Columns » Ernest Dumas

The cruelest tax

by and

After a week of numbing media images of the human despair that was being hauled from the Deep South and dropped off across the country, the postman brought me an even more frightening warning. It was a personalized letter to us senior citizens from the 60 Plus Association and the National Tax Limitation Committee. If we did not act fast and furiously, we would miss a once-in-a-lifetime opportunity to abolish forever the “cruelest tax” ever known, the levy known as the estate tax that the United States has put on the nation’s richest heirs and heiresses for nearly a hundred years. The thought was chilling. If I did not persuade Arkansas Sens. Mark Pryor and Blanche Lincoln to vote this week to kill the tax, then between 2011 and 2015 these people would have to pay the United States some $280 billion, which would be 15 to 20 percent of the estates that will be willed to them by their dads and moms, uncles and aunts. Compared to that, what are the loss of squalid homes, meager belongings and low-wage jobs that the hundreds of thousands of Gulf refugees must put up with in the months and years ahead? But I did not have to call Pryor and Lincoln and threaten them with political extermination, as the letter asked that I do. Lincoln and presumably lots of Republicans asked the Senate Republican leader, Bill Frist, to welsh on his promise to President Bush, Grover Norquist and the rest of the lobby for rich heirs to call a vote in the Senate this week on the bill to permanently repeal the tax, and late last week Frist caved in. The tax will phase out of existence in 2010 but then go back on in 2011. Bush asked that it be done that way in 2001 so that long-term deficit forecasts would not be so frightening. He assumed that it would be a simple matter for Congress later to make the repeal permanent, but he did not count on the massive budget deficits that would follow Hurricane Katrina. Frist will bring the bill to a vote later in the fall, when the nation’s attention will finally be diverted from the tormenting images of the homeless from Katrina. To repeal the tax now would be, well, inappropriate, as Sen. Lincoln said. She voted for repeal in 2001 and continues to say the tax is bad because it works a hardship on the heirs of plantations and businesses, but she says this is not the most propitious moment to be generous with them. Frankly, it is too bad that Frist knuckled under. It would have been one of those rare alignments of events that illuminate our history and signal a central truth of our time — in this instance, inescapable evidence of the government servicing the undeserving few at the greater risk to the many. That has been the principal story of recent government. So the Senate leadership, presumably with the acquiescence of the Bush administration, will put off relief for heirs and heiresses a few weeks or months and also the deep cuts in medical and housing assistance and other forms of help to America’s expanding lower class, which also were on the agenda for Congress’ return this week. The lobby for repeal of the “death tax” will have to crank up again in a few weeks and put out more television and newspaper advertising and direct mail that are full of lies and distortions. The mass-produced letter from the 60 Plus Association to fellow seniors never tells you what the “death tax” is — a tax paid by the heirs of only a little more than 1 percent of the estates left by people who died. That is according to the latest Treasury Department summary, for 2003. The letter said repealing the tax would not help the rich but only “family farms and businesses.” But the Bush government’s own figures refute that. Family farms and businesses that were passed on to heirs paid very little of the cumulative estate tax for 2003. But a quarter of all the estate taxes paid in the United States that year was from only 505 estates, each worth more than $20 million. The average tax rate was 17 percent, lower than the average income withholding of working Americans. And most of the assets taxed by the “death tax” were unrealized capital gains, which would never be taxed at all without the estate tax. 60 Plus said that we should remind Pryor and Lincoln that Rep. Vic Snyder of Little Rock, the Democratic congressman from Central Arkansas, had joined Republicans and 41 other Democrats in voting to repeal the tax permanently. But that is an awful libel of Snyder, who has never cast a vote to repeal the tax. 60 Plus is a front for all sorts of rich special interests for which it pimps, principally the pharmaceutical companies. It is an offshoot of Richard Viguerie’s right-wing fund-raising apparatus. In the mid-1990s, Sen. David Pryor called 60 Plus and the other Viguerie groups “fright factories” and told people to beware of their distortions and lies. Son Mark may not need dad’s counsel on this one, but Sen. Lincoln for sure could use it.

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