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A BOSTON GLOBE EDITORIAL
Editorial – Boston Globe
6/19/03
Handout for millionaires
JUST WHEN it seemed impossible that Congress could tilt more shamelessly to the richest taxpayers, the US House yesterday voted to repeal permanently the estate tax on multimillion-dollar inheritances. The bill, which would increase the already ballooning deficit by $162 billion over 10 years, makes the recently enacted cut in the dividend tax look like something out of the New Deal. The Senate should reject this blatant giveaway or risk shredding one of the few remaining aspects of fairness in the nation’s tax system.
House Speaker Dennis Hastert yesterday tried to say the repeal was about ‘'fairness to families.” But the true constituency of concern for the Republicans was revealed when they rejected a Democratic alternative that would have exempted an estate’s first $3 million from taxes ($6 million for couples). This would have ended the tax for 99 percent of estates – all but the very richest 1 percent. But it would have cost the treasury only $28 billion over the decade, illustrating how heavily concentrated wealth is at the top.
How bad an idea is eliminating the estate tax? Let us count the ways. It would be a blow to philanthropy, which depends on endowments from wealthy individuals who are now exempt from estate taxes if the money is left to charity. It would starve the government of billions in needed revenue for the benefit of a favored few: Just 2 percent of the nation’s estates were big enough – $1 million or more – to be subject to the estate tax in 1999. It would exacerbate the growing divide between rich and poor, a trend that runs counter to the very idea of equal opportunity for Americans.
Happily, all 10 members of the Massachusetts delegation voted against the repeal.
The gauzy Republican idea that repealing the estate tax will save the family farm is another canard. Farmers can already exempt the first $8 million of whatever holdings they pass on to their heirs. Yesterday a national farmers’ group was joined by US Representative Earl Pomeroy of North Dakota and Bill Gates Sr. to oppose the repeal. Pomeroy, who serves as cochairman of the House Rural Caucus, represents a state that produces a 10th of the nation’s wheat supply. He offered the Democratic alternative that was rejected by the House.
The House passed this costly repeal just days after rejecting a Senate proposal to immediately extend the $400 child tax credit to 6 million poor working families, sending that measure into legislative limbo. Even as the House was voting on the estate tax yesterday, President Bush was appealing to House and Senate leaders to settle their differences on the child tax credit; he may realize that one-sided tax breaks can backfire politically.
Andrew Carnegie and Theodore Roosevelt helped enact the estate tax in 1916 to correct the excesses of the Gilded Age. Today’s Republicans give new meaning to the term ”robber barons.”
This story ran on page A12 of the Boston Globe on 6/19/2003.
© Copyright 2003 Globe Newspaper Company.
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