Nothing like a little grave digging to help eliminate a tax that is applied only to substantial amounts of wealth. Time has a story entitled, Looking for a Corpse to Make a Case: Senators look for a wealthy casualty of Katrina as evidence against the estate tax.
Federal troops aren’t the only ones looking for bodies on the Gulf Coast. On Sept. 9, Alabama Senator Jeff Sessions called his old law professor Harold Apolinsky, co-author of Sessions’ legislation repealing the federal estate tax, which was encountering sudden resistance on the Hill. Sessions had an idea to revitalize their cause, which he left on Apolinsky’s voice mail: “[Arizona Sen.] Jon Kyl and I were talking about the estate tax. If we knew anybody that owned a business that lost life in the storm, that would be something we could push back with.”
If legislative ambulance chasing looks like a desperate measure, for the backers of repealing the estate tax, these are desperate times. Just three weeks ago, their long-sought goal of repeal seemed within reach, but Katrina dashed their hopes when Republican leaders put off an expected vote.
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Only a tiny percentage of people are affected by the estate tax—in 2001 only 534 Alabamans were subject to it. And for Hill backers of repeal, that’s only part of the problem. Last year, the tax brought in $24.8 billion to the federal government. With Katrina’s cost soaring, estate tax opponents need to find a way to make up the potential lost income.
Unfortunately, there are plenty of Red-Ink Republicans among the majority party in D.C. Bush II has done a good job of outstripping the jaw-dropping deficits left behind by Reagan and Bush I. The fiscal conservatives in Washington, if any are left, have been awfully quiet since the Clinton years. I guess bloated spending is just one of the many attractive features of one-party rule.
In any case, I always like to single out repeal of the estate tax has a remarkably stupid (or greedy, depending on your perspective) way of reducing government revenue. First, only a remarkably small segment of the American population pay much in the way of the estate tax. It doesn’t even start to kick in until you get over (I believe) $2 million dollars left to heirs. And I’ve never seen any justification for reducing taxes on great wealth left to heirs before reducing taxes on a laborer’s income. Both have legitimate claims to the money, but the laborer has a much, much stronger claim to the money he worked for at the end of the week than the heir has to the money somebody else worked for at the end of that other person’s life. Given that we cannot eliminate all taxes, I’d say we shouldn’t even begin looking at reducing or eliminating the estate tax until we’ve figured out how to eliminate the income tax.
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