A March 15 letter sent to Senate Majority Leader Mitch McConnell (R – Kentucky) from the Family Business Coalition, and signed by more than 100 organizations and business groups in the United States, has called for the US Senate to take action to repeal the estate tax.
The letter noted that the House of Representatives voted in April last year to repeal the tax, and that Senator John Thune’s (R – South Dakota) mirror legislation to the House-passed bill “has already amassed support from the majority of the Republican caucus.” . . .
The burden that the estate tax places on family businesses and farms was the subject of much discussion in the House, and the Coalition’s letter emphasized that the tax is “unfair” and its negative effects “make permanent repeal the only solution.”
“It makes no sense to require grieving families to pay a confiscatory tax on their loved one’s lifetime savings,” the Coalition added. “Often this tax is paid by selling family assets like farms and businesses. Other times, employees of the family business must be laid off and payrolls slashed.”
It pointed out that the death tax “currently accounts for less than one percent of federal revenue, … [and its repeal] would spur job creation and grow the economy. There is a good argument that not collecting the estate tax would create more economic growth and lead to an increase in federal revenue from other taxes.”
“In addition,” the letter continued, “the estate tax forces family businesses to waste money on expensive insurance policies and estate planning. These burdensome compliance costs make it even harder for business owners to expand their businesses and create more jobs.”
This is an almost Platonic encapsulation of Republican donor class propaganda, or less politely, politically-motivated lying.
The current federal estate tax is the most progressive tax out there: Only the estates of very rich people will ever pay anything under it. The individual exemption under the tax is $5.45 million, and the survivor in a marriage gets all of her or his spouse’s exemption, meaning that the couple’s exemption is $10.9 million. This in turn means that around 499 out of 500 Americans aren’t going to pay any estate taxes at all under the current law.
But decades of Republican lies about mythical family farms and small businesses having to dig around in the couch cushions to pay mean old Uncle Sam have had their effect: a Gallup poll finds that 54% of Americans favor Cruz’s and Trump’s proposals to eliminate the estate tax altogether, and only 19% oppose it (the only encouraging thing about these numbers is that 26% of those polled said they didn’t know enough about the issue to have an opinion on it).
The argument for eliminating the current estate tax consists of weapons-grade plutocratic ideology: Since only extremely rich people pay it, it will generate “only” $246 billion in revenue over the next decade (imagine arguing that a social welfare program was going to cost only $246 billion). And since that $246 billion will come at the cost of forcing extremely rich people to pass on less of their wealth to what trusts and estates lawyers call “the objects of their bounty” that’s a cost we cannot as a society force these people to pay in good conscience, because [step in argument missing].*
*I’m honestly puzzled about what’s supposed to go in these brackets. That taxes on people who inherit vast sums of wealth are immoral by definition? Any other possible candidates?