May 16, 2006
FOR THEIR NEXT TRICK: ESTATE TAX REPEAL
Caption: If you’ve got it, flaunt it!
Just after passing $70 billion worth of tax cuts stacked overwhelmingly in favor of millionaires, Congress is getting ready for…more tax cuts for millionaires. Holy one trick pony, Batman!
In the last round, (check the May 10 post for links), millionaires came out around $42,000 ahead, compared with about $20 for average folks.
In the next round, forget about the $20. A likely goal will be the complete repeal of the estate tax which applies only to those who inherit vast sums of wealth. (For historical background on the estate tax, click on the Goat Rope April archives and scroll down to the April 27 “No Millionaire Left Behind” post.)
According Citizens for Tax Justice, new data from the Federal Reserve shows growing inequality “reminds us of the critical role the estate tax plays in reducing the concentration of wealth in a few hands.”
The report for the Federal Reserve, Currents and Undercurrents: Changes in the Distribution of Wealth, 1989-2004, found that the wealthiest one percent of Americans owned 33.4 percent of wealth in 2004, up from 30.1 percent in 1989 and more than the bottom 90 percent of the population. They also owned 62.3 percent of business assets in 2004. Other sources suggest an even greater concentration of wealth in this group.
The wealthiest five percent owned 55.5 percent of the wealth in 2004, including 88.7 percent of business assets, 93.7 percent of the value of bonds, 71.7 percent of nonresidential real estate, and 79.1 percent of the value of stocks.
By contrast, the poorest 50 percent of Americans owned only 2.5 percent of the wealth, down from 3 percent in 1989.
The estate tax affects less than 2 percent of tax payers and has been in effect since 1916 under both Democratic and Republican administrations and majorities in Congress. Progressive Republicans such as Theodore Roosevelt supported it, arguing that the wealthy benefit most from society and have special obligations to it.
Repealing it would be another short-sighted step towards oligarchy.
GOAT ROPE ADVISORY LEVEL: ELEVATED
by El Cabrero