Tom DeLay may be gone but his ghost lingers on.

Nothing better illustrates the cynicism and opportunistic behavior of Tom DeLay's brand of strong-arming Congress than the charade surrounding their efforts to eliminate the inheritance tax.

At a time when a growing number of middle-income American families are forced to pay the alternative minimum tax, the Republican leadership is again fixating on the inheritance tax.  This legacy from Teddy Roosevelt and the progressive era is a tax on significant wealth, the bulk of which is most often accumulated capital which has never been taxed in the first place. The estate tax usually falls on people who haven't earned it and are in the easiest position to pay:  think Paris Hilton.  

Outright repeal has actually been opposed by some of America's wealthiest citizens:  think Warren Buffett.  Indeed the father of America's richest person, Bill Gates Sr., wrote a book about why the elimination of the inheritance tax was a bad idea.  

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Estate Tax Repeal: Pay No Attention to the Man Behind the Curtain

On June 22 the U.S. House of Representatives approved a resolution to consider a bill to permanently eliminate the Estate Tax (skillfully spun by the Republican neo-cons as "death tax").

If Congress approves this bill and it is signed into law, it will mean our treasury will realize an additional deficit of  $283,000,000,000 (that's BILLION) over the next decade, a time when our soaring national deficit can least afford this additional blow.

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The Economist Behind the Curtain

The recent failure in the Senate to repeal the estate tax stands as a rare victory for sane fiscal policy.  The NYT editorialized about the event under the heading "What Passes for Good News."

In fact, the Senate vote came alarming close to ending a tax on inheritances of the richest half-a-percent of households, with a majority of Senators (57--but they needed 60 for a repeal) supporting a measure which would have cost the treasury $800 billion over 10 years at a time of ballooning budget deficits and war.

Of course, the politics of the repeal were the focus of most analyses--would the White House be adhered to or get rebuffed on an issue dear to them--but the economics of the tax cut are deeply revealing of the fundamental flaw of economic policy today.

And that flaw is this: we have, over the past three decades, shifted from we're-in-this-together (WITT) economics to you're-on-your-own (YOYO) economics.

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Gay Marriage Ploy: Classic YOYO Fumble

With their focus solidly on the gay marriage amendment and estate tax repeal, the conservative movement is busy rearranging deck chairs on...well, not quite the Titanic, but on a rotting ship of state.

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Estate tax: compromise is on the way

The Note today says

The Free Enterprise Fund is quite pleased with this statement on Sen. Mark Pryor's (D-AR) Web site: "I support the permanent repeal of an estate tax that harms small businesses and family farms."

One down...

It also has this:

In a piece that also looks at gay marriage, the Wall Street Journal's Sarah Lueck and Brody Mullins report that Sens. Kyl, Baucus, and Schumer "hope to reach a deal" on an estate tax compromise "in the next couple of days," according to aides.

Schumer?!

Isn't he supposed to be on our side?

Veh ist mir...

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