Need more proof that the Republicans in the U. S. Congress are really, really, out of touch with the lives of most Americans?
The Huffington Post reports that the House of Representative has voted to repeal the 100-year old estate tax — best viewed as a retro-payment for the government protections, infrastructure, and (in some cases) subsidies that have helped the 0.2% of the population who would ever have to pay the tax to acquire (and in the case of inherited riches, retain) so much wealth in the first place.
The enormous prosperity of the top fifth of the top 1% is hard for most of us to envision. The Congressional Budget Office has projected that, if the bill is ever enacted, the revenue loss from taxes on the estates of this tiny fraction of the population will reach $269 billion over just the next ten years. That’s $269 billion just from taxes on the inherited riches of the top 0.2% of American taxpayers. One in five hundred estates.
“Smaller” estates, those worth less than $10.9 million for couples, $5.4 million for individuals, already pay no estate tax at all, so we’re not talking about your average local rich guy, whose family started the town’s car dealership or opened the hardware store or feed lot.
Of course, the Republicans don’t look at it this way. The bill’s title — “The Death Tax Repeal Act of 2015” — is one clue. As Huffington reports, Rep. Kevin Brady, a Texas Republican, called the existing estate tax “at its heart, an immoral tax.”
Let’s see. You started your business, perhaps with the help of a government-guaranteed bank loan. You took advantage of favourable business tax policies to expand. In other words, other taxpayers were required to forego revenues that could have contributed to programs to help them and their families so that you could become wealthier.
The supplies you used to make your product were shipped to you by railways or over highways that both were built by federal infrastructure spending. Your finished product was delivered to your customers over those same, “free” freight routes. Then there are your employees.
The most highly-trained were educated at government-supported technical colleges, or they could use loans guaranteed by the federal government to earn a university degree. And all of your employees, down the line to the most recent hire, take advantage of government-supported health care coverage. If you run a farm, you can add government crop insurance, and maybe ethanol subsidies.
The list could go on and on.
Huffington points out that there is another generous benefit for the richest Americans who would be served by the bill: “The bill would also effectively repeal capital gains taxes for people with these large estates, allowing investments to be passed down without any taxes on their growth over the years. Heirs would only have to pay taxes on gains made after the date they get the inheritance.”
Looked at this way, isn’t not paying back a portion of other taxpayers’ generous investments in your extraordinary success (you’re one in 500, remember!) “at its heart … immoral”?
The bill will either fail in the Senate (where it won’t get 60 votes) or die by presidential veto, but it’s this kind of cynical concern for the “average American” that leads to stories like this one, which reports that a conservative blogger who calls himself a “charter member” of his local Tea Party chapter is considering “holding his nose” and voting for Hillary Clinton in 2016.
He really hates Obama, but he really, really needs his Obamacare!