Torpedoing Biden’s presidency for profit and profit

Venality is overrated as a source of political dysfunction — people sincerely believing in terrible ideas is a much bigger one. (A purely venal Republican Party, as I’ve said many times, would be a substantial improvement.) But in the case of a particular kind of conservative Democrat, the explanatory power of the variable is high:

Last week, Democratic senator turned anti-tax lobbyist Heidi Heitkamp, who represented North Dakota for one term before losing in 2018, appeared on CNBC to make a surprisingly emotional appeal against President Biden’s plan to close a notorious loophole for the wealthy. The loophole, called “stepped-up basis” or “the angel-of-death loophole,” allows capital gains to escape any tax at all as long as the owners pass the asset on to their heirs before they sell it.

[…]

Even so, the pleas made by Heitkamp and other moderate Democrats on behalf of the rural petite-bourgeoisie heirs to landowning fortunes exceeding $2 million were felt. Democrats in Congress proposed to raise the exemption to $5 million per spouse. Surely, now that truck drivers inheriting cabins worth less than $10 million would be spared, Heitkamp would have softened her opposition.

But when I reached her on the phone, Heitkamp explained that these adjustments did not satisfy her. When you look at the polling, she told me, people “didn’t believe these exclusions” would really apply. The problem was public opinion. Democrats couldn’t run the risk of taxing extremely large fortunes because working-class folks like “Sam” think they would be targeted.

The fact that this belief was completely false seemed to be beside the point to Heitkamp. She likewise seemed untroubled by the possibility that the reason working-class people would get this false impression in the first place was that groups like hers would spread it. Heitkamp’s group is currently running ads making the case that Biden’s plan to tax the fortunes of the wealthy would hit regular folks. Heitkamp is arguing that even if the proposal won’t hit regular folks, the regular folks won’t believe them. Therefore, Democrats can’t take the risk of raising taxes on the wealthy people who are paying her.

The bad faith here is obvious enough, but:

Six months ago, Heitkamp described the angel-of-death loophole as “one of the biggest scams in the history of forever,” a view that comports with the analysis of economists on both the left and the right. The New York Times reports that Heitkamp was “recruited” to the anti-Biden side by “superlobbyist” John Breaux, who as a member of Congress once confessed, “My vote can’t be bought, but it can be rented.” (Cool story, Breaux.)

Heitkamp told me her objection is to the manner in which Biden is closing the loophole: by taxing recipients on their unrealized capital gain when they inherit the asset. She said she personally would favor a different kind of reform that closed the loophole without this feature. Her group has not endorsed such a reform, though, and is not doing anything to advance such a plan in Congress. Her energy is instead focused on the policy imperative that dovetails with the interest of her employer: talking Democrats out of a big tax hike on the wealthy.

Breaux really doesn’t get mentioned enough when it comes to slimy conservative Democrats of the Clinton era.

I had a lot of respect for the way Heitkamp went out, voting against Brett Kavanaugh while in a brutal race. She was about as good a senator as could be reasonably expected from North Dakota. But needless to say that’s all gone and paid back considerably now that she’s gone the full Evan Bayh route.