Saturday, August 05, 2006

Opinion: Should the estate tax be cut? Why or Why not?

GOP Bid On Wages, Estate Tax Is Blocked
Democrats Prevent Vote on Senate Bill
By Charles BabingtonWashington Post Staff WriterFriday, August 4, 2006; Page A01

Senate Democrats blocked a Republican bid to combine a tax cut for the wealthy with a wage increase for the working poor, adding a volatile economic issue to this fall's congressional campaigns.

GOP leaders fell three votes short of the 60 needed to cut off debate and bring the package to the Senate floor, where it was considered certain to pass on a simple-majority vote. Republicans said Democrats will pay a price in November, contending that most Americans support the bill's call for an increase in the minimum wage and deep cuts in the estate tax. But Democrats said rich Americans have received enough breaks from the Bush administration and the GOP-led Congress. Voters, they said, will see the Republican-backed bill as a ploy to further enrich upper-income families while trying to usurp the Democrats' role as champions of the working poor.

Under the bill, "8,100 of the wealthy and well-off hit the jackpot, while millions of working families get $800 billion in [federal] debt," said Minority Leader Harry M. Reid (D-Nev.), who led the opposition to the measure.

The official Senate tally was 56 to 42 in favor of proceeding to a vote on the wage-and-tax bill, short of the 60 required. Senate Majority Leader Bill Frist (R-Tenn.) supported the package but switched his vote -- reducing the final number to 56 from 57 -- to enable him to seek a reconsideration later. Republicans Lincoln D. Chafee (R.I.) and George V. Voinovich (Ohio) joined one independent and 38 Democrats -- including the two from Maryland -- in opposing the bill by backing the filibuster. Four Democrats and 52 Republicans -- including Virginia's two senators -- signaled their support for the bill by voting to limit debate.

Republican leaders in Congress have long wanted to eliminate or slash the taxes levied on estates left by wealthy people, but the Senate has repeatedly refused. Hoping to attract enough Democratic support, House leaders last week added a sweetener: the first increase in the federal minimum wage in nine years, plus an extension of several popular tax breaks for businesses. The House passed the complex measure -- dubbed "the trifecta" because of its three main facets -- and sent it to the Senate, which planned to vote before adjourning this weekend for the August break. Frist agreed to the deal, hoping that several Democrats could not resist a chance to raise the minimum wage, in three phases, to $7.25 an hour from the current $5.15. The bill would also have exempted from taxation all estates worth as much as $5 million -- or $10 million for a married couple -- and applied a 15 percent tax rate to inheritances above that threshold and up to $25 million. The value of estates exceeding $25 million would have been taxed at 30 percent.

Most congressional Democrats support raising the minimum wage and oppose cutting the estate tax. Most Republicans take the opposite view, although some from both parties support both proposals. Democrats said they will keep pushing to raise the minimum wage with no strings attached. GOP senators had practically dared Democrats to vote against the package with the minimum-wage increase. All but four Senate Democrats took the dare, heeding Reid's plea to deny Frist a victory as lawmakers go home to campaign. Republicans predicted that Democrats will regret their decision.

"I certainly wouldn't want to vote against this bill" and then face the voters, Sen. John E. Sununu (R-N.H.) said in an interview. Polls show overwhelming public support for raising the minimum wage and for eliminating "the death tax," he said. Voting against the package, he said, "is bad for the country, and bad politics, too." Sen. Mitch McConnell (R-Ky.) said all three elements of the bill could have survived simple-majority votes had they been allowed, and he accused the Democrats of being obstructionists. "How can we have bipartisanship in the Congress if Democrats won't take 'yes' for an answer?" he asked.

But Democrats expressed confidence that voters will see the package as a cynical effort to help wealthy GOP supporters by making the estate tax cut the price for a wage increase that the nation's lowest-paid workers deserve.

8 comments:

BrandonK said...

In my opinion the estate tax should not be cut. The majority of the American people (97% I would estimate), do not need to pay an estate tax. The small amount of people that do need to pay this tax (about 20% of the estate's value) don't really need to worry about a large loss of money either. Currently the amount has been raised to $2,000,000, meaning that people needing to pay the estate tax aren't really losing enough money to alter their newly acquired wealth. Also, people need to put into perspective that by cutting the estate tax, the U.S. will add billions upon billions of dollars to future deficits. Bottom line, these people can afford to pay the estate taxes to aid in the government's debt.

KimK said...

I think the estate tax should be cut. The government should not be able to take money from you when you die and want give it to your loved ones. If high estate taxes are imposed upon people with a lot of money, they could just be smart and gradually give their money away to their loved ones. To decrease the current deficit, government spending should be decreased rather than imposing such high taxes.

Dain said...

I belive the estate tax should not be cut. First, because it generates billions upon billions of dollars. Second, those that are affected by it can afford to pay it. Thirdly, when you die, you don't need money anymore. The government does take some, but your loved ones still recieve the majority. Fourth, and most important, it prevents feifs.

MikeM said...

The estate tax is a joke and should be cut. Why add insult to injury by charging a tax to a dead man? So what if he can afford it, that doesnt mean that he should have to pay it. People work hard for their money and should be able to do what they wish with it when they die. Just because they cant take it with them doesnt mean the government should take 20%.

tonileep said...

I believe that the estate tax should not be cut. The estate tax applies to assests of $2 million or more and in the year 2004 it affected 1% of the people who died. This is a very insignficant amount of people and if they have accumulated that much money over their lifetime they should just pay it because it won't change their acquired wealth drastically. They can afford to pay the tax and in doing so it will also help pay some of the government debt.

MikeM said...

Ok so leave the tax, but why not take it a step further? Well since they can afford it why not double all fines? So if a rich man is caught speeding lets double no, no lets triple his fine. I mean he can afford it cant he? It really wont hurt him. In fact that extra money will go to help the government wont it?
Now, doesnt this sound like profiling? Why should rich people be treated differently because they are rich? What if instead of affecting only rich people this tax affected only blacks or jews then would it be ok? It is irrelevant whether they can afford it or not. Just because you can go without something doesnt mean it should be taken away from you. Rich people deserve to be treated like poor people just like blacks deserve to be treated like whites and jews deserve to be treated like non jews.

Megan B said...

I believe the estate tax should be cut. I also tend to agree with Mike, is it now okay to discriminate against people who don’t go completely crazy when they get the short end of the stick.

Many governmental officials feel that it is important to focus on how the government can help people who are in poverty, or earn less than others. What about helping all of the people regardless of their income level? Let’s think, sounds kind of like John Locke’s philosophy of natural rights, life, liberty, and PROPERTY. Most of the Founding Father of our country tended to agree with a majority of Locke’s ideas.

The fact that they are rich and can afford it should have no thing to do with it, and in some cases the person receiving the money from the estate, might actually need it. Just look at me, what if my Mom was to die, I would have to pay that 20% tax, and there would go college education, and a good chunk of money I would need to live off of until I turned 18. A lot of this money she have already been taxed on once, so should there really be tax on it again, just so she could transfer it to me. Does that seem fair? Not to me so, I would also like to point out that people like my Mom who are currently not in agreement with the tax, find ways around it, such as setting up the estate as a trust fund, or other trust vehicles. Should we really make people jump through hoop to secure their money?

I would also like to point out that many people, who have accumulated that much wealth, generally use it in entrepreneurial ways or invest in our economy. Wouldn’t taxing that money just discourage those investments in the economy, and hurt every investor and much of the public by weakening the economy.

Why not just give everyone the same LOW rate of taxation, so no one is discriminated against.

MikeM said...

I disagree with mikem on this issue. I believe the estate tax should be left in place. It does seem unfair to tax only a selected group but consider this. As it is only about 1% of people are being affected by this tax. Those people are leaving behind over $2 million or $4 million for couples and only being taxed around 20%, leaving plenty of money for their loved ones when their gone. The estate tax not only generates billions of dollars for the state and federal governments but it also promotes charitable giving. It was estimated that if the estate tax was cut in 2004 charitable giving would have decreased 6-12 percent, a good chunk of money going to a good cause.