Tastes Like Chicken: The Estate Tax

June 8th, 2006

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This year, three Floridians were attacked and killed by alligators. It made national news – in fact, it was a bit of a national obsession for a few days. There were all sorts of helpful tips published by reputable newspapers about how to avoid a ‘gator attack. (Tip #1: Avoid remote swampy tropical areas.) But the truth is that most people will never see an alligator, let alone die from one. In fact, your chance of being felled by an alligator is about the same as your likelihood of having to pay the estate tax this year. You see, the estate tax – excuse me, the DEATH tax – that the conservative leadership is gunning to repeal applies to people deep into the 2-comma income range. That is, people who have more money when they die than I will earn over an entire lifetime (not that I am bitter about it).

If there was ever an issue that shows why we need change in Washington, this is it. The estate tax repeal, as Senator Reid pointed out, benefits 2 out of every 1,000 dead folk. Yet it costs us live folk about one trillion dollars (that’s four commas) over ten years.

So what’s going on here? You see, conservatives and progressives hold a different philosophy on the economy. Conservatives believe that the very wealthy are the engines of the economy, and by giving them more tax benefits, the things that very wealthy people buy will eventually help out the rest of us. Thus, a one trillion dollar tax break reserved only for those with more than $3 million in net wealth fits into their view about how best to help our economy.

Progressives hold a different view. We believe that the engine of the economy is the middle-class and that if tax benefits go to the middle-class through a college tax credit, for example, all of America does better. It’s a difference in philosophy. Add to that the conservative belief that “deficits don’t matter” and you can understand brushing aside the progressive argument about red ink and busting future budgets.

So you see, it’s not really important that the likelihood of paying estate tax is akin to becoming ‘gator bait. It’s a philosophical difference about what is best for America. So tip #2 is change the leadership in Washington. You’ll save a trillion government dollars, and the likelihood of ever paying the estate tax or losing your life to an alligator will remain extremely remote.

See our Talking Points Memo on the debate.