|June 7, 2006|
Repulsive Repeal of the Estate Tax
Reveals Real Bush Agenda, Media Bias
A BUZZFLASH READER CONTRIBUTION
The proposed repeal of the estate tax by the Bush Administration and its allies, especially at a time of record deficits and massive roll-backs in taxes already granted to wealthy citizens and large corporations, poses a major threat to American democracy.
Ridding the US of the estate tax will open the door for the consolidation of an American aristocracy based on inherited wealth, easily able to steer government policy away from the needs and interests of the vast majority.
Ironically, one of the offspring of one of America’s wealthiest families, Richard Rockefeller, has passionately warned us about the impact of this cynical move. As he points out June 1 in The Portland, “The timing of this vote couldn’t be more bizarre. Our nation is at war and faces a multi-trillion-dollar national debt for decades to come. We are rebuilding our Gulf Coast after one of the worst national disasters in modern memory. At the same time, our country is experiencing unprecedented levels of wealth inequality.”
The vote on this will come before the Senate in June. The House has already approved a permanent repeal. But the repeal is encountering resistance from Mr. Rockefeller and other unlikely allies such as Bill Gates, Sr., Warren Buffett, and Paul Volcker. They all believe that as America’s wealthiest people, it is their duty to speak out against repeal and the resulting leap in the nation’s inequity and even greater deficits. They all agree that the estate tax encourages dispersion of wealth, rather than a build-up of concentrated wealth and power in the hands of a few. They see repealing this democratizing influence as particularly threatening at a time of mega-salaries that are far in excess of those only 25 years ago.
The repeal of the estate tax has been part of a tightly woven attack on tax policy as a progressive instrument to promote social justice, instead substituting a policy of reinforcing and enlarging the wealth held by the nation’s richest families. In effect, repeal will lay the groundwork for establishing an American royalty. Along with the utter lack of evidence to make the case for repeal, it is shocking that these radical tax policies can be seriously considered when the polls show the public favoring policies to strengthen public services, health (e.g., a Business Week poll show 67% support for a single-payer health plan), and education.
Bush policies work in the opposite direction, to shrink the possibility of effective government services that earn public support. When government is under-funded, the resulting services are limited or tragically incompetent (eg. Hurricane Katrina) and earn contempt or cynicism about the government’s capacity to assist ordinary citizens.
In this particular case, the proponents of repeal have spent millions of dollars to create myths, not the least of which is the misnomer “the death tax”. They have tried to make it appear that the estate tax is an attack on the family farmer and the small-business owner. This highly effective and carefully developed multi-million dollar campaign against the estate tax has been driven by 18 of America’s wealthiest families including the owners of Wal-Mart, Gall wines, Campbell’s soup, and Mars candy bars (combined net worth: $185.5 billion). Elimination of the estate tax will save these 18 families alone about $71.6 billion.
The 18 families and their Republican allies have tried to portray the estate tax as an unfair attack on the family farmer. Yet even the right-leaning American Farm Bureau and the Bush White House have been able to produce a single case to back of their claims, as elaborated by David Cay Johnston in his valuable book Perfectly Legal.
The threat is much greater than repeal of this one tax. The sustained Republican PR campaign—waged through their wide-ranging “echo chamber” of FOX News, rightist dailies, and talk-radio shows-- and their domination of Congress has allowed them to proceed with a tax agenda that continually favors a tiny percentage off wealthy Americans to the detriment of the average citizen. Just this May, Congress extended a tax cut on unearned income that will provide a whopping $3 to families earning under $50,000, $78 to those making $50,000 to $75,000 and $60,000 to the fortunate few hauling in more that $1 million (5/18/06 Citizens for Tax Justice release.) Thus, moderate-income families will gain enough for another Big Mac and fries or maybe even a couple of tanks of gas, while millionaires and billionaires will be able to purchase another new Lexus each year.
This regressive move in tax policy has been assisted by the lack of vision on the part of most Democrats. Even at the beginning of this struggle, Democrats acquiesced to proposals that were only slightly less regressive than those posed by the Republicans. The Democrats in Congress have continually accepted the basic assumptions of much of the tax-cutting agenda. For example, they have not forcefully challenged the capital-gains cuts. How is it fair or sensible to tax unearned income at a lower rate than earned income? It is staggering that a democratic country chooses to reward wealthy people who sit around making trades, even selling stock short, over those who toil for a living.
At the same time, the major media have shamefully failed us on clarifying issues of tax policy, especially on the estate tax. This is clearly one area where the increasingly corporatized media have a deep conflict of interest in their news coverage. Policies that are favorable to media CEOs and their biggest stockholders clash directly with the interests of their reading public. The tax-justice issue probably generates more visible conflicts of interest by major media than most other arenas of public policy.
Without truly objective and probing coverage, tax policy becomes the victim of the spin aggressively marketed through the right-wing media machine. In reality, the estate tax affects a microscopic ¼ of 1% of all taxpayers, but it will add approximately $1 trillion to the federal treasury over 10 years. Clearly, stakes are momentous at a time of increasing deficits and debt for the country.
But without comprehensible reporting by the major media and a consistent, coherent message from the Democrats, the public loses its ability to focus on how the estate tax’s repeal will be ruinous both for our fiscal health and the foundations of democracy.
A BUZZFLASH READER CONTRIBUTION
Roger Bybee and Carolyn Winter are Milwaukee-based writers and activists.
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