The U.S. Senate today failed to fully repeal the estate tax. As with the gay marriage amendment vote yesterday, proponents of eliminating what many have called the most progressive of all American taxes fell shorter than expected with 57 votes, mostly along party lines. Sixty votes were needed for cloture.<\/p>\n
And as they did with the marriage amendment yesterday, key mainstream media helped Republicans by repeating their spin. The AP<\/a>:<\/p>\n WASHINGTON \u2014 Senators voted Thursday to reject a Republican effort to abolish taxes on inherited estates during an election year with control of Congress at stake.<\/p>\n GOP leaders had pushed senators to permanently eliminate the estate tax, which disappears in 2010 under President Bush’s first tax cut, but rears up again a year later.<\/p>\n A 57-41 vote fell three votes short of advancing the bill. Senate Majority Leader Bill Frist, R-Tenn., said the Senate will vote again this year on a tax that opponents call the “death tax.”<\/p><\/blockquote>\n Reuters<\/a>:<\/p>\n WASHINGTON (Reuters) – The U.S. Senate on Thursday killed a bill backed by President George W. Bush that would have permanently repealed estate taxes.<\/p>\n The Senate vote of 57-41, mostly along party lines, was three shy of the 60 needed for the measure to advance. The House of Representatives had previously passed a bill to wipe out what Republicans call the “death tax.”<\/p>\n Republican backers had acknowledged they were short of votes for full repeal, but they had hoped for an election-year debate and planned to offer an alternative that would have reduced the tax rate and exempted all but the wealthiest estates from the tax.<\/p><\/blockquote>\n The New York Sun even put the GOP spin in its headline<\/a>. <\/p>\n It\u2019s one thing to allow the GOP to call it a \u201cdeath tax;\u201d it\u2019s something else when the media does it for them. Would they call it the \u201cInherited Wealth Tax,\u201c \u201cFuture Investment Tax,\u201d \u201cCommon Good Tax\u201d or any other name those of us who support the tax would have it? <\/p>\n Today, on the Diane Rehm Show, the discussion<\/a> on the estate tax included Chris Edwards of the Cato Institute arguing for repeal. He said it \u201csuppresses savings and investment and business growth.\u201d But that\u2019s hogwash<\/a>.<\/p>\n A recent Congressional Research Service report found that the estate tax\u2019s net impact on private saving is unclear \u2014 it causes some people to save more and others to save less \u2014 and that its overall impact on national saving is likely quite small. “[I]f the only objective [of eliminating the estate tax] were increased savings,” the report concluded, “it would probably be more effective to simply keep the estate and gift tax and use the proceeds to reduce the national debt.”<\/p><\/blockquote>\n Edwards goes on to say that it\u2019s \u201ca tax on wealth accumulation, which means savings.\u201d You would think Rehm would call him out on that. It\u2019s foolish. Accumulating yachts and mansions isn\u2019t savings; it\u2019s consumption. That\u2019s what they\u2019re passing on.<\/p>\n Edwards also said small business owners won\u2019t work as hard to develop their business if they can\u2019t pass it on. Again, there is no proof of that. While people certainly build businesses to make money, entrepreneurs are also driven to \u201csucceed.\u201d The hard work and success are ends in themselves to many; they don\u2019t set a dollar goal and then quit when they get there. How many people have you known who say, \u201cI\u2019m going to stop working because I don\u2019t want to give anymore to the government\u201d? It\u2019s absurd.<\/p>\n Edwards made the same tired arguments about families selling their farms to pay the tax. Leonard Burman of the Urban Institute pointed out that there are already \u201cvaluation discounts\u201d in the tax law that help farmers and small business owners protect their businesses. <\/p>\n Edwards later complained how farmers must pay lawyers to help them avoid the tax. So do they pay it or avoid it? If they have a way to avoid it, elimination of the estate tax unnecessary.<\/p>\n Burman also said the estate tax \u201ctaxes income that was never taxed during people\u2019s lives.\u201d Maybe tax lawyers can explain that one to me.<\/p>\n Nevertheless, yesterday\u2019s short item<\/a> on NPR\u2019s \u201cAll Things Considered\u201d provided the best framing for this issue, despite the host\u2019s using \u201cdeath tax\u2019 in the intro. Nelson Aldrich, author of Old Money: the Mythology of American Wealth<\/em>, was interviewed. His namesake was a U.S. senator, whose daughter married John D. Rockefeller.<\/p>\n Aldrich argues that inherited wealth contradicts the American value of the \u201cself-made man\u201d and the idea of \u201cstanding on your own two feet.\u201d Americans generally don\u2019t value \u201cold money.\u201d<\/p>\n Maybe we should heed the words of Andrew Carnegie who said, “I would as soon leave to my son a curse as the almighty dollar.” The context<\/a> of the quote is useful.<\/p>\n Why should men leave great fortunes to their children? If this is done from affection, is it not misguided affection? Observation teaches that, generally speaking, it is not well for the children that they should be so burdened. Neither is it well for the state. Beyond providing for the wife and daughters moderate sources of income, and very moderate allowances indeed, if any, for the sons, men may well hesitate, for it is no longer questionable that great sums bequeathed oftener work more for the injury than for the good of the recipients. Wise men will soon conclude that, for the best interests of the members of their families and of the state, such bequests are an improper use of their means. <\/p>\n It is not suggested that men who have failed to educate their sons to earn a livelihood shall cast them adrift in poverty. If any man has seen fit to rear his sons with a view to their living idle lives, or, what is highly commendable, has instilled in them the sentiment that they are in a position to labor for public ends without reference to pecuniary consideration, then, of course, the duty of the parent is to see that such are provided for in moderation. There are instances of millionaires’ sons unspoiled by wealth, who, being rich, still perform great services in the community. Such are the very salt of the earth, as valuable as, unfortunately, they are rare; still it is not the exception, but the rule, that men must regard, and, looking at the usual result of enormous sums conferred upon legatees, the thoughtful man must shortly say, “I would as soon leave to my son a curse as the almighty dollar,” and admit to himself that it is not the welfare of the children, but family pride, which inspires these enormous legacies. <\/p><\/blockquote>\n The narrative for the inheritance tax, then goes something like this:<\/p>\n Americans have always believed in the self-made man. Each of us should contribute to society and reap the rewards, including money, when we do so successfully, lawfully and morally. But even then, we must recognize that when we succeed financially, there is likely to be a large role that American society has played in helping us become rich. Americans support schools and universities with their tax dollars. American workers provide the labor that make businesses succeed. Our transportation, communications and energy systems are supported by American tax dollars. <\/p>\n Therefore, it seems at the end of our lives, while we should certainly be allowed to pass on enough money to help the next generation get started in their own quest to contribute to society, we should repay society and help all Americans achieve the same dream. But that next generation isn\u2019t entitled to massive wealth they had no role in earning.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":" The U.S. Senate today failed to fully repeal the estate tax. As with the gay marriage amendment vote yesterday, proponents of eliminating what many have called the most progressive of all American taxes fell shorter than expected with 57 votes, mostly along party lines. Sixty votes were needed for cloture. And as they did with… Read More<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"http:\/\/griendling.com\/wordpress1\/wp-json\/wp\/v2\/posts\/582"}],"collection":[{"href":"http:\/\/griendling.com\/wordpress1\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/griendling.com\/wordpress1\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/griendling.com\/wordpress1\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/griendling.com\/wordpress1\/wp-json\/wp\/v2\/comments?post=582"}],"version-history":[{"count":0,"href":"http:\/\/griendling.com\/wordpress1\/wp-json\/wp\/v2\/posts\/582\/revisions"}],"wp:attachment":[{"href":"http:\/\/griendling.com\/wordpress1\/wp-json\/wp\/v2\/media?parent=582"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/griendling.com\/wordpress1\/wp-json\/wp\/v2\/categories?post=582"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/griendling.com\/wordpress1\/wp-json\/wp\/v2\/tags?post=582"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}