The estate tax agreement is a giveaway to millionaires. Indeed, as the group United for a Fair Economy notes, "The deal (Obama accepted) would make the estate tax even weaker than it was under President Bush, and the weakest it has been in seven decades.""Originally," the group OMB Watch notes, "President Obama had been calling for extending 2009 estate tax levels as a compromise on the issue. An extension of the 2009 estate tax would exempt the first $3.5 million ($7 million for couples) of an estate's value and tax any amount above that at a rate of 45 percent. This proposal was more than generous to the wealthy of this nation, as it would affect less than 1 percent of estates each year."
"The Obama-GOP deal is all about the idle rich," Nichols writes. OMB watch says that the exemption to the estate tax in the Obama-GOP deal represents a "$163 billion check to the nation's richest families" and says "...President Obama has inexplicably agreed to give away the store to Paris Hilton and other heirs to vast fortunes through the evisceration of the estate tax."
Why does this make it an aristocracy tax? Because money is power in the United States. Wealthy people are already the most overrepresented group in Washington, both by lobbyists and elected officials. This, in the case of Republican and Blue Dog Democrats especially, is part of the reason for the bass-ackward economics popular in the capital. Supply-side or "trickle down" economics have failed again and again, but only for the vast majority of Americans. For the privileged few, it's been a gold mine.
"Mr. President, in the year 2007, the top 1 percent of all income earners in the United States made 23.5 percent of all income," Bernie Sanders said in his historic stemwinder last week. "The top 1 percent earned 23.5 percent of all income -- more than the entire bottom 50 percent. That is apparently not enough. The percentage of income going to the top 1 percent has nearly tripled since the 1970s. In the mid-1970s, the top 1 percent earned about 8 percent of all income. In the 1980s, that figure jumped to 14 percent. In the late 1990s, that 1 percent earned about 19 percent."
To put it another way, Berkshire Hathaway CEO Warren Buffet once said, "There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning." At the time, Buffet was pointing out that he pays a smaller percentage of his income in taxes than his employees. "It turned out that Mr. Buffett, with immense income from dividends and capital gains, paid far, far less as a fraction of his income than the secretaries or the clerks or anyone else in his office," the New York Times reported in the 2006 Buffet story. "Further, in conversation it came up that Mr. Buffett doesn't use any tax planning at all. He just pays as the Internal Revenue Code requires."
So, since the estate tax is so low, the wealthy hand off their wealth, and with it their political power, to their heirs -- creating an American aristocracy. That aristocracy is no different than any other aristocracy in history; they're concerned only with their own power and their own freedom. Everyone else, the vast riffraff majority, are just drones.
Nichols recommends that Nancy Pelosi take a tough stand on the estate tax. "If there is pushback, she can toss in some Thomas Jefferson, who warned that America would be ill-served by 'an artificial aristocracy founded on wealth and birth, without either virtue or talents.' Jefferson added that 'provisions should be made to prevent its ascendancy.'"
The estate tax exemptions, as they stand in the Obama-GOP deal, represent another way -- along with the extension of Bush's tax giveaway to the top 2% -- that the rich have been allowed to enrich themselves off the national debt. Worse, it represents a tax on everyone else.
It's not a monetary tax -- although it bumps up your share of the debt and diminishes theirs -- but a tax on your political power and your freedom.
-Wisco
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