Death and Democrats
Will Senate liberals kill another estate-tax compromise?

Thursday, August 3, 2006 12:01 a.m. EDT

This week the Senate will vote on a political compromise that combines an increase in the minimum wage with a cut in the federal death tax. The bill needs 60 votes to defeat a liberal filibuster, and nearly all of the 55 Republicans are in favor. So we are about to find out if Senate Democrats are more interested in achieving the policy goals they claim to want, or merely in blow-everything-up obstruction.

The same bill passed the House last week by 230 to 180, with 34 Democrats in favor. But in the Senate, Minority Leader Harry Reid professes to be outraged that the GOP would wrap these two issues together, and he's leaning hard on Democrats to vote no. This is the same Harry Reid who complains that the GOP never compromises, and the same Democrats who've been demanding a vote to raise the minimum wage.

We'll concede that this Senate sausage is far from ideal. The increase in the minimum wage--to $7.25 from $5.15 over three years--will cost many of the young and unskilled their jobs. Young black men who lack a high school diploma will be hit especially hard. But frightened GOP "moderates" in the House were already going to surrender on the minimum wage, so at least this package bids to get something good for the economy in return.
The sausage also contains far too many special-interest tax and other breaks--notably a tax rate reduction on certain timber sales, and a provision for mine cleanup and miner health care. But most of these freebies are designed specifically to attract Democratic Senators to finally vote yes. The mining free lunch is for Robert Byrd of West Virginia, and the timber giveaway is for Washington liberal Maria Cantwell.

If Democrats had kept their previous campaign pledges, none of these additional bribes would be necessary. At least a dozen Democrats have campaigned in the past for reform or repeal of the estate tax, including New York's Hillary Rodham Clinton. But somehow when it comes time to be counted, they always find an excuse to vote no. Earlier this year, all but four Democrats voted to defeat repeal, saying they preferred a more modest cut. But when a compromise was offered to a top rate of 30% from today's 46%, they opposed that too. Now that the GOP has compromised one more time, Democrats are again saying no even if it means killing their allegedly prized goal of raising the minimum wage.

The latest compromise is already more than we'd prefer to see. The estate tax would survive, rather than dying for good, meaning that death would continue to be a taxable event. Income already taxed once or twice would be taxed again merely because of the inevitable accident of death. While the top death tax rate would fall to 30% by 2016, if you die in the interim you'd pay as much as 40% if your estate is worth more than $25 million because the cut is phased in. The death-tax-evasion industry--lawyers and insurance companies--will also live on.

On the plus side, estates under $10 million would be exempt from tax beginning in 2016. And estates between $10 million and $25 million would pay a 15% rate. This would help a great many middle-class savers and entrepreneurs who've managed to sock away a nest egg or build a small business over their lifetimes. It would also spare many family businesses from dissolution because heirs must now literally sell the farm to pay the tax.

Opponents claim that only "the rich" pay the estate tax, but many of those people are "rich" only on the occasion of their Earthly demise. These lower rates and higher exemption amounts would also be indexed for inflation under the Senate bill, so the death tax wouldn't creep back to snare the middle class as it did before. Another good provision would repeal the federal deduction for state death taxes, which would put pressure on the liberal states to repeal theirs or lose residents to Florida and other states without one. Federal law shouldn't subsidize punitive state tax policy.

Among the Democrats who should see the wisdom of all this is Hawaii's Daniel Akaka, who faces a tough primary against Democrat Ed Case, who favors estate-tax reform. Soaring land prices on Oahu, as in parts of California and New York, have turned many middle-income Hawaiians into death-tax millionaires. These voters understandably feel that it is unjust and immoral to have to sell their homes or businesses to pay a death tax merely because of where they happen to live. If Mr. Akaka dances to Harry Reid's tune and votes no, he will deserve to lose his seat. All in all, the Senate proposal would help about 90% of the family-owned businesses in America that would otherwise get clobbered by the IRS upon the death of a loved one. As Senator Clinton put it when she was running in 2000, "you ought to be able to leave your land and the bulk of your fortunes to your children and not the government." We'll soon see if she and other Democrats meant it.

http://www.opinionjournal.com/editor...l?id=110008743

Oh what will the Dems do. Will they keep past campaign promises? Or will they cast aside what they've been claiming for years they want......an increase in minimum wage......and break those campaign promises about the estate tax? Oh what to do....what to do? Will they go the way of Dirty Harry?

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"This is a time for a national imperative not to fail in Iraq." Condoleeza Rice, January 11, 2007

Gotta love the irony in Teddy Tubbaguts's statement ending this quote....

Associated Press story

Teddy's no slouch on cowardice or contemptible behavior, so let's all just take him at his words here. But if you want the Washingtonese translation it goes: I'm pissed off I didn't think of it first.

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Delivering tasty bite-sized Clues to liberals since 1965.

You need to remember that many "moderate republicans" represent states that already have higher minimum wages so the increases will make currently lower minimum wage states less attractive to business currently doing business in their states. As such, these republicans have a strong incentive to support the increase.

With respect to the minimum wage, I do no believe the government should artificially manipulate the market, but our government, and many other governments, do it all the time.

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"George W. Bush surrounds himself with smart people the way a hole surrounds itself with a donut." —Dennis Miller

PJ!

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Do you know what it's like to fall in the mud and get kicked... in the head... with an iron boot? Of course you don't, no one does. It never happens. It's a dumb question... skip it.

The fact that billionaires have to pay minimal estate tax is a non-existent problem that simply reflects how totally the right has come to identify itself with the wealthiest Americans while ignoring all others. During the Bush administration the wealthy and businesses have done extremely well. Real income for most Americans is down and poverty higher, as is homelessness and hunger rates. A high preportion of Americans live pay check to pay check while disparity soars out of sight.

Poverty, education/training, and low wages not the tragic plight of the wealtiest Americans are the true problems in America whatever conservatives may believe. Liberals should fight their fetish with America's best off tooth and nail. They should begin by rolling back the vast tax breaks given elites by Bush and use them to reduce poverty and lower wages his administration has resulted in.

The horror that conservatives feel when the incredibly low wages minimum wage workers make is increased marginally is trully sickening. Despite their constant lies, minimum wage increases in recent decades have 1)been associated with higher real income for lower income Americans not lower income and 2)not resulted in higher unemployment among those group. This includes the nineties increase in the national minimum wage and the series of state minimum wage increases in recent years. There are a variety of studies that show that.

Raising wages for lower income groups should be our ideal - not something seen as a problem. Indeed raising lower income pay should be our highest single objective along with reducing poverty, and rolling back disparity to its pre-Reagan days. Not eliminating estate taxes, or dividend taxes, or exporting all our decent paying jobs abroad, or raising corporate profits or rate of return on billionaries investments.

In fact, their crocdile tears for the poor they coulld care less about simply reflects their understanding that paying lower income groups more would hurt groups they do care passionately about, the wealthy and businesses which lose profits as lower income groups make a better living. But Americans are getting sick and tired of a movement which does zip for average Americans and leads to the greatest increase in disparity in US history.

That is why 70-80 percent of Americans support minimum wage increases and why they have stoped paying attention to the, factually incorrect, arguments that minimum wage increases or wage increases generally hurt workers. They don't, their is at least a decade of studies that show the exact opposite. Contrary to what Republicans argue, paying workers more and decreasing disparity makes workers better off not worse off.

The wealthiest Americans and buinesses are going to have to start finally having to share the wealth with average Americans once Bush leaves office and conservativism declines. They are going to scream and hollar about a system that cares about anyone but elites - buts its going to happen anyhow..

The good things about the modern divide between conservatives and liberals, is that there are clearly different policies - the conservative one tightly focused on the well being of elites and business and the liberal one focued on fighting poverty and low pay for average Americans as well as rolling about the increase in disparity that conservative policies have created. So Americans have clear choices - we can concentrate on things like eliminating estate taxes - paid exclusively by the top two percent of Americans - or we could focus on raising pay for average Americans or reducing poverty.


Since Bush took office, poverty, homeless and hunger rates, are up and real income for median Americans down. Business profits have reached the highest levels in US history and elite income is doing very well. Estate taxes and the well being of elites are not America's true problems right now....

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Paranoia strikes deep
Into your life it will creep
It starts when you're always afraid
You step out of line, the man come and take you away

In case you missed this, market systems in the US are the worse enemy average and lower income Americans every had. They have resulted in some of the most difficult periods in terms of income growth and poverty levels since the modern US economy began. While business income and that of elites soared in the market dominated era beginning in 1981 poverty rates increased significantly as did homelessness and hunger and wages stagnated. As a result disparity soared. During the Bush "boom" real wages for median wage earners actually fell and poverty increased.

Markets are great for businessmen interested in low wages and the wealthy. They are a disaster for everyone else. And of course for the environmental protection which has suffered a long series of major reverses under the banner of free markets such as gutting the grandfather clause, rolling back major protections of the land in the West, and entirely ignoring global warming.

Which is why in a few years the US public - increasing becoming more egalitarian and concerned with the environment is going to react harshly against them. Probably to harshly, a mixed system works best, but we swing from extreme to extreme.

__________________
Paranoia strikes deep
Into your life it will creep
It starts when you're always afraid
You step out of line, the man come and take you away

How much estate tax do you think billionaires should have to pay?



How much do you think a 16 year old in his first job be paid?

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Do you know what it's like to fall in the mud and get kicked... in the head... with an iron boot? Of course you don't, no one does. It never happens. It's a dumb question... skip it.

http://www.opinionjournal.com/column.../?id=110008699

In the 2 1/4 years before the 2003 tax cuts, economic growth averaged 1.1% annually; in the three years since it has averaged 4% per year, and in the first quarter of this year it was 5.6% on an annualized basis. Inflation-adjusted per capita GDP has grown 7.8% from 2003 through the first quarter of this year.

According to the government's establishment survey, in the 36 months since the tax cuts became law, 5.3 million new jobs have been added to the economy. According to its employment survey, 288,000 jobs were added in May and 387,000 in June. The unemployment rate dropped from 6.1% when the bills were signed to 5.4% at the end of 2004 and 4.6% today, and the rate has gone down for men, women, blacks and Hispanics. Hourly wage rates for workers are up 3.9% in the past year, and they increased at an annualized rate of 4.6% in the second quarter of this year, the highest quarterly rate in nearly 10 years.

Incomes are up too. As Stephen Moore noted in The Wall Street Journal, "the percentage of Americans earning more than $50,000 a year rose from 40.8% to 44.2%" between 2002 and 2004. As for very wealthy families, the portion of total income "captured by the richest 1%, 5% and 10% of Americans is lower today than in the last year of the Clinton administration."

All this has been good news for the government. Federal tax receipts increased by 15%-- $274 billion--last year and 13%-- $206 billion--in the first nine months of this fiscal year, which, as the Journal points out, means the nine-month increases for the past two years represent the highest growth rates in 25 years. Looking ahead to the end of this fiscal year, total inflation-adjusted government receipts will likely be 23% above 2003 when the Bush tax cuts were signed into law.

Reducing the capital gains tax rate from 20% to 15% increased capital gains tax receipts by 79% from 2000 to 2004. Cutting the dividend tax rate by more than half--from 39.6% to 15%--increased dividend tax receipts by 35% from 2002 to 2004. And corporate tax receipts have nearly tripled since 2003, reaching $250 billion for the past nine months, 26% higher than the same period last year.

Tax cuts work, and work well, for individuals, employers and even the government, which sees its revenues increase dramatically when tax cuts are enacted and left in place over time.

State governments are coming to the same conclusions. Rhode Island Democrats came to realize their 9.9% top income tax rate--the third highest in the nation--was costing the state business and jobs, so they teamed up with their Republican governor to enact a flat-tax option: pay 7.5% (which phases down to 5.5% over time,) without deductions, instead of 9.9% with them.

Arizona's Democratic governor, Janet Napolitano, signed a 10% across-the-board income tax rate reduction. Oklahoma has reduced its income tax rates by 20%, and New Mexico's Democratic governor, Bill Richardson, cut his state's top rate from 8.2% to 4.9% and its capital gains tax rate in half. Experience has shown that such reductions will be very good for these states' economies. In the late 1970s, when Delaware had the nation's highest personal income tax rate at 19.8% (and also its lowest credit rating and second highest unemployment rate), it began reducing top tax rates down to 5.95%. Over 20 years income-tax revenues increased in every year but one, and became 300% greater than they had been.

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A leader, once convinced a particular course of action is the right one, must have the determination to stick with it and be undaunted when the going gets rough -- Ronald Reagan

Nothing in the WSJ article says anything about my points. That most Americans earn less (the median income is 28 thousand not 50 which is about the top ten percent of wage earners I would guess) or that poverty, hunger, and homeless rates have increased under Bush. All of which in fact are true.

If business profits and what those who earn above 50 thousand dollars is what is important to you than Bush is the way to go. If the bulk of the population is then its been a bum ride. I sympathise with lower income Americans not the elites that the WSJ and conservatives generally focus on.

12th man In answer to your question. The rate before Bush works for me, it was still very little. But my real point is that the fact that the wealthiest Americans pay minimal estate taxes is not the critical issue of our era. Its low wages and high poverty for far too many Americans. The wealthy are doing extremely well, most Americans are not.

That conservatives ignore disparity, stagnating wages for most and higher poverty and hunger to focus on estate tax relief which is paid exclusively by the top two percent is about all that one needs to say about their movement. Its like focusing on building more lakes in MN while ignoring the needs for water in the Gobi.

Its not the rich that are struggling, whatever conservatives believe and reducing taxes on them or increasing their income is not the burning issue of our day. Feeding hungry children, dealing with the ever growing number of Americans without adequate health care, and raising lower income wages is.

__________________
Paranoia strikes deep
Into your life it will creep
It starts when you're always afraid
You step out of line, the man come and take you away

Agree. And like the article points out......setting an arbritary minimum wage only hurts the young, uneducated person trying to find a job.

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"This is a time for a national imperative not to fail in Iraq." Condoleeza Rice, January 11, 2007