So this week the House is going to debate a repeal of the federal estate tax–a.k.a. the “death tax,” and in reality a tax on extremely large inheritances. This is the great unfinished business of the Bush Tax Cuts of 2001, and Republicans can’t help themselves in pushing it now that they control both Houses of Congress, even though they know it won’t survive a veto.
Used to be Republicans talked about estate taxes as though they only affected “family” farms and ranches and small businesses, even though the major beneficiaries of a total repeal would be li’l old families like the Kochs. Now they’re trying an even more emotional ploy, per a report from The Hill‘s Bernie Becker:
House Majority Whip Steve Scalise (R-La.) said Tuesday that it is “morally wrong” for a family’s toughest decision after a death to be figuring out the next steps for their business. “That’s not supposed to be something people have to deal with when they’re grieving for the loss of a loved one,” he told reporters.
Since payment of estate taxes are not required until 9 months after death, and (a) there’s a total exemption for spousal inheritances and (b) a $5.4 million exemption for all inheritances, with additional deductions available, this scenario of the grieving family trying to figure out how to stay out of the poor house is more than a bit overwrought. And obviously, the size of estates we are talking about are generally the subject of estate planning, which means said weeping survivors typically won’t have to make any decisions at all.
In any event, progressives should be quite aggressive in welcoming this debate. They have plenty of ammunition, including the passionate arguments of the father of the federal estate tax, Theodore Roosevelt. And they really do need to counter the mythology of the small struggling business or farm being taken away by a socialistic Uncle Sam. This is all a cover for the real beneficiaries, the wealthiest people in America, who hardly need the kind of protection against taxes in death they’ve managed to secure in life. Large inheritances are and have always been an enormous factor in long-term inequality, and an offense to the presumed morality of capitalism, in which material rewards follow market utility or economic “virtue,” not birth lotteries.
Beyond that, it’s fun, if not especially charitable, to mock the tears of the undeserving heir at the indignity of having to share his or her windfall with the commonwealth.