Until this week here is what we heard over and over (and over and over and over and over): Because of budget deficits (caused by tax cuts for the rich and huge increases in military spending) we have to cut spending, not invest in the American People, put off investing in the infrastructure that makes the country competitive, cut jobs programs, cut education, cut rail projects, freeze pay, cut hiring, lay off teachers, and generally cut back and cut back and cut back. We mustn’t stimulate the economy. We have to cut Social Security and Medicare. We have to cut and gut everything for the middle class.
That was so last week. This week it’s a different story. Now it’s tax cuts for the rich. The same old story: foreclosures, layoffs and cutbacks for us; bailouts, bonuses and tax cuts for them.
Not mentioned so much in the stories you are reading: the “tax deal” includes a big, big cut in the estate tax rate. The estate tax is a tax on the income of kids of millionaires and billionaires. (The millionaires and billionaires call it the “death tax” and say it taxes “small businesses and farms” to divert us from understanding that.)
See if you can spot a relationship between these two charts:
Chart 1: Inheritance Tax Rates (assuming full restoration next year, not the current deal):
Chart 2: Share of Total U.S. Income Accruing to the Top 10%, 1917-2006:
I know it’s hard to spot, but gosh, it looks like the terrible inequality gap between the rich and the rest of us — the concentration of wealth and resulting concentration of power — is lower when the estate tax is higher, and vice versa. Why would that be?
When we revolted against the British aristocracy and formed this country, we decided this would be a country of the people, by the people and for the people. We decided it would be a one-person-one-vote society rather than a one-dollar-one-vote society. We decided it would be a country of equal opportunity with equal rights and equal access.
But today, maybe not so much. Something new has appeared on the scene: plutocracy. Plutocracy is government of, by and for the rich. It is a society where the wealthy make the decisions and reap the benefits of the economy and We, the People are “the help,” serving the wealthy few at the top, doing what we’re told — by the wealthy few at the top.
Please visit Americans for a Fair Estate Tax – a coalition fighting to preserve a fair estate tax.
The estate tax raises revenue that we need to invest in the American people. The estate tax ensures that families who have benefited the most from public goods pay their fair share to maintain them. The federal estate tax provides a check on the concentration of power in the hands of those born into great wealth. The estate tax corrects a feature of our tax system that would otherwise allow certain income to escape taxation entirely. The estate tax encourages charitable giving.
OMB Watch has a page of information about the estate tax here but it is from 2002.