Wednesday, August 31, 2005

Patriotic Tax

The Moose hopes that, amidst war and perhaps the worst natural disaster in American history, Congress is surely not going to cut taxes for the most fortunate among us.

When Congress returns, one of the anticipated objectives of the GOP is the preservation of estate tax cut. Before the recess, it became clear that the Republicans lacked the votes for a permanent repeal of the blessed sacrament of the GOP - the death of the death tax. The prospect of a Democratic filibuster put an end to the Republican hopes to permanently assist trust fund heirs.

The dilemma for the party of plutocracy was that the full estate tax comes back from the dead in 2011 unless Congress takes action,

"Bush's first tax cut, enacted in 2001, began cutting the rate on the estate tax. For tax year 2005, the rate is 47 percent on estates worth more than $1.5 million. The tax bite will fall gradually according to the 10-year plan with the rate dropping in 2009 to 45 percent for estates worth more than $3.5 million. In 2010, the estate tax disappears entirely, but it reappears one year later at its original rate of 55 percent."

Instead of a full repeal, the Republicans are now hoping for a permanent reduction in the tax. While there is consensus that there should be some reform in the tax, Republicans are attempting to significantly eviscerate the tax.

For years, the GOP has been conducting a mendacious and sophisticated campaign to eliminate the estate tax. They have falsely claimed that the tax results in the loss of family farms and small businesses. However, the truth is that the tax, with rare exceptions, is profoundly progressive and only hits the ultra-rich.

Interestingly, the estate tax is a vestige of war - it appeared both during the Spanish American War and World War I. At this time of war and an unprecedented natural disaster at home, Democrats should frame the estate tax as a "Patriotic Tax." After all, Republicans got great traction from calling it the "death tax."

It is now clear that Uncle Sam will have to spend billions in the rebuilding of the gulf states along with the ongoing costs of the war. Given these circumstances, it is truly inconceivable that even this Republican Congress will continue to shower more blessings on the rich. But then again, the chutzpah of the defenders of the comfortable is limitless.

We have also learned that the supply-siders were wrong that their tax cuts for the wealthy would lift all boats. Poverty is up and wages are stagnant.

The New York Times,

"Even as the economy grew, incomes stagnated last year and the poverty rate rose, the Census Bureau reported Tuesday. It was the first time on record that household incomes failed to increase for five straight years.

"The portion of Americans without health insurance remained roughly steady at 16 percent, the bureau said. A smaller percentage of people were covered by their employers, but two big government programs, Medicaid and military insurance, grew.

"The census's annual report card on the nation's economic well-being showed that a four-year-old expansion had still not done much to benefit many households. Median pretax income, $44,389, was at its lowest point since 1997, after inflation."

Given the national crisis at home and abroad, is it too much to ask that the President restrain the plutocratic interests within his party on behalf of the national interests? Don't count on it.

After all, the donors must be reimbursed.

-- Posted at 8:38 AM | Link to this post | Email this post