7/14/00 - This just in: The US Senate passed the bill to repeal the federal estate tax. The Democrats offered an alternative lessening the tax on small businesses and farm, but the Republicans and some Demos weren't interested. In the vote, the friends of the rich cost the US Treasury, and you and I, $750 Billion over the next 10 years.
Of the 45 Demos in the Senate, 9 joined 51 Republicans in supporting the tax cut. Among the Senators voting in favor were two from the Northwest: Patty Murray of Washington ( a supposed liberal) and Ron Wyden, Oregon's own senior Senator. Dianne Feinstein of California also voted in favor. Clearly Ralph Nader has it right: there's no difference between the Republicans and Democrats. Vote Green for a real choice!
Clearly we are not all created equal if that idea is interpreted literally. The founding fathers did not propose at the outset to directly redress the inequalities caused by genetics and biological accidents of birth. In the meaning of the Declaration of Independence, we are all created equal in the eyes of the law, that is, as citizens under the US Constitution.
We are obviously a long way from matching that ideal. Neither as public citizens, politically, nor as private individuals, in the courts, do we have rights equal to those enjoyed by people far wealthier than ourselves. OJ Simpson was acquited in spite of being black, because he was rich and could buy a sophisticated legal defense. In the political sphere, money is speech; the more money you have the more free, First Amendment speech you can buy in the ubiquitous mass media. Additionally, modern corporations are treated as superhumans - immortal, yet accorded all the rights and protections of living individuals. Since corporations don't die, and since in modern times their charters are never challenged, we are oppressed by the continuation over generations of the ammassed wealth and power which Jefferson, Madison, and Hamilton rejected. The laws and taxes on inheritance and gifts don't protect us from corporate wealth.
The economic circumstances under which we all begin life are amenable to limited democratizing by appropriate laws. To this end, back in 1916 when the estate tax law was first adopted, Congress sought to reduce concentrations of power and promote equality of economic opportunity -- to "break up the swollen fortunes of the rich." The goal of periodically redistributing wealth has been a part of the US tax code for at least a century and the concept of "leveling the playing field" was in the mind of those who originally sought independence from Britain.
In its present formulation the gift/inheritance tax only applies to estates over $675,000 and this amount will increase over the next five years to $1,000,000. The tax does not apply to gifts or bequests to spouses and gifts to individuals up to $10,000 per year are also exempted. As applied, the estate tax gets all its revenues from the wealthiest 1.4% of the population -- and two thirds of the revenue comes from the top 0.2% of the people.
The family farmer is the poster child of the anti-estate-tax movement, but the truth is that less than one in 20 farmers leaves a taxable estate. To be sure, as estate tax opponents are oddly fond of pointing out, the current estate tax has too many dodges and escape hatches. But rather than being an argument for repeal, that suggests closing the loopholes so that the estate tax does a better job. Instead, panderers to the rich are using the law's defects as an excuse to eliminate it.
As an example, a 6/13/00 Oregonian article by Robert Landauer describes a unique problem for small wood-lot owners who grow a crop with a multi-generation harvest cycle:
Forestry appears unique among U.S. endeavors in requiring several decades of cash investment, hard labor and major risks before the crop yields any paydays. So thousands of land-rich, cash-poor owners face a pincerlike squeeze when estate taxes are owed.
John C. Bliss, professor of private and family forestry at Oregon State University, hears similar stories of cutting through an estate-tax knot with a chainsaw. They bring to mind a colleague's verdict: No game plan could be better designed to encourage deforestation than U.S. estate-tax policy.
Clearly, in the case of individually-owned woodlots some relief under the estate tax code is needed. This is not an excuse for eliminating the tax as Congressional right-wingers propose.