01:00 AM EDT on Saturday, April 23, 2005
The Providence Journal
Here are the circumstances, as they stand assembled before us. The Congressional Budget Office has forecast this year's budget deficit at $394 billion, with cumulative deficits expected to add up to $2.6 trillion during the next 10 years. Numerous economists have expressed concern that these burgeoning deficits could lead to high interest rates, further weakening of the dollar, and other serious economic problems.
Meanwhile, President Bush barnstorms the countryside, howling that the Social Security system is about to run out of money,and that, rather than raising taxes to keep it solvent, the entitlement program should be privatized.
Other social-welfare programs are also on the chopping block. For example, a House-passed budget resolution calls for an estimated $30 billion to $35 billion in cuts over the next five years in Medicaid, Food Stamps, foster care and adoption, assistance for abused and neglected children, and other programs that help low-income families.
Given the dire financial situation, not to mention a basic sense of fairness, you might be forgiven for thinking that the U.S. House would oppose a tax cut for the wealthiest 2 percent of Americans -- at a cost over 10 years of $290 billion: enough to cover most of the current budget deficit. After all, President Bush's 2001 tax cut has already taken away $1.35 trillion in government revenue, over 10 years, and given most of it to the rich.
You would, of course, be wrong. The House has voted 272 to 162 to repeal the tax on all estates valued at more than $1.5 million, for individuals, and $3 million, for couples -- about 2 percent of all estates.
You might even be tempted to think that, at the very least, the House would keep in place a tax on estates of over $3.5 million ($7 million for couples) -- which would amount to just three-tenths of one percent of all estates (or just 8,500 estates in 2011, when the repeal would kick in).
Again, you'd be wrong -- by a 238-to-194 House vote.
At a time of dangerously large federal deficits, at a time when Congress is proposing large-scale cuts in social-welfare programs, it is hard to understand how anybody in Congress could defend this massive tax cut for the rich with a straight face -- let alone say that, as a matter of "basic fairness," we must permanently repeal the estate tax, as did bill sponsor Rep. Kenny Hulshof (R.-Mo.).
House Speaker Dennis Hastert (R.-Ill.), meanwhile, said that the estate tax was "just evil, because it takes away the American dream from too many American families."
The estate tax does not take away the American dream, from anyone.
The rich have already achieved the American dream, and they have found multiple ways to avoid paying the lion's share of estate taxes. They do this especially through charitable giving -- which actually helps make the American dream possible for more people (and which, according to Congressional Budget Office estimates, would be reduced by an annual $13 billion to $25 billion if the estate tax were repealed).
More serious, repealing the estate tax would greatly accelerate the growing concentration of wealth, by preserving the largest fortunes -- making it even harder for the vast majority of people to have a shot at the American dream.
When the Senate takes up the estate tax, as it has promised to do, the members should think long and hard about fairness. It's difficult to see how cutting help for abused and neglected children and saddling all children with massive future federal debt -- so that children of the wealthiest Americans can inherit millions and not work a day in their life -- resembles anything close to "basic fairness."
-- Lee Drutman
http://www.projo.com/opinion/contributors/content/projo_20050423_23estat.1bfe769.html
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