After all that has been said in this blog here, here , here, here, here, and here about the importance of estate taxation to our U.S. scheme of taxation, it will come as no surprise to any reader that I am dismayed by the suggestion that Senator Max Baucus is still considering trying to convince otherSenators (in this case, other Democrats) to accept a "compromise" on a change to estate taxation that would eviscerate the provision and affirm the duplicitous campaign for repeal by the wealthy elite of America.
While Senator Kyl is pushing for repeal (and has previously supported at best a "compromise" that would provide a $10 million or more exemption with a 15% rate, perhaps tied to the capital gain rate that Republicans are determined to reduce to zero), Baucus has argued for a $3.5 million exemption and 35% rate. See this description of the Kyl and Baucus "compromise" negotiations. Any successful "compromise" would likely raise the exemption and significantly lower the rate--setting the stage for the billionaires' lobby to stage a come back with another repeal campaign in another few years. See this discussion of the Kyl "compromise" proposal in mid-2005.
Harold Myerson in the Washington Post today provides a service by alerting his readers to the "Estate Tax Lunacy" gripping Congress. Noting that repeal would "plunge the government another trillion dollars into the red during the first decade (2011-2021) that it would be in effect," he points out that the argument that has garnered ordinary American support--that "the estate tax poses a threat to countless hardworking families"--is fabricated "nonsense." What repeal will do is save the estates of wealthy families like the Cheneys ($13-$61 million in savings), the Rumsfelds ($32-$101 million in savings) and the Walton heirs (billions). Myerson also recognizes the Kyl-Baucus "compromise" of a 15% rate being bandied about for the "folly" it is.
I'd go one step further. Congress's willingness to consider such an irrational approach to the country's fiscal woes must have to do with the fact that Congress is made up primarily of millionaires whose main interaction is with fellow millionaires. The rarefied atmosphere of "inside the Beltway" combines with the exclusivity of the Wall Street financial boardrooms, resulting in government by, of, and for the wealthy. Until Congress gets beyond the easy slogans provided by the billionaires who are behind estate tax repeal and reduction of capital gains and dividends taxation, it will not understand that its class-warfare revenue policies that soak the poor and let the rich capture the spoils of war cannot sustain a viable democracy.