(5/1/2008) Permanently repealing the estate tax indicates misplaced priorities and forgotten lessons from the past. If you want to destroy our democracy, repealing the estate tax is how you do it. Repealing the estate tax will cause opportunities to disappear like a drop of water in a hot oven. Nothing will trickle down and everything will get sucked up. America's billionaires will horde all their wealth, monopolize opportunity, exploit our labor, rob our government, and kick our asses if we even look like we are stepping out of line.

Do we want a democracy in America, or do we want all our country's wealth concentrated into the hands of a few inheritance rich spoiled brats (plutocracy)? Because that is the choice we are currently facing with the current estate tax debate.

The Republican controlled House of Representatives recently passed a bill that repeals the estate tax (5/2005), and then it went to the Senate and was killed by the Democrats. The Senate could not pass this bill because the Democrats will stop it dead, and the Republicans don't have the 60 votes necessary force it through. President Bush repealed the estate tax in his first tax cut bill (2001), but those tax cuts sunset in 2011.

Every since Bush stole his way into office in 2000 he has spent a huge amount of his time and energy trying to trick the American people into supporting his idea of making his 2001 tax cuts permanent, which would permanently repeal the estate tax. This has also been the primary focus of the the Republicans in Congress during the past seven plus years. During Bush's last press conference (4/27/2008) he must have said "Congress should make the tax cuts permanent" a half dozen times as the solution to almost all the different problems out society faces. I know he is full of shit, but does the rest of America? What he is really saying is "repeal the estate tax for the benefit of my mega billionaire Texas friends". 

Many people are confused about the estate tax because the GOP has deliberately confused them. The GOP calls the estate tax the "death tax", when it should really be called the "greater opportunities tax", or the "pro-democracy tax", or the "spoiled rotten rich kids tax". Also, they claim that repealing the estate tax will benefit small businesses and small farmers the most, when it actually benefits the children of multi-billionaires the most.

The Republicans want the estate tax killed, and the Democrats want it reformed. Polls show that a large majority of the people support the Republican's position on the estate tax, but I know that most of these people do not understand the cost of this tax cut, or the history of this progressive tax. After they are informed about the real facts, and not just the GOP's spin, they overwhelmingly change their support to the Democrat's position. The same thing is true with Bush's plan to privatize part of Social Security.

Yes, the estate tax should be reformed and not repealed and there are many reasons for that position, the most important of which is the continued health of our democracy and our economy.

The estate tax was not designed, and was never intended to tax small amounts of wealth like it does now. For example, if someone has $10 million dollars in savings, or owns a small business worth that much money, that would be considered a small amount of wealth and should not be subject to the estate tax, but it is. The reason that it's taxable is because the estate tax laws have not keep up with inflation.

Therefore, a good argument for reforming the estate tax is to increase the exemption amount to reflect current economic realities. Personally, I believe the estate tax should not kick-in until the value of the estate exceeds $20 million dollars, and then it should be a highly progressive tax with up to 50 different tax rates that go from 5% up to a maximum of 75% for estate over $1 billion dollars. This type of highly progressive system is the way the system worked for the first eighty years, but with a top rate of 90% during the first fifty years.

We should keep the estate tax highly progressive for the benefit of the middle class, American society, the U.S. government, and even for the benefit of the very rich. I will explain why each of these groups benefits later, but first lets look at some history about the estate tax.

The great industrialist and philanthropist, Andrew Carnegie, pointed out in his book "The Gospel of Wealth", that progressive taxation is necessary for the survival of democracy and there is a risk of creating a monarchy in its place through hereditary concentrations of wealth. He knew that there is a balance between economic liberty and free enterprise that could only be maintained through redistribution of wealth by way of a progressive tax system, including a progressive estate tax. He realized that the American society provides a framework of benefits that help people create great fortunes and taxing these fortunes, at the capitalist death, is fair and it insures the continuance of America's dynamic economic system by keeping the door of opportunities open to people with good ideas, and who are will to work hard to see their capitalist vision achieve success.

Our free market capitalist economic system based on opportunity is the best the world has ever known, and it made America the largest economy and military super power in the world.

The Robber Barons

The reason the estate tax was created was because of a group of very successful capitalist, know as the Robber Barons, were buying up every inch of land in America. Our government leaders realized that if they did not stop these capitalist the founding father's vision of an egalitarian democratic republic based on the U.S. Constitution would be destroyed. So in 1913 they passed the sixteenth amendment to the Constitution and created a highly progressive tax system that included the federal income tax and the estate tax.

This tax system stopped the Robber Barons dead in their tracks. These new tax laws forced them to decide between giving much of their wealth away to charities, or paying a huge tax bill to the federal government. They ended up doing both to the great benefit of our society, the middle class, and our government.

When the Robber Barons were faced with these two choices they built libraries, schools, hospitals, charitable foundations, and research institutes. They also paid large amounts of taxes to the federal government that was used to build roads, highways, bridges, dams, schools, canals, public buildings, military bases, and other infrastructure improvements.

However, now a new group of Robber Barons has emerged and just like the first group this new group is seeking to build their wealth and monopolize their positions of wealth and power. But unlike the first group this new group is working inside our government. They have the GOP on their payroll through a corrupt campaign finance system, and they have the Democrats chasing around after the crumbs just so that the Democrats can compete in political campaigns against the Republicans.

Nixon, Reagan, and now Bush have all passed tax legislation that has changed our tax system from a highly progressive one into a highly regressive one. Now, the richer you are the less you pay in taxes as a percentage of your income. The people currently paying the highest percentage of their income in taxes are self-employed individuals making $100,000 per year. Not only is this unfair, but it destroying the ability of small businesses to compete against large businesses and it is concentrating wealth into the hands of the people already at the top of the economic ladder.

The estate tax is the last truly progressive tax still on the books and Bush and the GOP are working overtime trying to repeal it and we can't let them get away with it.

Who Benefits From An Estate Tax

The simple answer to the question of "who benefits from the estate tax?" is the middle class. In fact, if it wasn't for the estate tax the middle class would be non-existent. Our society and economy would look a lot like the ones in Mexico.

In Mexico there is great wealth, but all the wealth, the land, is owned by around 40 different families. The government in Mexico is a democracy, but it is corrupt and only serves the interest of these few rich families. That is why millions of Mexicans seek across our borders every year. They want to live in a society where there are real opportunities, where most of the people live in the middle class, and where there are social safety nets that help keep its citizens out of poverty. Social safety nets like the minimum wage, the forty hour work week, overtime pay laws, worker safety regulations, Medicare, Social Security, and unemployment compensation.

Our government also benefits from the estate tax. Since the American people are the government it's really a benefit to all of us. The Republicans constantly criticize the size and power of our government, but that is because the government does not just serve the interest of their wealthy backers. When the Republicans run up huge budget deficits, like Reagan and Bush Sr. did, and now George W. Bush is doing, they are really running up all of our debts. When they try to limit and cut the social programs our government provides they are really trying to limit and cut benefits that belong to us. When they spend all the Social Security surpluses on tax cuts for their rich friends they are really taking money from the many of us and giving it to a few of their rich friends who need it the least.

Our society also greatly benefits from the estate tax. Since we all live in this society it's really a benefit to all of us. Many parks, museums, libraries, universities, foundations, and public buildings are a direct result of the estate tax forcing our most successful capitalist to give back to our society. A society that has enabled them to create and build their fortunes.

Finally, I believe that the estate tax also benefits the very rich. It benefits the rich because it forces them to be more charitable and charity is the opposite of greed. The estate tax tempers their greed, it limits their natural desires to horde their wealth, and it stops them from monopolizing opportunities. In other words, it protects them from themselves, and us from them.

Is The Estate Tax Still Needed?

Repealing the estate tax would cost our government over $10 trillion dollars in lost revenue over the next fifty years. Our country needs this money to pay down the national debt, fund Social Security, repair our aging infrastructure, modernize our public schools, guard our borders, strengthen our military, educate our children, and fix our Medicare system.

But despite of all these urgent needs and pressing demands all the Republicans in Congress seem to really care about is repealing the estate tax for the benefit of their multi-billionaire supporters. Leading this myopic backwards charge is President Bush, all the Republicans in Congress, and even a few of the Democrats.

The Republican leaders are threatening gridlock and obstruction if they don't get their way on the estate tax. And when the Democrats say "the Republicans have misplaced priorities" it's a gross understatement. The GOP's efforts to concentrate America's wealth and mislead the America people about the real cost, and the real beneficiaries, of permanently repealing the estate tax are sickening and border on being criminal, and are certainly anti-democratic.

The Republican Party controlled the White House and both houses of Congress until the elections in 2006, but their self proclaimed conservative leadership had the federal budget running the largest deficits in our country's history. They blame the economy, the war in Iraq, and previous Democratic administrations, but the truth is that their tax cuts and spending increase have created these huge and growing deficits. Bankrupting the federal government and selling those $100 trillion in assets to their mega rich Texas friends for pennies on the dollar is all part of their treasonous plan.

The Forbes list of the richest people is fiction. The few families with the greatest concentrations of wealth in America hide their identities from the American people. They know that if the American people ever found out how much wealth they own, where they got that wealth, and what they are doing to keep that wealth there would be an unending demand for a more progressive estate tax with no generation skipping loopholes, and a much more progressive federal income tax system. 

So how has the Bush administration addressed this growing fiscal budget catastrophe? He wants to pass more tax cuts, make his first tax cut permanent (repeal of the estate tax), and increase spending. He claims that growing the economy will fix the problem, but we have a growing economy now and the problem is getting worse.

I believe that Bush is deliberately mismanaging the federal government's finances in a treasonous effort to rob our government of its $100+ trillions of dollars in real estate and financial assets. These government assets really belong to us, but if the GOP is successful they will soon belong to the highest bidder.

Repealing the estate tax is the coup d'etat of the Republican's wealthy backers, and our government's assets for pennies on the dollar will be their cherry topping.

Summary

The idea of repealing the estate tax is flawed for many reasons, some of which I have already talked about. But also because it would cause significant new inflationary pressures, high budget cost, disincentive for charitable giving, shifting the tax burden to lower income earners, allowing large amounts of wealth and income to go untaxed, increasing the wealth gap, and most importantly the loss of opportunity.

Opportunity to create new wealth has always been the great strength, attraction, and promise of America, and by repealing the estate tax you lock in the "haves" and you lock out the "have-nots". As a result, the economic engine in America will quickly grind to a halt as this untaxed old money is free to move any place in the world that offers a higher rate of return, lowest labor cost, and fewest regulations. It would also allow a real estate based wealth monopoly to take over and dominate the American economy, very similar to the economy in Mexico.

Hundreds of America's richest self-made individuals are strongly opposed to permanently repealing the estate tax, including Bill Gates and Warren Buffet. Now why would these wise and successful individuals, who's children stand to benefit financially, oppose these tax cuts so strongly unless something about them was deeply flawed? The answer is, they wouldn't. They know it's flawed for the reasons I have already pointed out.

President Clinton, and his fellow Democrats in the House and Senate, showed how well our economy can function when the richest Americans are required to pay a more progressive level of taxes when they passed the 1993 tax increases. This tax legislation raised the top tax rate and expanded the number of tax brackets, and it passed without one vote from any of the Republicans. This tax legislation was a catalyst for great economic growth, the creation of huge amounts of new wealth, historically low unemployment, huge budget surpluses, and a rising standard of living. However, it also showed how high a political price must be paid to get tax increases passed in a money corrupted political environment, how hard it was to keep them at that level by forcing veto after veto, and how divided our political leaders are on legislation that, in retrospect, clearly benefited everyone in this country, including those already at the top.

Perhaps the America people deserve to suffer some bad economic consequences from the backwards tax legislation that Bush and his Republican pals continue turning out. Maybe because we have failed to exercise our duties as self-governors, and political watchdogs, we are destine to become fearful slaves of a ruthless monarchy ruled by a small number of inheritance rich spoiled brats and run by a bunch of money hungry lawyers, bankers, and financial coup engineers. Maybe because America's policies have been so harmful to people in other countries, and our own country with the looting of the U.S. treasury of $500 billion during the S&L crisis, our country deserves to get destroyed from within. Perhaps it's the ironic type of karmic justice that President Lincoln warned us about in the following speech:

"I see in the near future a crisis approaching. It unnerves me and causes me to tremble for the safety of my country. The money powers prays upon the nation in times of peace and conspires against it in times of adversity. It denounces, as public enemies, all who question its methods or throw light upon its crimes. Corporations have been enthroned, and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until the wealth is aggregated in the hands of a few, and the Republic is destroyed."

"America will never be destroyed from the outside. If we falter and lose our freedoms, it will be because we destroyed ourselves."
Abraham Lincoln (1864)

The wolves are at the door, the door is unlocked, and the people are asleep. Are enough of our elected leaders going to stand up against the wolves this time? This could be the beginning of the end of America's greatness as greed, corruption, and the tyranny of evil men overwhelms common sense, moral conscience, and justice.

All the U.S. Senators and Representatives should vote "no" on the permanent repeal the estate tax legislation, but many won't because they have sold out the American people and betrayed their country for a handful of gold. If they were men and women of honor and respect they would reform the estate tax so that farmers and small business owners are exempt, and so that the wealthiest people are required to return to our society some of what our society has allowed them the pleasure of accumulating and enjoying. They should also raise the top rates and close the generation skipping and trust fund loopholes.

We should keep the "carrot on the stick" moving our country forwards with a highly progressive tax system and estate tax at its core. Otherwise, you may end up explaining to your children about what happened to our country from a cardboard box under a bridge.

One way we can begin to put pressure on Congress to keep the estate tax in place and restore progressivity to our tax code is by boycotting the individuals, politicians, and corporation that are supporting this anti-democratic legislation and who are funding our money corrupted political system (see "Boycott List").