Fans lost a lot of money betting on Manny Pacquiao. Millions betting on any horse other than Pharoah to win the Kentucky Derby lost lots of money. But no politician ever lost a dime betting on the eagerness of American voters to be manipulated.
The latest example is the U.S. House of Representatives vote to repeal the “death tax,” once called the “estate tax.” Most won’t recognize the term “estate tax.” When Newt Gingrich took out his “Contract on America” in the 90s, pollsters advised him that the average “Joe” understood “estate” taxes applied only to the very rich. They didn’t mind the tax being applied to those who had accumulated exorbitant wealth.
Without changing their objective of helping the rich get richer, they changed the terminology. The estate tax became the “death tax.” Poll responders reversed themselves. The manipulated became convinced by the change that the tax applied to them. After all not everyone leaves a taxable estate but everyone dies.
You’ve heard of the accumulation of wealth among the 1%? According to Wall Street Journal columnist Jonathan Clements, the so-called “death tax” effects less than two-tenths of the one percent, meaning 99.8% of taxpayers cannot be taxed under existing law. Those in the middle class who are cheering the repeal need to know what a belly-laugh the .002% is getting in their mansions.
The most appropriate term for this tax is “the billionaire’s tax.” It would reasonable to guess that not one of this newspaper’s readers would be taxed under the law your congressmen voted to repeal. The Tax Policy Center documented only 20 small businesses and farms nationwide owing estate taxes in 2013. Those 20 estates owed just 4.9%.
Since then, the exemption has been increased. No estate with less than 5.4 million dollars is taxed. If you have smart tax advisers, as the grossly wealthy tend to have, that number is closer to 11 million.
That eleven-million dollar threshold comes only after wealthy taxpayers take deductions, including gifts to children and charity and purchasing life insurance, which passes the benefits along with no estate tax.
After exemptions and loopholes, when the top two-tenths of one percent eventually have to pay an inheritance tax, their heirs still keep the eleven million plus 65% of the remainder. Not a bad haul for the children of the super rich.
Where does the estate tax idea come from? Not from liberals but from the Founding Fathers and other conservative Americans. Teddy Roosevelt supported a tax on inheritances saying, “No man should receive a dollar unless that dollar has been fairly earned.” In “The Wealth of Nations,” Adam Smith wrote, “When…great estates derive their security from the laws of their country, nothing can be more completely absurd. They are founded upon the most absurd of all suppositions, the supposition that every successive generation of men have not an equal right to the earth.” Seems like orthodox conservative philosophy.
Wyoming has a unique place in the history of the billionaire’s tax. When Mike Sullivan was Governor in the 90s, our state was in fiscal trouble. Going through a “bust” cycle, Wyoming was experiencing draconian budget cuts and appeared unable to balance its budget. Then a wealthy Jackson resident suddenly passed away leaving such a large estate that Wyoming was entitled to share the estate tax payment with the IRS. Governor Sullivan later said, “We balanced the budget because a lady who died in Jackson left a $20 million estate tax, and that saved us for that budget period.”
Since then, Republicans in the state house and congress made sure that won’t happen again. They repealed the laws making that possible.
The clamor to rid America of the billionaire’s tax started more recently as the greedy decided they just couldn’t get enough. This is about helping the Koch Brothers and their buddies. Their children will reap the reward. Yours will get to make up the 269 billion dollar loss to the treasury that the repeal will cost.