From
WaPo
- WITH MEDICAID and food stamps on the chopping block, the House of Representatives is about to vote for a $290 billion tax break for the richest sliver of Americans. The subject is, once again, the estate tax. Under the convoluted, dishonest plan Congress approved in 2001, the estate tax was to be gradually reduced and eliminated by 2010, only to spring back the following year to its 2001 level: a tax of 55 percent on estates of $1 million or more. Tomorrow the House is set to vote to keep full repeal in place after 2010.
This is unnecessary, irrational and unaffordable. Those who inveigh against the "death tax" point to the travails of family farmers and other small-business owners whose heirs are supposedly forced to liquidate enterprises to pay the tax bill. In fact, even if the estate tax were to revert in 2011 to its 2001 level -- and no one believes that the exemption will remain at $1 million -- it would affect the estates of only 2 percent of those expected to die that year. At $3.5 million (and $7 million for a couple) -- the level proposed in a Democratic alternative sponsored by Rep. Earl Pomeroy (N.D.) -- a mere three-tenths of 1 percent of estates would be covered. In other words, no one but the richest Americans would be asked to pay estate tax.
Moreover, an analysis by the Urban Institute-Brookings Institution Tax Policy Center supports the contention that the family forced to sell its farm to pay the tax is, if not a fiction, close to it. Looking at situations in which farm and business assets represent most of the estate, the Tax Policy Center found that there would be just 50 affected in 2011 in the entire country if the exemption were set at $3.5 million.
To be fair, an argument could be made that Republican support for this measure notwithstanding the extraordinary benefits conferred far beyond this identified, victimized farmer class represents an abberational departure from Republican orthodoxy, which under other circumstances is designed merely to, uh, encourage hard work and reward economic investment. Or something.
