Theyve discovered, belatedly, that income inequality is a problem, and theyre no longer proposing to give tax breaks to the wealthiest 2 percent of Americans. Now they are proposing to give tax breaks to the wealthiest two-tenths of 1 percent of Americans.
On Tuesday afternoon, the House Rules Committee took up H.R. 1105, the Death Tax Repeal Act of 2015, with plans to bring it to a vote on the chamber floor Wednesday Tax Day. It is an extraordinarily candid expression of the majoritys priorities: A tax cut costing the treasury $269 billion over a decade that would exclusively benefit individuals with wealth of more than $5.4 million and couples with wealth of more than $10.9 million.
Thats a tax break for only the 5,500 wealthiest households in the country each year, according to the Joint Committee on Taxation. Of those, the 318 wealthiest estates each year those worth $50 million or more would see an average windfall of $20 million each, according to the Center on Budget and Policy Priorities.
And this at a time when the gap between rich and poor is already worse than it has been since the Great Depression? Never in the history of plutocracy has so much been given away to so few who need it so little.
This is the ultimate perversion of the tea party movement, which began as a populist revolt in 2009 but has since been hijacked by wealthy and corporate interests. The estate tax has been part of American law in some form since 1797, according to the advocacy group Americans for Tax Fairness, a shield against the sort of permanent aristocracy our founders fought to rid themselves of.
It had long been a conservative ideal, and the essence of the American Dream, to believe that everybody should have an equal shot at success. But in their current bid to end the estate tax, Republicans could create a permanent elite of trust-fund babies.
The estate tax was a meaningful check on a permanent aristocracy as recently as 2001, when there were taxes on the portion of estates above $675,000; even then there were plenty of ways for the rich to shelter money for their heirs. As the son of a schoolteacher and a cabinetmaker, Id like to see the estate tax exemptions lowered so that taxes encourage enterprise and entre*pre*neur*ship while keeping to a minimum the number of Americans born who will never have to work a day in their lives. The current exemption of $5.4 million (the current estate tax has an effective rate averaging under 17 percent, according to the Urban-Brookings Tax Policy Center) does little to prevent a permanent aristocracy from growing and abolishing it entirely turns democracy into kleptocracy.
The kleptocrats offer all sorts of bogus justifications for giving away $269 billion to a few thousand of the wealthiest Americans.
House Ways and Means Committee Chairman Paul Ryan (R-Wis.), appearing late Tuesday before the Rules Committee, claimed that the estate tax is absolutely devastating to family farms, and he claimed the repeal would remove an additional layer of taxation from assets that had already been taxed.
Double taxation? Americans for Tax Fairness, citing Federal Reserve data, notes that 55 percent of the value of estates worth more than $100 million comprises unrealized capital gains that have never been taxed.
Hurting family farmers and small businesses? In the entire country, only 120 small businesses and farms (100 of them large farms) were hit by the estate tax in 2013. And for that tiny number affected, there are all sorts of provisions already in place to soften the blow: low valuation rules, delayed tax payments and other breaks and discounts.
GOP leaders such as Senate Majority Leader Mitch McConnell (Ky.) and House Speaker John Boehner (Ohio) have begun to recognize that the vast gap between rich and poor is detrimental and to blame the problem on President Obama. Their solution, so far, has been to propose cuts of hundreds of billions of dollars from food stamps, Pell grants, Medicaid and other programs for those without means and, on Tax Day, to give $269 billion to the few who already have the most.
It sounds to me like theres a lot of wealth envy in this country, Rep. Virginia Foxx (R-N.C.) complained while serving as chairwoman of the Rules Committee debate Tuesday. The bill abolishing the estate tax, she said, will draw a line in the sand.
Yes, it will: between the wealthiest two-tenths of 1 percent and everybody else.
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