Tuesday, June 06, 2006

All You Need to Know About the Paris Hilton Tax Cut

The Republicans believe that there is no problem facing Americans that a tax cut for the wealthy can't cure. Any crisis, it seems, justifies a tax cut. The response to the 9/11 attacks? Tax cut. Facing war in Iraq? Tax cut. As Tom DeLay noted at the time, "Nothing is more important in the face of a war than cutting taxes."

Last fall the Senate Republican leadership decided that the appropriate response to the devastation of Hurricane Katrina was to reward the ruling class yet again, this time by eliminating the estate tax. But public censure over such a brazen and callous move in the face of a national tragedy, coupled with general disgust at the emerging incompetence of political leadership from the White House on down, actually moved Senator Frist to reconsider. The estate tax bill was shelved, awaiting a more auspicious time.

That time, apparently, is now. And perhaps the timing has less to do with a better opportunity than the perceived lack of it going forward. What chance would such a bill have if the House or the Senate lost Republican majority in this fall's election? So, with the pending marriage amendment as cover, the Senate is considering re-introducing Jon Kyl's bill, dubbed "Death Tax Repeal Permanency Act" by it's sponsors, and the "Paris Hilton Tax Cut" by Michael J. Graetz and Ian Shaprio in their book Death by a Thousand Tax Cuts.

The Senate debate is crucial, because the measure has always been blocked by Democrats in the Senate. The House version, H.R. 8, passed with 99% Republican support, including proud co-sponsors Rep. Ralph Hall and Kenny Marchant. But no one in the House has been a bigger supporter of the repeal of the estate tax than Congressman Michael Burgess. Burgess promotes the fallacy that the estate tax is responsible for the liquidation of businesses and family farms. It would take an entire separate post to to do justice to this argument, but here's the take-away:
The Congressional Budget Office estimates that only 65 farms and 94 family-owned businesses in the entire country would have owed any estate tax in 2000 if the $7 million exemption level that will take effect in 2009 had been in place back then. And the American Farm Bureau could not cite a single family farm that has ever been lost because of the estate tax, according to The New York Times.
The logic of cutting this tax truly cuts at the heart of the idea of a progressive tax plan. Some of business' biggest scions are behind this legislation, including the Waltons, billionaire heirs of Sam Walton.

Eighteen families, including the owners of Nordstrom Inc., The Seattle Times Co., Mars Inc., Koch Industries Inc. and Wal-Mart Inc., that stand to save $71.6 billion in taxes are financing lobbying efforts to repeal the estate tax, according to a study by two groups....
Wiping the estate tax off the books would mean about $1 trillion in lost revenue for the government between 2010 and 2019, according to private and government estimates.

Every time the Bush administration wants to reward the rich patrons who pull their strings, they trot out tired arguments about economic stimulus and the virtues of the free market. Every time they want to cut benefits for the rest of us, they point with justified alarm to the economic state of our government.
The bottom line as far as I am concerned is that we just cut $4.8 billion in Medicaid in February 2006. The President said this just absolutely needed to be done. Yet, right after that, he signed a bill that cut income taxes by $70 billion on dividends and capital gains, and now wants to cut an additional $25 billion per year by repealing the estate tax. All of this being done at a time when our national debt is approaching $10 trillion. Who elected these people?
And if all this weren't enough to convince you of the lunacy of eliminating the estate tax, consider these facts:
House Democrats have released a report detailing the effect that a repeal of the tax would have on the estates of oil company executives and members of the Bush cabinet. According to the report, estate tax repeal would save the estate of Vice President Cheney between $13 million and $61 million, and would save the estate of Defense Secretary Donald Rumsfeld between $32 million and $101 million. The family of retired ExxonMobil chief Lee R. Raymond would receive a $164 million windfall.
What more do you need to know?

1 comment:

Bradley said...

The Republicans really have some nerve introducing this legislation. It's so obviously pandering to the elite. They can try and explain away the tax cuts (economic stimulation, etc.) but the whole family farm argument is just laughable. These people are nuts.