Congress today voted to pass another estate tax cut. Although the measure falls short of the complete abolition of estate taxes that had been urged by conservatives, led by the Wal-Mart heirs (who apparently feel they were gypped by only receiving in the neighborhood of $20 billion apiece from the estate of their late father), it does actually do one reasonable thing-- increasing the exemption level (the amount of an estate not subject to taxes) up to $5 million for individuals and $10 million for couples. This is reasonable inasmuch as the previous limits of $1 million and $2 million had not been indexed to inflation, and so in fact there had been a handful of cases where successful family businesses or farms that had been subject to the tax were sold. And the new limit won't get rid of this problem in some cases-- for example the O'Malley family had to sell the Dodgers and the Yawkey family had to sell the Red Sox. So I guess if you own a major league baseball team, maybe you should sell it and run for Governor of Texas or something like that. However, the whole 'family run small business or farm' routine is largely a dodge, because in almost all cases the old limit (and certainly the new limit) covers it. If your business has grown to the size where you end up paying substantial estate taxes (like Sam Walton's remaining share of Wal-Mart), then I question whether it is a 'small' business anymore.
They had in fact wanted to eliminate the tax entirely, but were prevented from doing it last year because the vote was to be taken just as the Katrina images were coming out of New Orleans and Americans would have been outraged by a tax cut for dead rich people when the bodies of dead poor people were being collected on sidewalks. And this year, there is an election coming and the Republicans are reading the poll numbers. So, there is only one year there will be no estate taxes at all-- in 2010 due to old legislation passed during the earlier rounds of Bush tax cuts. But it will still be back in 2011 (Wonder, in the event that they don't get a permanent repeal passed, whether in December of 2010 we will see a bunch of billionaires move to Oregon and get themselves declared terminally ill and get lethal injections?) and that is a good thing. With the new limits, any further estate tax cut would be clearly a tax cut aimed at plutocrats (which there are many of in Congress, and many more in Congress who have been wined, dined and given airplane rides by plutocrats). The case can be made that this cut was as well, but luckily it stopped short of going all the way.
What makes this particularly galling is that Congress just this week voted (again) against raising the minimum wage. Of course, taking inflation into account, the minimum wage is less than half of what it was in the 1950's, but they like to continue to argue that somehow it protects 'jobs.' Hmmmm... that is what they said the last time it actually did go up in 1997, and that was followed by an economic boom and the creation of millions of jobs. It's not hard to figure that one out either-- when poor people have more money, they spend more, creating more need to provide the goods and services they buy. In contrast, when rich people have more, they probably don't spend it because they are already spending whatever they want to (isn't that what it means to be rich?). So given the obvious results of the last time we hiked minimum wages, why are the conservatives still making the tired old, and demonstably false, argument that raising them costs jobs?
And one other thing that got lost in the shuffle of all this-- Congress itself quietly accepted a $3,300 pay raise for themselves. That is despite the fact that they have a health care system that should be a model for the nation-- universal coverage that in most cases is free to members of Congress and their families, even as they refuse to do the same for us. And their retirement benefits are among the best in the land too-- yet it was only a year ago that they were talking about cutting your Social Security benefits.
So they pass a tax cut to favor a bunch of rich dead people (and only don't pass a bigger one because they are afraid of the voters), they pocket a nice raise, but they refuse to stimulate the economy with a minimum wage increase.
Isn't it great to see how well their priorities are in place?