Grassley: Revenue-Draining Estate Tax Compromise Sure to Happen
Via the Hill, Sen. Charles Grassley, the ranking member of the Senate Finance Committee, gave an interview to AgWired where he assured that the estate tax would get resolved before the end of the year.
Q: Anything else kinda going on in DC right now that-?
Grassley: Estate tax.
Q: Yeah, that’s a great one to bring up. I mean, I think that probably, I mean we’ll see your opinion. It just has a huge impact on these people who are major land owners in some cases, in terms of who are going to be our farmers of the future, for example, right?
Grassley: Absolutely. Because, if we go back to a million-dollar estate tax exemption, which is going to happen Jan. 1, we’re going to be selling a lot of farm land to pay estate taxes. And even at $3.5 million dollars, which I think is where we’re going to end up, it’s still going to be detrimental to some family farmers. But I think that’s where we will end up, and I think we’ll do it before the end of the year.
This is ridiculous. Republicans trot out “family farms” every single time they bring up the estate tax. I’ll leave this to Sen. Al Franken, who has been talking about this issue since before he was on Air America Radio:
Those who want to eliminate the estate tax, understandably, don’t put the children of the incredibly wealthy in their campaign literature. Instead, they talk about family farms – as if family farms have been lost to the estate tax. Yet according to the New York Times, the American Farm Bureau Federation was unable to name one family farm lost because of the estate tax. And opponents of the tax insinuate that it’s impossible to design a policy that continues to protect the family farms that might be even slightly affected.
Here’s the article Franken cited. Simply put, the “save family farms” element of this debate is a complete myth.
I would add that Franken’s bill on the estate tax does, indeed, expand the exemption to $3.5 million dollar estates, and makes provisions for family farms which he said weren’t necessary. And dozens of progressive groups have signed on to the bill. Face, meet palm.
Franken’s bill does add some extra marginal tax brackets at the top, so bigger estates pay more. And it makes the tax retroactive so that estates from this year would actually get taxed. But everyone seems to have forgotten how artificial this debate was in 2001, when Bush passed the estate tax cut the first time. Total repeal has now become the one pole of this debate, and reversion to the Clinton-era levels, which still affected almost nobody in the country, on the other pole, with the $3.5 million, 45% compromise in the middle.
What does that mean to the federal budget? This analysis estimates that a resetting of the estate tax to 2009 levels will cost the Treasury $609 billion dollars between 2012 and 2021, in both raw revenue loss and interest on the debt. Making it retroactive for 2010 would maybe bring in $14 billion, hardly enough to cover the losses, and adding brackets and increasing the tax for the top 1/4 of 1% wouldn’t cover it either. Basically we’re talking about another giveaway to the uber-rich. And nobody seems that concerned about it.