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Wednesday, June 07, 2006

The Fight Over the Estate Tax begins …

courtesy of Alternet . org

Senate Republican leaders are sounding their bugles and charging ahead on their long awaited move to
abolish the Estate Tax. The Times article notes that "Most polls show that a slim majority of voters support a repeal of the tax, especially when it is called the "death tax." But the tax affects less than 2 percent of all estates — most of which belong to very rich families — and repeal would be expensive." This accompanying analysis piece gets more into the nuts and bolts, noting:

• "Over the last decade, 18 of the wealthiest families in the country have spent more than $200 million lobbying to repeal the estate tax …"
• "With repeal, the estates of the 50,000 richest Americans who die in 2011 would save $40.4 billion in taxes …"
• "[R]epealing the tax would offer little or no tax-savings benefit for 80 percent of

Source: Tax Policy Center, by way of The New York Times

The Washington Post's
Harold Meyerson said last week that the bill, if passed, would "plunge the government another trillion dollars into the red during the first decade (2011-2021) that it would be in effect."

The American Prospect's Robert Kuttner
wonders why the Democrats aren't attacking on this issue, noting, "… if Democrats can't manage to embarrass Republicans on this one, you can understand why they're losing their historic role as the believable party of the common American." Kuttner sees that "The Republicans, with 55 senators, need at least five Democrats to help them get cloture on this vote."

The Republican leaders appear to be courting several Democrats seen as woo-able on the issue: Sens Blanche L. Lincoln (D-Ark.), Mark L. Pryor (D-Ark.), Mary L. Landrieu (D-La.), Ben Nelson (D-Neb.), Patty Murray (D-Wash.), Maria Cantwell (D-Wash.), Ken Salazar (D-Colo.), Mark Pryor (D-Ark.), and Max Baucus (D-Mont.).

Republican Sen. Jeff Sessions (R-Ala) made his ultra-humanitarian
pitch across the aisle in Sunday's Washington Post, interlacing lovely imagery of the "death tax" in with the pain of losing loved ones. How touching!

The next day, Post columnist Sebastian Malaby
tore the Senator's line to pieces, calling the repeal a "protectionist barrier around the hereditary elite," "anti-meritocratic and unfair." He added:

The United States is by some measures the most unequal society in the rich world and the most unequal that it's been since the 1920s. What is the dumbest possible response to this? I dentify the most progressive federal tax and repeal it.

Kuttner notes the absurdity of at least one of this group lining up against the Estate Tax:

Where does Mary Landrieu think the money will come for Louisiana's flood defenses if Congress keeps gutting the tax code? The average Arkansan can only dream of worrying about the estate tax, but lead promoters of repeal are the Arkansas-based Walton family billionaires of Wal-Mart fame.

The Seattle Post-Intelligencer uses its editorial power to hopefully slap some sense into its two Democratic senators, appealing to its readers' "sense of fair play" by noting that the repeal "is poor public policy," and charging that "Any tax cut that adds to the federal debt is outright immoral."

On the flipside, Democratic leadership is counting on the votes of Republican Sens. John McCain (R-Ariz.), George V. Voinovich (R-Ohio), Lincoln Chafee (R-R.I.), and our very own Olympia Snowe and Susan M. Collins.

Meanwhile, in Maine …

Sen. Collins announced that she was retreating from her former support for the Estate Tax's elimination, while Sen. Olympia Snowe hasn't made any major statements in recent days. Collins' statement reveals an interesting shift among Republicans who are sensitive to the tidal ebb on this issue,

Neither side appears to be
taking the issue lightly in Maine, where a PR war is underway. Here's an ad prepared by one group opposed to the repeal. The Maine People's Alliance, also opposed to the repeal, delivered its message to the Senators by way of props and hubris. Here's the press release put out today by the Maine chapter of the Heritage Foundation, which stands about as firmly in favor of the repeal as can be imagined.

Perhaps the
most thoughtful presentation opposing the Estate Tax Repeal was written, oddly enough, by a childhoodfriend of mine with whom I had completely lost touch. That is, until I heard him in an MPBN report last fall, as he helped ramp-up the campaign to sway Sens. Collins and Snowe against the repeal. He prefaces his report by noting:

The United States government first instituted the federal estate tax in 1916. After
decades of economic panics, significant economic inequality, and the impact of dangerous and oppressive working conditions, Americans decided an emphasis on shared prosperity, through measures like the estate tax, would be better for the economy and the nation. Progressive reformers like Republican President Theodore Roosevelt recognized that the concentration of large amounts of wealth in the hands of a few families was incompatible with American commitments to democracy and equal opportunity. They also understood that the wealthy have a unique obligation to contribute to society, because society plays an essential role in wealth creation.

[R]eforms that preserve most of the revenue make more sense than repeal or cuts that are tantamount to repeal. The estate tax provides needed revenue at a time of mounting national challenges and skyrocketing national deficits, while providing a strong incentive for charitable giving

Federal tax policy is important to the state of Maine, not only because Maine people pay taxes, but also because the state relies disproportionately on services provided by the federal government. If the federal government cuts spending to pay for tax cuts, that will hurt Maine. If the government instead increases the deficit to pay for tax cuts, it will lead to future economic stagnation, along with tax increases or service

Well Cliff, I hope your pitch works!


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