Bush Continues to Shift Tax Burden Away from Ultra-Rich

A central tenet of George W. Bush's governing ideology during the last five and a half years as President, as well as six years as Texas Governor, has been to shift the burden of taxes away from the wealthiest among us to those who have a more difficult time making ends meet. When this ultimate goal cannot be achieved through policy -- i.e. through legislation -- Bush has signaled a desire and willingness to use administrative fiat to make life easier for the extremely wealthy. The New York Times' David Cay Johnston details the latest example of this effort.

The federal government is moving to eliminate the jobs of nearly half of the lawyers at the Internal Revenue Service who audit tax returns of some of the wealthiest Americans, specifically those who are subject to gift and estate taxes when they transfer parts of their fortunes to their children and others.

The administration plans to cut the jobs of 157 of the agency's 345 estate tax lawyers, plus 17 support personnel, in less than 70 days. Kevin Brown, an I.R.S. deputy commissioner, confirmed the cuts after The New York Times was given internal documents by people inside the I.R.S. who oppose them.

As Johnston explains, it is not as if these lawyers are not needed, or that the current staff is not effective.

Estate tax lawyers are the most productive tax law enforcement personnel at the I.R.S., according to Mr. Brown. For each hour they work, they find an average of $2,200 of taxes that people owe the government.

Unless the firing of half of all estate tax lawyers at the IRS doubles the efficiency of the remaining attorneys -- and I'm extremely skeptical that it will -- this will be yet another tax cut given by George W. Bush to his super-rich allies. And at a time at which working Americans are hurting at the pump, the country is embarked in a never-ending military engagement in Iraq and the federal deficit continues to stand close to an all-time high, we simply cannot afford to give those least in need more tax cuts, particularly outside of the normal legislative process.

Tags: George W. Bush, IRS, Taxes (all tags)

Comments

12 Comments

Re: Bush Continues to Shift Tax Burden Away from U

These are the stories that make me absolutely furious. Something that they can do unilaterally, with no oversight and not a whimper from most of the elite media because these issues "just aren't that important" anymore.

I absolutely despise this man.  

by adamterando 2006-07-23 01:53PM | 0 recs
Bookmark this one

in anticipation of the day when somebody argues "we might as well get rid of the 'death tax' because the IRS doesn't even have the staff to enforce it!"

by catastrophile 2006-07-23 02:16PM | 0 recs
Re: Bush Continues to Shift Tax Burden

157 lawyers * $2,200 / hour / lawyer * 40 hours * 24 h/day * 365 day/year = $121,028,160,000

a.k.a.,

$121 billion

by sdedeo 2006-07-23 02:22PM | 0 recs
Re: Bush Continues to Shift Tax Burden

Perhaps a more apt equation would be 157 lawyers times $2,200/hour/lawyer times 40 hours times 48 weeks (four weeks, perhaps, of vacation), which would yield 663,168,000 -- a large figure, but several orders of magnitude smaller than what you come up with. Of course, cutting one half of the staff lawyers will not likely half the amount of estate taxes owed found by the IRS. But your point is nevertheless apt.

by Jonathan Singer 2006-07-23 02:35PM | 0 recs
Um . . .

157 lawyers * $2200/hour * 40 hours/week * 50 weeks/year (counting vacation and other days off) . . . $690.8 million / year.

Reduced aggravation inflicted upon the trust-fundies and Reep contributors attempting to dodge the tax . . . priceless.

by catastrophile 2006-07-23 02:37PM | 0 recs
Re: Um . . .

sorry, was working on GOP math.

by sdedeo 2006-07-23 03:14PM | 0 recs
Great catch.

David Cay Johnston is a truly impressive reporter and kudos for picking this up.

sdedo -- you can't multiple a 40 hour work week by 24 hours a day and assume a non-stop work year.

It's more like:

157 attorneys * $2,200/attorney hour * 40 hours/week * 50 work weeks/year = $690,800,000/year

Still huge. Especially for the investment. Even if these are high-paid employees by federal standard, this is an outstanding return on investment.

by Left in the West 2006-07-23 02:38PM | 0 recs
LOL

MATH FLAME WAR!

by catastrophile 2006-07-23 02:40PM | 0 recs
It's called 'constituent service'.

The top tenth of 1% has invested heavily in this government and expects to see a little ROI.

by Davis X Machina 2006-07-23 02:54PM | 0 recs
A Respectful Dissent on Mechanics

My issue is not with the concept of burden-shifting toward those with a greater ability to pay, but with the wonkish mechanics of the estate tax itself.  I have a vested interest in the continuation of the estate tax; I practice tax law now and am going for an LLM degree in the near future once we go from 2 kids in diapers to one kid in diapers.  But against my own income interest....

Here's my pitch.  Is it better to tax large estates as estates, or to tax the receipt of large inheritances as income?  

If a billionaire dies leaving half a billion to his girlfriend, and the rest in $10,000 increments to 50,000 low-income residents of Baltimore City or Newark, should the girlfriend's half billion be taxed more severely than the broader distribution?  I think so.  Under current law, both get taxed at the same brutal estate rate.

Section 102 of the Internal Revenue Code excludes gifts from income to the recipients.  However, that Code section was written in Washington, not at Sinai.  I think it would be better to have large gifts taxed as income to the recipients, and to get rid of the estate tax altogether.  This would result in tens of thousands of tax advisors having to find productive work instead of building tax shelter trust devices, and the summary retirement of the estate tax code enforcers.

This is not as radical as it sounds.  Survivors of workers with accrued 401k accounts are now treated this way: the 401k balance is NOT part of the taxable estate of the decedent, but is taxable to the recipients as ordinary income.

Deductions for modest or de minimis gifts could enter the equation, just as large credits exist now for estates.  Just as most gifts to spouses are now effectively exempt, they could be exempt from income tax accordingly under this proposal.  Charities could still be tax exempt, that would not change.  But the economic efficiency of eliminating the Alice-in-Wonderland world of estate taxation would be significant - while still placing the burden on the same economic stratum, but with more efficient tools.

by Bruce Godfrey 2006-07-23 07:12PM | 0 recs
Re: Bush Shifts Tax Burden Away from Ultra-Rich

Don't worry about the poor lawyers getting the pink slip--forced into unemployment and soup lines--I'm sure Bush's bank account monitoring NSA programs can snap them up.

by Faustic 2006-07-24 01:33AM | 0 recs
Re: Bush Continues to Shift Tax Burden Away from U

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