It’s a $270 billion tax cut for the top 0.2% of Americans. It passed the U.S. House 240-179 on party lines Thursday. Both Idaho Representatives Mike Simpson and Raul Labrador voted for it, which is interesting because neither one of them ran on a platform of “Urgent Tax Cuts for Donald Trump’s Children.”
Why would Idaho’s Congressmen vote for this? It increases the deficit, grows the debt and does nothing for the average Idahoan.
Maybe the answer is, “It’s their nature.”
Why are Republicans trying to repeal the estate tax? It’s their nature.
By Paul Waldman
Yesterday, the House voted to repeal the estate tax, apparently in the belief that the American public needed a reminder that the Republican Party is the party of the wealthy. I’ll get to why the arguments they make about this issue are either problematic or just factually wrong (depending on which argument you’re talking about), but as a political decision, holding this vote seems rather foolish. They know that even if they got the 60 votes they would need to overcome a Democratic filibuster in the Senate, President Obama would likely veto the bill. So why bother?
The answer can be found in the parable of the scorpion and the frog, which you probably know. The scorpion asks the frog for a ride across the river; the frog says, “But you’ll sting me.” The scorpion replies, “Why would I do that? If I sting you then we both drown.” The frog agrees, and midway across the river the scorpion stings the frog. As they begin to sink to their deaths, the frog says, “Why did you do that?” The scorpion answers, “It’s my nature.”
In this case, the frog is the eventual GOP presidential nominee, and the scorpion is congressional Republicans. At a time when everyone is talking about income inequality and stagnant wages, the nominee will want to convince voters that he understands their concerns and will find ways to improve their lot. Meanwhile, his congressional allies are trying to make sure Donald Trump’s kids don’t have to pay taxes.
It isn’t that the estate tax is incredibly popular, because it isn’t. If you ask people in a poll whether they think it ought to be repealed, a majority will say yes. (I discussed some reasons why here.) But this isn’t a problem because voters will be angry at Republicans for trying to repeal the tax, it’s a problem because it demonstrates what Republican priorities are, in exactly the way they don’t want. You can bet that Hillary Clinton will contrast her economic plans with those of Republicans, who want to cut upper-income rates, as well as taxes on investments and inheritances. This is a concrete demonstration of what she’ll talk about.
Republicans say that they aren’t really trying to help wealthy heirs; instead, this is motivated by their deep concern for the fate of family farms and small businesses. But today, the first $5.43 million of any estate is exempt from taxes. That’s the single most important fact to understand about this tax.
And what about those family farms Republicans are always talking about, the ones that are constantly being sold off to pay the estate taxes? They’re a myth. When The Post’s fact-checker Glenn Kessler was doing his estate tax fact check, he asked the office of John Thune, the sponsor of the Senate version of repeal, about the farms we keep hearing about. “Thune’s staff conceded that they could not identify a single farm that had been sold because of the estate tax, but they said some farms had to sell acreage in order to pay the tax.” Nobody else seems to be able to find one, either. You’ll notice that when Republicans talk about this, they always posit a hypothetical family farm being sold off and not “My constituents the Millers had to sell off their farm,” because the Millers are the equivalent of a unicorn. According to the Department of Agriculture, in 2013 only .6 percent — or 1 in 167 — of the estates of farmers who died owed any estate tax at all.
Because of that large exemption, currently at $5.43 million, the numbers for all estates are even smaller. According to the Joint Committee on Taxation, “In 2013, the most recent year for which final numbers are available, there were 2.6 million deaths in the United States, and 4,700 estate tax returns reporting some tax liability were filed. Thus, taxable estate tax returns represented approximately one-fifth of one percent of deaths in 2013.”
That’s 1 in every 553 estates that owed any tax. Which does make you wonder why repealing the estate tax is an issue of such terrible urgency to Republicans. You’d think that if they were smarter, they’d say to themselves, “We want to do this eventually, but it isn’t going to happen with a Democrat in the White House. And we won’t get a Republican president unless we show the voters we care about ordinary people. So let’s just put this off until 2017.” But if there’s just one wealthy heir out there who might have to pay some tax on his inheritance, and heaven forbid decide to get a Porsche instead of a Ferrari next year, then that’s an injustice they simply can’t ignore. Politics might dictate otherwise, but Republicans can’t help themselves. It’s their nature.
Paul Waldman is a contributor to The Plum Line blog, and a senior writer at The American Prospect.