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Cross-posted at Winning Progressive

The New York Times reports that the unnaturally orange John Boehner, the Ohio Republican who dreams of becoming Speaker of the House, suggested this morning that while his priority was to provide a tax cut to the richest 2% of Americans, he would reluctantly support President Obama’s plan to provide relief to only the other 98% of us who make less than $250,000 per year.  Perhaps not surprisingly, Mr. Boehner has already walked this comment back, issuing a statement suggesting that he was returning to the Republican position, which is that all Americans will only get a tax cut of approximately $6,000 on average if the richest 2% of Americans are given an extra $103,000 on average per year.

I’ve already explained why the Republican’s insistence on giving $103,000 more per year to the richest 2% makes no fiscal or economic sense.  But buried in the New York Times article was an even more insidious proposal from Mr. Boehner – to extend the current one-year moratorium on the estate tax.  

The estate tax is a tax on the transfer of wealth at one’s death.  This year, there is no estate tax, as George W. Bush gradually allowed rich families to inherit a higher percentage of their decedents’ estates, with the tax entirely eliminated in 2010.  Moving forward, President Obama wants to return the estate tax to its 2009 levels, which exempted the first $3.5 million of an estate from any taxes, and applied a 45% tax rate to any value above that $3.5 million.  Republicans like John Boehner, however, want to permanently eliminate the estate tax.

President Obama’s position is clearly the correct one for our country for a number of reasons:

  • Budgetary Cost: The Republican’s proposed elimination of the estate tax would blow a $667 billion hole in the budget over ten years in comparison to President Obama’s proposal.  At a time of cutbacks to critical government services (police, firefighters, education, public health, etc.), and long term budget deficit concerns we cannot afford to give an extra $667 billion to wealthy inheritors.

  • Fairness: The people who pay the estate tax are paying it on money that they did nothing to earn.  If I had a rich relative who died and left me a $5 million estate, I would be extremely upset about their death, but I would not be upset that I received only $4.3 million after the estate tax, rather than $5 million.  Taxes for core government services have to come from somewhere, and the estate tax is probably the fairest place for them to come from.

  • Restoring Meritocracy: The estate tax is the most progressive and meritocratic tax in the country, as it impacts only the richest 0.3 % of estates and helps prevent the perpetuation of wealth in wealthy families from generation to generation.  Contrary to Republican myth, only approximately 80 small businesses and farm estates nationwide owed any estate taxes under the 2009 standards.  With the income gap between the richest 1% and middle class Americans tripling between 1979 and 2007, it is critical that we restore the estate tax in order to help reduce that gap.

Our country is faced with critical needs to restore basic government services, repair our infrastructure, reduce our long term deficit, and further boost our economy.  Each of these requires that government has adequate revenue to do its job well.  In the face of these needs, Republicans are proposing to provide even more resources to the wealthiest families in our country by eliminating the estate tax and giving an average of an extra $103,000 to the top 2% of Americans.  By contrast, President Obama is taking the common sense position of restoring an estate tax that touches only the top 0.3% of estates, opposing further tax relief to the wealthiest 2%, and providing a tax cut to folks making under $250,000 per year.  When it comes to taxes, it is clear that President Obama is on our side, and the Republicans are not.

Do you support restoring a tax on the richest 0.3% of estates in order to help reduce the budget deficit and provide basic government services?  If so, let folks in your community know by sending a letter to the editor of your local newspaper.

Originally posted to Winning Progressive on Sun Sep 12, 2010 at 07:17 PM PDT.

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Comment Preferences

  •  I favor restoring the estate tax, but a merit- (1+ / 0-)
    Recommended by:
    maybeeso in michigan

    ocracy? I thought merit-based achievement and acquisition of wealth was "selfish".

    Yep, I'm a newb. Nope, pointing that out isn't worth anything other than an addition to your ad-hominem collection.

    by SooperDem on Sun Sep 12, 2010 at 07:23:51 PM PDT

  •  Even when the estate tax is restored, (4+ / 0-)

    the wealthy will always find ways to avoid it.

    How do you think families like the Bushes and the Kennedys manage to remain fabulously wealthy, through the centuries?

    They gift the money to their children in the form of trust funds while they are still alive, and thereby exempt the money from estate taxes after their deaths.

    There are thousands of loopholes.

  •  So are they still using the term (2+ / 0-)
    Recommended by:
    Dave925, maybeeso in michigan

    "death tax"?  I thought that was something that was here to stay ... the sort of phrase that the media loves repeating ....

    •  Of Course (0+ / 0-)

      And they always will, it's a winner. People who aren't far off from leaving behind anywhere from a ten or twenty to several hundred grand believe they're subject to such a thing.

      As long as we have no messaging infrastructure we can't possibly counter these Gooper turds pearls of propaganda aimed at the gut and not the minds of their targets, meant to confuse and confound this is the essence of the Puke efforts to institute outright Robber Baron feudalism and "Death Tax" is a superstar in that repertoire.

      - Fools and dupes abound and wisdom is the subordinate of naked greed. What a country!

      by Dave925 on Mon Sep 13, 2010 at 12:03:43 AM PDT

      [ Parent ]

  •  I think we should tax the top 2%, not 0.3% (6+ / 0-)

    Then, more rich people could get into heaven, according to Jesus Christ. Really, we don't need a landed gentry, we don't need an aristocracy.

    If they insist, then it's just a matter of time until things get so bad, the starving masses would rise up and hack them all to bits, and then where would that get them?

    •  It Used to Be Much More Than 2%. You Should (2+ / 0-)
      Recommended by:
      Dave925, bear83

      check it out.

      As I recall the 50% tax bracket started at what today would be only 1/4 million a year. The point was to compress compensation beginning only a few times the national median.

      The point of that was to remove the insane incentives for talent to work solely for uber profitable finance, and keep production, journalism, science, innovation, charity and public service reasonably competitive for drawing talent.

      It's about so much more than staving off the torches and pitchforks. It's about being able to live, thrive and dream.

      We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

      by Gooserock on Sun Sep 12, 2010 at 09:08:26 PM PDT

      [ Parent ]

  •  I think a two step inheritance tax should be in (8+ / 0-)

    effect.   45% over $3.5million and maybe 70% over $15million.

    Why not a progressive inheritance tax?

    REMEMBER THE GULF! Republicans want to get the country moving by taking us from D to R for Ramble.

    by maybeeso in michigan on Sun Sep 12, 2010 at 07:57:31 PM PDT

    •  And a progressive capital gains tax too eom (6+ / 0-)

      Patriot: the person who can holler the loudest without knowing what he is hollering about. Mark Twain

      by Deathtongue on Sun Sep 12, 2010 at 08:37:20 PM PDT

      [ Parent ]

    •  NFL Capitalism: (2+ / 0-)
      Recommended by:
      Dave925, maybeeso in michigan

      The big winners bear the big burdens. The collection is invested in the big losers. The most freedom is for the big middle.

      You can always win another game. You can always win another season, but that gets progressively harder to do.

      You can never win the market. And that's what drives interest and innovation, and successively better products. Nobody can rest on their laurels because nobody can cash out.

      And that's what makes a big, competitive market. It's the exact opposite of market competition. If you win the market, the game ends. The sport ends, and everybody ends up broke.

      We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

      by Gooserock on Sun Sep 12, 2010 at 09:13:29 PM PDT

      [ Parent ]

  •  Forgot Something (12+ / 0-)

    In a tax system that relies primarily on income taxes (i.e. wage based taxation) one of the primary purposes of the estate tax is to tax wealth that was never subject to wage based taxation.

    It's definitely progressive, no matter what the rate.

  •  The Paris W. Hilton Award For Excellence Goes To: (2+ / 0-)
    Recommended by:
    Khun David, Dave925

    John "A Crockwork Orange" Boehner, for his contribution to the New Meritocracy.

    A Proud Member of the Professional Left® since August 10th, 2010.

    by mbayrob on Sun Sep 12, 2010 at 08:46:34 PM PDT

  •  Having worked in the financial services industry (8+ / 0-)

    for my illustrious 10-year career since college, I've taken a few classes on trusts and taxes. I'll never forget one of my teachers talking about the estate tax.  She said that without exception the countries without an estate tax were the ones with vast gaps between the haves and have-nots, and a lot of those countries also have large problems with kidnapping for ransom. Thus, it was a bad idea to get rid of the estate tax.

    I didn't realize it at the time, but that's  pretty revolutionary thing for someone in the finance world to say, given its historically conservative roots. To me that makes it all the more potent that she said it.

    "Out, out, you demons of stupidity!" ~ Dogbert

    by husl piper 11 on Sun Sep 12, 2010 at 08:54:46 PM PDT

  •  I object to wealth being passed on (1+ / 0-)
    Recommended by:

    so I'm in favor of taxing all estates.  My objection is philosophical not fiscal. Fiscally it's just another way to raise revenue.  

    I don't belong to an organized party, I'm a democrat.

    by thestructureguy on Sun Sep 12, 2010 at 08:59:40 PM PDT

  •  No more endless untaxed capital gains (1+ / 0-)
    Recommended by:

    When someone dies after a lifetime of living well, they should cash in their chips, pay their debts and taxes. Leave the rest to the inheritors to start with a clean slate. If families are allowed to build and build without ever taxing the pile of money, we become un-American.

    "As God is my witness, I thought turkeys could fly."- Arthur Carlson

    by bobinson on Sun Sep 12, 2010 at 09:19:36 PM PDT

  •  Why isn't an estate tax a political winner? (0+ / 0-)

    Isn't the vast majority benefitted by an estate tax at the expense of a small minority?

    •  The American Dream (1+ / 0-)
      Recommended by:

      Although the belief is contradicted by data, most folks in the US believe that they could also be rich, and don't like the idea that they're hard earned money would be taken away.

      Also, the powerful part of the Democratic left is filled with rich people, who want to bequeath their wealth to their children, and are not particularly interested in fighting for an estate tax. That everything is run by rich people is increasingly true on the left as on the right.

  •  I support the Pres. on this one (1+ / 0-)
    Recommended by:

    for the 2009 level but freely admit I'm ignorant on many of the details.  I'm curious about how transfer and generation skipping taxes coordinate with estate tax and suspect that this whole issue is more complex than most of us assume.

    What I do know:  1 million dollars isn't what is used to be.  And I suspect is too low for the estate tax level.

    Going back to a much lower amount such as 1 million returns us back to the days when millions of folks needed to hire tax attornies.  The burden of understanding the estate taxes, avoiding them and building legal vehicles to direct estate were ridiculously complicated and expensive to deal with.  (They still are sometimes but at least fewer people are thrust into the situation.)

    One of the major side effects of the estate tax code was that it was an excellent way to provide employment for tax code lawyers.

    In my opinion family farmers or other business persons who work all of their lives should be able to make sure heirs can keep the business intact if that is the wish.  Also it is my belief that most estates subject to this tax actually get divided up among multiple heirs.

    An example:

    I was an heir (one out of seven) of an estate a few years ago.  After estate taxes took away 280k there was around 1.65 million to share out.  The estate was a family farm but there was no one who was going to take the farm operation over.  The top 4 heirs each received 300k to 450k.  They were all elderly widows in the family and living under the poverty line.  They had nothing for savings and were getting by on the minimum until this windfall.  The funds helped them with healthcare and made their retirement a little more comfortable.

    So on an estate of a little under 2 million the proceeds really went to a good cause.  It was a case of the original owner of a family farm that worked his land for over 60 years sharing his assets with those closest to him.

  •  Bill Gates said it... (0+ / 0-)

    "A common, and misguided, criticism of the estate tax is that individuals who work hard and save their money should be entitled to pass on the fruits of that labor to their family. I am not against working hard, saving money, or taking care of your family. However we must acknowledge that the person who accumulates wealth in this country was not able to do that independently. The simple fact of living in America, a country with stable markets and unparalleled opportunity fueled in part by government investment in technology and research (something my family has plenty of firsthand experience of), provide an irreplaceable foundation for success and have created a society which makes it possible for
    some men, women and their children to live an elegant life."

    As an example, consider Bill-O, who I remember stating on his show that he deserves his level of income because he "works" for it and he's "worth" it.  My question for Bill is whether or not he'd receive the same level of income if, for example, he were suddenly a citizen of Bolivia.  As Mr. Gates suggests, the simple fact that Mr. O'Reilly lives in America has a very large effect on his income.

    Don't be a DON'T-DO... Be a DO-DO!

    by godwhataklutz on Mon Sep 13, 2010 at 06:17:44 AM PDT

  •  I'm not with Obama on this (0+ / 0-)

    We need to return to Clinton-level estate taxes, not 2009 level taxes.

    The US has a serious annual budget deficit and $13 trillion in debt. No matter how much or where you cut spending, taxes are gonna have to go up for somebody if the US is to ever get its financial house in order. Large estates are a great place to start.

    There should never be a tax benefit for companies that screw over American workers.

    by bear83 on Mon Sep 13, 2010 at 06:58:22 AM PDT

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