WEDNESDAY EDITORAL >> Novak outs our senators
The vote to permanently exempt the spawn of the very rich from the tax is expected to be close, and Sens. Blanche Lincoln and Mark Pryor may cast the deciding votes. Lincoln voted in 2001 to repeal the tax until 2010, and the last time we checked, against every shred of evidence, she was still saying that the estate tax forces heirs to sell the small farms they inherit. There is no known example of that in the approximate 100-year history of the tax, although the American Farm Bureau pleaded with its affiliates several years back to find at least one instance of it to bolster the argument.
Pryor has not said much one way or the other, but he tends to vote in ways that are helpful to the interests of Arkansas billionaires like the Waltons, Tysons and Murphys.
You won’t hear the ads refer to the estate tax or inheritance tax. Rather, it is the “death tax.” That is the term that Republican pollster Frank Luntz coined to change the debate. People were persuaded that it was a new tax imposed on people who were dying, to tax away the mite left to widows and children. (Widows and widowers do not pay taxes at all on estates left to them.)
When you hear the ads asking you to put some heat on Lincoln and Pryor, remember a few facts about the estate tax, which is being phased out effective in 2010 but will return the next year if the President and the Republicans fail next month to extend it:
n All but about 1 percent of estates will never owe a penny of estate taxes. The first $1.5 million of an estate is untaxed. And the effective tax rate on estates that are large enough to be taxed averages about 19 percent, according to the IRS. The rate on most taxable estates is less than that. A little estate planning avoids taxes altogether even on assets larger than the $1.5 threshold for individuals. People have up to 13 years to pay the taxes.
nWhile those who want to eliminate the tax insist that repeal would have little effect on the budget deficit, it would add about $1 trillion to the national debt in the decade after its total repeal.
You’ve read about “the K Street Project,” ex-Majority Leader Tom DeLay’s strategy to funnel all the big corporate lobbying money represented on K Street in Washington to the Republican Party. It may wind up sending DeLay to jail, but repeal of the estate tax is one of its largest fruits. Another is drastic cuts in federal taxes on investment income.
Elimination of historical taxes on wealthy estates and on income from the profitable sale of stocks, bonds and other assets and on dividends and interest is the No. 1 goal of the class that bankrolls political campaigns, Republican and Democratic.
Taxes, they believe, should be paid only on income from your labor. The leisure class has earned the right not to be taxed. If that sounds worthy to you, Sens. Lincoln and Pryor are waiting to hear from you.