Political Skullduggery

The politics surrounding the proposed repeal of the estate tax (or as the GOPers call it, the "death tax") has come down to two competing versions.

One favors the mega-rich, and exempts all wealth from the estate tax. The other plan exempts only (only?) the first $10 million of wealth and reduce the tax liability of everything over that from the claws of the IRS.

Senate Republicans are divided over whether to eliminate altogether the estate taxes on a small group of U.S. multimillionaires or just sharply reduce their tax liabilities at death.

Senate Majority Leader Bill Frist, a Tennessee Republican, will push this week for a permanent repeal of the tax, which is being temporarily phased out under President George W. Bush's 2001 tax cuts. The Senate is scheduled to begin debate on repeal today and may hold a first vote on the measure tomorrow.

Charles Grassley, the chairman of the Senate Finance Committee, said yesterday that Republicans are three or four votes shy of winning full repeal. He said they may be able to muster the 60 votes needed to pass an alternative measure that would exempt $10 million of a couple's estate from the tax. The plan would subject any amount above that to a 15 percent rate, or 31 percentage points lower than the current top rate of 46 percent...

The bipartisan congressional Joint Committee on Taxation estimated in 2005 that repealing the estate tax would cost the federal government more than $71.6 billion a year in lost revenue by 2015; the Treasury Department estimates the revenue loss at $65.8 billion that year. The alternative proposal to reduce the tax, championed by Arizona Republican Jon Kyl, would cost about $50 billion a year, according to the Tax Policy Center, a non-partisan Washington research institution...

Republican lawmakers refer to the levy as a ``death tax'' and hope that abolishing or reducing it will boost their appeal with voters in the closely contested November congressional elections. Although fewer than 1 percent of families are subject to the tax, critics such as Kyl say many small-business owners spend hundreds of thousands of dollars on lawyers and life insurance premiums to avoid paying it...

A few Republicans such as Senator George Voinovich of Ohio say they will vote against repealing the levy because of the ballooning government deficit, which is projected by the Congressional Budget Office to be about $300 billion this year. "We need the money," Voinovich said. "We can't afford to lose a dime right now. What we ought to be doing is asking for a temporary tax increase to pay for the war."...

Other Republicans who have opposed repealing the estate tax in the past include Arizona Senator John McCain, Maine Senator Olympia Snowe, and Rhode Island Senator Lincoln Chafee.

Proponents of keeping the tax include billionaire Warren Buffett, the chairman of Berkshire Hathaway Inc., and Bill Gates Sr., the father of Microsoft Corp. Chairman Bill Gates, the world's richest man.

It will be hilarious to see working-class Republicans defend the repeal of the "death tax." They must not realize that the ballooning federal deficit caused by lining the pockets of the rich will have to be paid back over the next decades by the children and grandchildren of the average American worker.