According to the Hill, the Dems in the Senate are looking to make an agreement to cut the estate tax in order to get Republicans to vote for small business tax cuts. Awesome. Way to stick it to the Republicans.
You don't really need to follow below the fold. You know the story. Republicans playing hardball. Democrats playing run for the hills. That great senator Lincoln leading an epic quest to make sure the Wal Mart heirs never need to work again.
The estate tax is the single best tax we have. There really should be no arguments on this. It doesn't have any effect on work. Inherited wealth has been shown to have both negative effects on individuals and society.
Here's a few quotes from an old op-ed in the NY Times from Robert Frank:
Among the important advantages of the estate tax is that it has virtually no negative effects on incentives. High income tax rates may discourage effort or investment. But who would become a slacker merely to avoid estate taxes? Because the estate tax enables income tax rates to be lower than they would otherwise be, it actually increases the incentive to invest and take risks.
The estate tax also provides an incentive for charitable giving, which reduces the need to pay for many public services with tax money. Recent estimates by the Brookings Institution and the Urban Institute suggest that its repeal may reduce such giving by as much as $15 billion a year. Finally, having estate taxes means paying lower taxes while we are alive, and taxes are generally more painful to the living than the dead.
Some opponents complain that the estate tax imposes an unreasonable burden on the owners of small businesses and farms. ... Far fewer than 1 percent of heirs will ever pay a penny of estate tax; most of the revenue from estate taxes comes from inheritances larger than $10 million.
... Old money has long been wary of the corrosive effect of guaranteed wealth on children's ability to set out on successful careers of their own - a concern that has prompted Warren E. Buffett and others to limit their bequests to their children. But even if Mr. Buffett were to change his mind, he could still leave an after-tax bequest of more than $20 billion under current tax laws.
Clearly such an efficient tax needs to be gotten rid of!
The stupidity is that the Dems are "bargaining" away an estate tax repeal that will cost at least $200 billion over the next ten years in return for small business tax cuts!
From the Hill:
Senate leaders are working on an estate tax deal to make it easier to move a bipartisan jobs bill.
The deal discussed by Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.) involves moving an estate tax bill through the Senate that would prevent a huge hike in the tax from taking effect in 2011, staffers and lobbyists say.
...
What many Republicans would really like is a vote on a proposal by Senate Minority Whip Jon Kyl (R-Ariz) and Sen. Blanche Lincoln (D-Ark.) that was offered during last year’s budget debate. Their legislation would cap the estate tax at 35 percent on estates worth more than $5 million.
The Republicans are also demanding that infrastructure investments be cut out so its just an estate tax and small business tax bill.
It is also expected to include bonds for state infrastructure projects as well as a one-year extension of highway funding. But Finance staffers say Republicans oppose using revenue for road projects and want the measure struck from the bill. Other staffers say the highway portion of the jobs bill could be paid for by interest that is owed to the trust fund by the general fund.
Why not call the Republicans out! If they want to oppose small businesses, good luck with that!
Oh, right, they're Senate Democrats...