all income gains in the U.S. have gone to the top 1 percent. While the rich have become even richer, more Americans are living in poverty than at any time in our nation’s history. Today, half of Americans have less than $10,000 in savings. We have the highest rate of childhood poverty – 22 percent – than any major country on earth.
More than a century ago, President Theodore Roosevelt recognized the danger of massive wealth and income inequality and what it meant to the economic and political well-being of the country. In addition to busting up the big trusts of his time, he fought for the creation of a progressive estate tax to reduce the enormous concentration of wealth that existed during the Gilded Age.
“The absence of effective state, and, especially, national, restraint upon unfair money-getting has tended to create a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power,” the Republican president said. “The really big fortune, the swollen fortune, by the mere fact of its size acquires qualities which differentiate it in kind as well as in degree from what is passed by men of relatively small means. Therefore, I believe in… a graduated inheritance tax on big fortunes, properly safeguarded against evasion and increasing rapidly in amount with the size of the estate.”
Roosevelt spoke those words on Aug. 31, 1910. They are even more relevant today.
A progressive estate tax on multi-millionaires and billionaires is the fairest way to reduce wealth inequality, lower our $17 trillion national debt and raise the resources we need for investments in infrastructure, education and other neglected national priorities.
I will shortly introduce legislation that will:
• Call for a progressive estate tax rate structure so that the super wealthy pay their fair share of taxes. The tax rate for the value of an estate above $3.5 million and below $10 million would be 40 percent. The tax rate on the value of estates above $10 million and below $50 million would be 50 percent, and the tax rate on the value of estates above $50 million would be 55 percent.
• Include a billionaire’s surtax of 10 percent. This surtax on the value of estates worth more than $1 billion would currently apply to fewer than 500 of the wealthiest families in America worth more than $2 trillion.
• Close estate tax loopholes that have allowed the wealthy to avoid billions in estate taxes. Some of the wealthiest Americans in this country have exploited loopholes in the tax code to avoid paying an estimated $100 billion in estate taxes since 2000. My bill would close those loopholes.
• Exempt the first $3.5 million of an estate from federal taxation ($7 million for couples), the same exemption that existed in 2009. Under this legislation, 99.75 percent of Americans would not pay a penny in estate taxes.
This legislation would exempt more than 99.7 percent of Americans from paying any estate tax while ensuring that the wealthiest Americans in our country pay their fair share.
I agree with former Labor Secretary Robert Reich who wrote, in support of this legislation, that America “is creating an aristocracy of wealth populated by heirs who don’t have to work for a living yet have great influence over how the nation’s productive assets are deployed.” He is right in calling the proposal that I’ve laid out “a welcome step toward reversing this trend.” Let’s fight together to see that it is implemented.
Sanders, of course, is right. Our country is fast approaching a point of no return relative to wealth inequality, and something needs to be done, and done immediately, if we’re to avoid the bloody mess that surely lies ahead. If you have a moment, please write or call your member of Congress and urge him, or her, to vote “no” on H.R. 2429. And, once you’ve done that, call your Senators and urge them to assist Bernie Sanders in whatever way they can, as he attempts to do the politically unthinkable… and ask the 1% to put the future of their country ahead of their desire to subvert our democracy in favor of an American aristocracy.
And, just so we’re clear, this was never about saving small family farms, as the Republicans have claimed. Tom Buis, the former president of the National Farmers Union, has said it best a few years ago. “Family farmers and ranchers are insulted by those who use farmers as the reason for eliminating estate taxes,” Buis said, “when the real beneficiaries are the nation’s multimillionaires.” This fight against the Estate Tax, regardless of how they attempt to position it, has always been about building dynasties, not helping preserve family businesses.
And, for those of you Tea Partiers out there who who claim to care about the “founding principles” our nation was built upon, you should know that our founding fathers supported the idea of an inheritance tax. In a letter written in 1783 by Benjamin Franklin to Robert Morris, the Superintendent of Finance (Treasury Secretary) under President George Washington, Franklin calls resistance to taxes “highly blameable,” and urges the passage of laws that would compel payment. Franklin then goes on to state in this letter, “All Property except (that) absolutely necessary for Subsistence, seems to me to be the Creature of public Convention. Hence the Public has the Right of Regulating Descents (inheritance) and all other Conveyances of Property, and even of limiting the Quantity and Uses of it.”
Yes, contrary to what you may have been told by the likes of Rush Limbaugh, America wasn’t built by people who fled England because they hated taxes, but by people who wanted desperately to create a government of their own, which didn’t just exist to serve the rich and powerful. Our founding fathers hated the idea of aristocracy, and I suspect, where they here with us today, they’d be rallying to the side of Bernie Sanders.
Oh, I should also add that not all wealthy Americans are blind to the risk that comes with severe wealth inequality. Bill Gates Sr., Warren Buffet and a few other billionaires have come out over the past several years in defense of taxes. They know that stability is important, and, more importantly, they know that they couldn’t have made their fortunes if not for the infrastructure investments made by their predecessors. They know that their fortunes were made thanks to the contributions of others, and they know that true patriots pay their taxes.
