THE ESTATE TAX IN THE BALANCE….According to the Washington Post, the business community has carefully weighed up the pros and cons of the pending Republican legislation that combines an increase in the minimum wage (boo!) with a decrease in the estate tax (hooray!) ? and they’re on board:
Business lobbyists said the trade-off between a lower estate tax and a higher minimum wage clearly favors the business community and upper-income Americans….”Every closely held business in America today is either affected by the death tax or could be affected by it,” one top business lobbyist said.
Now this is actually a bit odd. There’s an abstract sense in which every small business “could be” affected by the estate tax, but in reality virtually none of them actually are. The CBO estimates that even under current law a mere 485 small businesses are affected by the estate tax each year ? note that that’s not 485 thousand or 485 million, it’s 485 ? and if the exemption were raised to $3.5 million, a change that even Democrats endorse, the number would be reduced to 94.
Ninety. Four. The entire business community is practically giving itself whiplash making a U-turn on the hated minimum wage in order to reduce the estate tax on 94 businesses each year. Wow.
POSTSCRIPT: By the way, I see in the fine print here that the Republican legislation would increase the size of the estate tax exemption to $10 million per couple by 2015 and then index it to inflation thereafter. It’s funny how indexing for inflation is out of the question when it comes to something like the minimum wage, but turns out to be an essential safeguard when it comes to making sure that a $10 million estate tax exemption doesn’t dwindle away to nothing due to future congressional inaction.
Think of it: in terms of actual purchasing power, that $10 million exemption could easily decline to $9.5 million, or even $9 million, if future congresses were to dilly dally over passing an increase. Thank God America’s future heirs to great fortunes are being protected from the ravages of inflation by today’s Republican Party.