The latest incarnation of a Republican tax “plan” includes repealing the estate tax. Republicans love to give it an evil connotation by referring to it as “the death tax.” They claim that they want to repeal it to help “family farms and other family owned businesses.”
They are, of course, lying about all of it. The new tax “plan” is not a plan at all: It doesn’t reflect new thinking about taxation; it’s not based on a new theory of economics. It’s just a mishmash of giveaways to America’s richest people [who are also, not coincidentally, the biggest donors to Republican candidates], paid for by hurtful takeaways from lower-income taxpayers. If there’s a philosophy involved, it’s steal from the poor and give to the rich.
But the spin about this being a middle-class tax cut is just one of the big lies Republicans are peddling as they rush their tax bill through Congress, preferably under cover of darkness. The estate-tax gambit is also riddled with falsehoods.
Here’s what Republicans have said about the estate tax:
“For too long, this tax has threatened family-owned businesses—including women- and minority-owned businesses—from being passed down to their children and grandchildren,” says Representative Kevin Brady, chairman of the House Ways and Means Committee. But he is wrong, and not by accident. He is spinning and lying as fast as he can.
So, who actually pays estate taxes? An editorial in today’s New York Times lists three categories of people:
The top 0.2 percent. Some 11,300 American estates—about 0.2 percent—are estimated to be subject to the estate tax this year . The top tenth of income earners pay nearly 90 percent of estate taxes collected, and about one fourth of that total is paid by the richest 0.1 percent…Today, an inheritance must be larger than $5.49 million for an individual, or $10.98 million for a couple for their heirs to be liable for any estate tax at all.
How does your estate measure up? Unless you are Steve Mnuchin, Bill Gates, or Mark Zuckerberg, or
unless you hang out in those circles and share brokers, hedge fund managers and boardroom privileges with them, you’re probably not going to have to worry about your family suffering from an estate tax hit.
Please note, too, that as the New York Times editorial points out, while opponents of the tax say it taxes earnings twice, the fact is that more than half of the biggest estates consist of unrealized capital gains—like stocks that have appreciated without being sold—that have never been previously taxed.
How does that stack up with your stock portfolio? You’ve probably never sold a stock when its value went up, as a way to pay for college tuition or medical bills, right? You don’t need that money. You’ve just let it accumulate. Yeah, right.
A few dozen farmers, and even fewer minority business owners. About 80 family farmers or small-business people would be subject to the estate tax this year, according to the non-partisan Tax Policy Center.
Got that? A whopping 80 family farmers or small-business people. Trump and Paul Ryan would like you to believe that there are “millions,” of struggling ranchers, mom-and-pop grocers and minority contractors who are being harmed by the estate tax. Not true. Obviously, they’re trying to tug at our heartstrings, as we imagine the owners of a neighborhood shop suffering under the burden of the estate tax; but they’re using that false imagery to sell a tax repeal that would benefit only the richest of the rich.
The Times continues: “The biggest winners in an estate tax repeal wouldn’t be day-to-day people. They’d be people like Trump, unless they’re…”
Morons: “Only morons pay estate tax,” Gary Cohn, Trump’s chief economic adviser, told Senate Democrats, meaning, it was later explained,” rich people with rally bad tax planning.” Many of the very wealthy use loopholes, like trusts, to avoid paying inheritance tax.
Nice touch, Gary. Not only are you screwing regular people with many of the provisions of the proposed tax bill, you’re making fun of them at the same time.
The Times editorial concludes with these facts:
An estate tax repeal would provide a tax windfall of more than $3 million apiece for the top 0.2 percent of earners, and more than $20 million for the wealthiest Americans. It would cost $239 billion in revenue over a decade. It offers nothing for middle-class people.