A bid to permanently repeal the federal estate, or inheritance, tax lost to a Senate filibuster Thursday. A compromise that would tax inheritances at a lower rate than previously is still possible, however. The tax has been in phase-out mode since 2001 and on its current course would disappear in 2010, only to reappear the following year. (Think of the incentives that creates.) The possibility of repeal had Big Government folks (the Bee Gees) beside themselves because it would "cost," that is, deny the social engineers, $600 billion over ten years starting in 2011. . . .That people actually own the money they make, and have the right to distribute it to their heirs, is conveniently ignored by tax defenders.See the rest of my column here at the Foundation for Economic Education website.
Cross-posted at Liberty & Power.
This is one of those things that gets back to the whole "step in the right direction" can of worms about what to cut first.
ReplyDeleteI certainly consider the inheritance tax something that needs to go with the rest of government. But I question the motives of Republicans whose top priority is cutting taxes on returns from accumulated wealth, while shifting them onto the returns of labor instead: inheritance, capital gains, property. It's especially bad in the demagogic campaigns they run to eliminate the property tax, while replacing it with a sales tax on groceries and medicine.
Kevin, I agree with you that apparent steps in the "right direction" often are anything but. This can make it difficult to judge whether a change is good or bad. See my follow-up here.
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