Repeal the ‘death tax,’ rack up the debt | AspenTimes.com
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Repeal the ‘death tax,’ rack up the debt

I’ve been listening to the debates about the “death tax,” which is what tax-hating Republicans are calling the federal estate tax, and I’ve got a few observations.For those whose rock is not wired for radio, the U.S. House of Representatives is debating a modification of the estate tax, gradually raising the “exemption” for the next five years until the tax all but disappears. At that point it can be abolished without too much political uproar, the Repubs think.There’s been a lot of fuss and bother in Congress over this whole thing, and I guess that’s as it should be, since the tax generates a lot of money from a relative few taxpayers.According to one watchdog group, the outright appeal of the estate tax would rob the U.S. Treasury of $1 trillion over the first 10 years after repeal. The U.S. Senate rejected total repeal earlier this month, after hearing arguments that the economy couldn’t afford it.A different watchdog group has declared that the entire “death tax” diversion is in truth a campaign of disinformation, funded by 18 of the richest families in the United States. over the last decade. Those families, according to the estimates of the group United for a Fair Economy, stand to keep some $72 billion a year if the tax is repealed. How many college loans might that represent, or environmental cleanup missions, hmmmmm?After a little Web-based research, I uncovered the following “facts” (I put the word in quotation marks because I’m still not sure about the veracity of Web pages):• In 2006, the estate tax exemption is $2 million per individual and $4 million per couple, meaning estates at that size or below are not taxed upon the death of the individual. Just one in 370 of all estates, or 0.27 percent, will pay the estate tax in 2006. • In 2009, as things now stand following “reform” back in 2001, the estate tax exemption will be $3.5 million per individual and $7 million per couple. One in 600 estates, or 0.16 percent, will pay the estate tax in 2009. • In order to mask the full impact of repeal when the latest reform was passed in 2001, Congress enacted a law that allows for full repeal for only one year (2010) and then, the next year, re-instates the estate tax at 2000 levels. Republicans, eager to energize their base of support among the super-wealthy, have proposed several modifications to the tax, most of which call for the “exemption” to be raised slowly over the next few years until the tax is all but meaningless. According to a report from the Joint Committee on Taxation, the “compromise” proposals would cost almost as much as full repeal, since they come as close to eliminating the tax as possible without actually doing it.Well, I don’t know about all that, but the whole things seems a wild ride to no good end. Here’s why.First of all, I think the tax is misnamed in the first place. What it really is, I believe, is a “junior’s gotta work a little bit” tax, since that’s what it really signifies – the reduction, by whatever amount, of the money a rich man’s kids will inherit when that rich man dies.Now, I know a few people whose personal fortunes likely have been shaved off a bit by estate taxes. In fact, some of my best friends are probably trust-funders – I say probably because we’ve never talked about it, such delicate subjects simply don’t come up. But I can’t help wondering how people manage to live in such an expensive place without a visible and regular means of support.Anyway, lest the reader conclude that my objection to the repeal of the “death tax” is entirely due to jealousy, let me explain further.Our federal government already is borrowing unconscionable sums of money every day to keep itself in business. Any budgetary surplus this country had after the Clinton years, and it was considerable, was long ago soaked up in the sands of Iraq, along with the blood of 2,500 dead U.S. military personnel.Every time the Bush/Cheney/Rumsfeld cabal takes another slash at the U.S. tax structure, the talking heads on the networks dutifully add the statement, “the revenues lost due to this measure will likely have to be made up by borrowing,” or some such verbiage.A trillion dollars over 10 years is a lot of money to be made up by borrowing, and our economy is on shaky ground now.I suppose we should acknowledge that our local economy might be hurt by a decision to keep the estate tax as it is. Certain bars might not see the rise in revenues they could expect after repeal, and certain drug dealers might be forced to make do with one private plane instead of two.The valley’s real estate dealers, too, are likely panting with anticipation over the repeal of the tax. So wouldn’t it be just such a shame if it never happened?A news report on Friday said there might be a vote in Congress any day now, so if you’ve got any feelings on the topic you might want to give your Congressman a call. After all, the college scholarship that falls to ruin due to estate-tax repeal could be the one your child was after.John Colson can be reached at jcolson@aspentimes.com


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