The high cost of repealing the death tax
Usually I try to keep my mouth shut and let our Congressman Doolittle hoist himself on his own petard, like he did in the Abramoff and Homewood ski area incidents, but the “My Turn” piece (“It’s time to bury the death tax” Sierra Sun June 12) really got my goat.
Once again a GOP conservative uses fuzzy “family” rhetoric to disguise another giveaway to well-heeled campaign contributors that the rest of us will be paying off for the next several generations. I refer to repeal of the estate tax, what its opponents call the “death tax.”
The Congressman cloaks his true motives in sentimental images of Homer and Maude being forced to sell their 40 acres, or their corner grocery store, rather than pass it on to Jethro and Daisy Mae, and he casts Uncle Sam (the government he supposedly represents) as the Snidely Whiplash villain who kicks them into the street.
Reality check. According to analyses by both the independent Brookings Institution and the non-partisan Congressional Budget Office, a total of fewer than 250 U.S. farm estates and family businesses owed any estate tax last year. The number drops to 160 nationwide with a $3.5 million exemption, the level that takes effect in 2009. And the American Farm Bureau Federation acknowledged to the New York Times (July10, 2005) that it could not cite a single example of a farm having to be sold to pay estate taxes.
The Center on Budget and Policy Priorities computes that of all estates passed on to heirs, roughly 99 percent pay no estate tax at all. This is because the first $2 million of the value of any estate ($4 million for a couple) is totally exempt from the tax, and this exemption is scheduled to rise to $3.5 million ($7 million for a couple) in 2009 under current law. At this level, only 3 of every 1,000 people who die will have an estate large enough to owe any tax, and most of these tax bills will be offset by charitable contributions.
Permanently repealing the estate tax would cost roughly $1 trillion over the first 10 years of extension, 2012-2021. This cost includes $776 billion in lost revenue and $213 billion in increased interest payments on the national debt.
Who will make up this shortfall? You, me and our children’s children in taxes we will pay while we are alive, every year.
Heirs to vast fortunes like Paris Hilton and George W. Bush will be handed a tax-sheltered inheritance while you and I and our kids pay for schools, water systems, interstates, health care, public lands management, environmental cleanups and basic scientific and medical research ” federal programs that the wealthiest Americans have benefitted from as much as the rest of us.
And guess who gets to pay for this, along with fighting terror, rebuilding Iraq and constructing the Congressman’s Auburn Dam? Not the Hiltons, but Homer and Maude. But if Homer and Maude and you and I object to shouldering most of this burden on our own and ask that the nation’s richest families pay a proportionate share of these costs, I guess the Congressman will dismiss us as “liberals.”
Remember this in November.
David Fenimore is a Tahoe Vista resident.