The Last Thing We Need

The last thing we need to do after eight years of ill-advised Bush Administration fiscal policies is throw the rich another tax cut. Yet here we are with a couple of Senators (Lincoln and Kyl, Republicans both) proposing that we reduce the estate tax that only effects the richest of the rich as is.

Both the Washington Post...

At a time of soaring deficits and growing needs, the Senate is weighing whether the wealthiest of wealthy Americans should get a tax break worth some $250 billion over 10 years. The Senate today could take up an amendment to the budget resolution proposed by Sens. Blanche Lincoln (D-Ark.) and Jon Kyl (R-Ariz.) that would shield the first $10 million of estates from taxation and lower to 35 percent the tax on amounts beyond that. This would have been outrageous even before the current economic and fiscal mess. Now it is outrageous and nonsensical.

And New York Times...

With all the serious work before Congress, it is a colossal waste of time to have to rebut the false claims and warped premises of ardent estate-tax cutters. Ms. Lincoln’s and Mr. Kyl’s colleagues in the Senate should make short work of it and move on to urgent matters.

Editorialized against the idea quite scathingly earlier this week.

The WaPo mentioned it but Ezra Klein rammed home the hypocrisy that is brewing here as concerns charitable giving...

One other point on the effort to radically defang the estate tax. March saw a sort of strange argument over an Obama administration proposal to fund universal health care by lowering the tax exemption the rich could seek on itemized deductions from 35 percent to 28 percent. Huge furor. Max Baucus and Charlie Rangel quickly disavowed the plan. This, they said, just wasn't the time to harm charitable giving. Even the small slice of charitable giving that's really about the tax break.

Repealing the estate tax would also harm charitable giving -- and in the same way. It would make it less advantageous as a matter of taxation. In fact, it would do it rather more violence than anything the Obama administration was considering...

...That's a 10 percent change in the rate, which eagle-eyed readers will recognize as a larger change than the seven percent envisioned by Obama. A Congress which rejected a seven percent change in the tax treatment of charitable deductions so poor people could see the doctor would have to be out of its mind to entertain a 10 percent disincentive so rich people could keep more of their money.

Yes, these are your Republican Senators.