By Bill Kaplan
"Maybe congressional Republicans really are nuts, suicidal or both. The latest
evidence is House approval of legislation abolishing the estate tax. ... With
economic inequality a major issue, why strive to be portrayed as stooges for
hedge-fund operators, well-paid executives, affluent celebrities and wealthy
families? All would benefit if the estate tax were repealed."
-- Washington Post business columnist Robert Samuelson
The House voted 240 to 179 to repeal the federal estate tax (Wisconsin GOP Reps. Sean Duffy, Glenn Grothman, Reid Ribble, Paul Ryan and James Sensenbrenner - yes, and Wisconsin Democratic Reps. Ron Kind, Gwen Moore and Mark Pocan - no.
Earlier, on a separate legislative track, the Senate voted 54 to 46 for repeal. Wisconsin Sens. split: GOP Sen. Ron Johnson - yes and Democratic Sen. Tammy Baldwin - no). Rep. Ribble said: "Eliminating this tax would present a unique economic opportunity for northeastern Wisconsin, allowing families to transfer their small businesses and farms from one generation to the next."
However, the New York Times reported that only "5,400 estates would be affected this year (by the federal estate tax), accounting for 0.2 percent of the deaths anticipated in the United States." And, only 63 estates in Wisconsin paid a federal estate tax in 2013 (IRS). Why? The tax exempts much wealth, $5.43 million for individuals and $10.86 million for married couples (2015), adjusted annually for inflation.
Moreover, estate tax attorneys and accountants use other tax law loopholes to avoid paying estate taxes. Finally, the Center on Budget and Policy Priorities estimated that "roughly 20 small businesses and small farm estates nationwide (emphasis added) owed any estate tax in 2013".
The shrinking middle class in Wisconsin, sharpest decline in the U.S. (Pew Charitable Trust), is not threatened by the estate tax. But the top 0.1 percent, despite a growing income and wealth gap, want even more. GOP President Teddy Roosevelt put it aptly: "Of all forms of tyranny the least attractive and most vulgar is the tyranny of mere wealth, the tyranny of a plutocracy."
Rep. Ribble would do well to heed TR's wisdom. Btw, Grover Norquist still has Ribble as signing (4/29/14) the anti-tax pledge, i.e., keep tax loopholes for the super- rich. Moreover, the New York Times said: "Taxes take away, but also give back, mostly to the very rich." The top 1 percent in 2013 got $95 billion while the bottom 80 percent got $90 billion, from a total of $340 billion in "tax subsidies" for housing, education, retirement and savings (Corporation for Enterprise Development).
Memo to Ribble: the super-rich don't need it.
-- Kaplan wrote a guest column from Washington, D.C. for the Wisconsin State Journal from 1995 - 2009