THE MERELY RICH vs. THE VERY RICH….I hereby award Jeffrey Birnbaum and Jonathan Weisman of the Washington Post the coveted “Lede of the Month” award for August:
The very rich and the merely rich are fighting over the fate of the estate tax.
So far, the very rich are winning.
Here’s the state of play. Apparently the “merely rich” don’t care so much about the rate of the estate tax, but want a big exemption. Their goal is to have a complete exemption for all estates under $10 million.
For the “very rich,” though, that’s chump change. Increasing the exemption to $10 million doesn’t affect them very much, but a rate reduction from the current 47% would. So that’s what they want.
The obvious Republican solution, of course, would be to raise the exemption and lower the rate. Or even repeal the estate tax completely. That way, none of the rich get left behind. Happy days!
So what’s stopping them? Supposedly, they’re stymied by the price tag of total repeal, which would cost $71 billion in 2015. By comparison, a “compromise” measure that favors the very rich by setting the exemption at a paltry $3.5 million while reducing the rate to a Wal-Mart friendly 15%, would cost a mere $53 billion. Apparently that extra $18 billion is a budget buster.
Yes, you heard that right. After enacting tax cuts for the rich during Bush’s first term that were worth a few hundred billion dollars per year, we’re supposed to believe that Republicans are now choking over an extra $18 billion. Sure they are. (The actual answer, in case anyone asks you what’s really stopping them, is: “procedural obstacles that Democratic opponents are expected to erect.”)
So are the rich really different from you and me? I guess that depends on whether you’re talking about the merely rich or the very rich. Life is good at the top.