For years now, right-wing organizations have pushed estate tax repeal to ordinary Americans, making them think that little guys, family farms and disabled children's futures are hurt by an evil estate tax bite. See, e.g., this Center for Media and Democracy report on a deceptive conservative PR effort to suggest that ordinary citizens with disabled children couldn't leave their estate to take care of their children. Now, many Americans are finally awakening to the fact that estate tax repeal is candy that is custom designed only for the very very rich. Nobody in the middle class pays the federal estate tax. But the estates of multimillionaires like Vice president Dick Cheney or Big Oil tycoon Lee Raymond would save millions if the estate tax were repealed. See op-ed by Harold Myerson, Washington Post. And although proponents of repeal claim it is a pro-growth measure, the Center for Budget and Policy Priority notes that repeal would decrease national savings.
Last fall (before the election that changed the face of Congress), the friends of billionaires in Congress who want to eliminate the estate tax thought they'd found a way--holding the barely employed poor hostage to the super-wealthy by attaching estate tax repeal to the much needed bill to raise the minimum wage. See Charles Babington, GOP Bid on Wages, Estate Tax is Blocked, Washington Post, August 2006.
Aside: For a good critique of the "logic" behind even more tax breaks to business to "pay for" a minimum wage increase, read Steven Pearlstein, Minimum Wage, Maximum Myth, Washington Post, Jan. 7, 2007. Among the myths he exposes is the following:
"During the last decade, when inflation-adjusted pay of minimum-wage workers was declining, tax rates for small businesses were also declining, thanks largely to the Bush cuts. If it is now imperative to reduce business taxes when the pay of minimum-wage workers is rising, you have to wonder if there will ever be a time when the small-business lobby thinks it doesn't deserve a tax cut." Id.
The failure of one attempt to eliminate the estate tax doesn't mean the friends of the ultra-wealthy gave up. in the new Congress, Senator Jon Kyl (R-AZ) again proposed a "reform" intended to further the goal of eliminating the estate tax--a $5 million individual exemption amount ($10 million couple), indexed for inflation, and at a tax rate no more than 35 percent. The Senate, thank goodness, rejected that amendment (and a similar one put forward by Ben Nelson (D-FL)) yesterday, along with a proposal by Jim deMint for outright repeal. See this posting on OMB Watch. Progressives everywhere should write their Senators and thank them for holding firm against these attempts to raid the Treasury in favor of the ultra rich.
Of course, there is one not-so-bright note. The Baucus amendment to permanently extend the 2009 estate tax provisions--a $3.5 million exemption ($7 million per couple) and a 45 percent rate--was approved by the Senate. That is both too high (the exemption amount) and too low (the rate), but it is better than the Kyl and Nelson amendments.
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