Final repeal of the estate tax is high on the agenda of the White House and congressional Republicans. It has already passed the House, but vote counters are not sure if they have 60 votes in the Senate to avoid a filibuster. This has emboldened estate tax supporters, who want to keep it alive in any way possible.
There is a lot of pressure to resolve the issue one way or another this year. Under current law, the estate tax is repealed for one year, 2010, but then comes back again in 2011. This nonsensical law is the result of Senate budget rules that prohibited enactment of permanent repeal in 2001. But the result is to make it almost impossible to do estate planning, since no one has any idea of what tax regime will really exist after 2010. Even many of those who support repeal are willing to keep it with lower rates and a higher exemption if they can get some permanence in return.
Estate tax supporters are desperate to keep the estate tax in some form or another because they know it will be harder to reinstate after it has been out of existence for some time. As long as the tax exists, rates can more easily be raised back up to confiscatory levels the next time Democrats are in power.
One part of the liberal campaign to save the estate tax is to make it seem as if the only people who favor repeal are a few rich people who have bought off Congress with campaign contributions. This is the theme of two recent books: "Death by a Thousand Cuts" by Michael Graetz and Ian Shapiro, and "Wealth and Our Commonwealth" by Bill Gates Sr. and Chuck Collins. (Gates is father of the Microsoft guy.)
The problem with this theory is that public opinion polls have long shown that most people don't like the idea of restricting inheritances. As long ago as 1935, 52 percent of Americans thought there should be no limit whatsoever on the amount of money that people are allowed to inherit, including 47 percent of self-identified poor people.
Ever since people were first asked about abolishing the estate tax, strong majorities have favored repeal. A Wirthlin poll in August 1999, well before the estate tax repeal effort really got going, found that 70 percent of people favored phasing out the estate tax -- 50 percent strongly and another 20 percent somewhat. In August 2000, a Pew Research Center poll found 71 percent of people supporting elimination of the inheritance tax -- 28 percent saying they favored it and another 43 percent saying they strongly favored the idea.
Bruce Bartlett is a former senior fellow with the National Center for Policy Analysis of Dallas, Texas. Bartlett is a prolific author, having published over 900 articles in national publications, and prominent magazines and published four books, including Reaganomics: Supply-Side Economics in Action.
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