Saturday, June 25, 2005

Estate Tax Redux

The Washington Post has also waded in on the Estate tax.

As an asside, I've been wondering about the Post in the last few years. In the past they embodied the maxim that the role of good journalists was to "speak truth to power." But that changed with the Bush administration. They have been far too deferential, and not just in the immediate 9/11 aftermath. Lets hope a change is in the wind.

The Post correctly suggests that the Democrats, who seem wobbly on the Senator Kyle's proposal to effectively repeal the estate tax, have both the policy and politics wrong. The policy is easy. We need to raise taxes, especially on the wealthy. Our deficits are unsustainable and will cripple us if most of the Bush tax cuts are not repealed, or at least let to expire. The Republicans have successfully waged class warfare against the middle class for the last twenty-five years and it is time to put matters right. The Center on Budget and Policy Priorities issued a March 7, 2005 Report which is a must read about the scary change in after tax income distribution since 1979. The bottom line is this. From 1979 to 2002 the after tax income, adjusted for inflation, of the bottom fifth of income earners went up a total of 5%. The middle fifth, which was $43,700 in 2002, saw an increase over those twenty three years of 15%. The top fifth increased 48% and the top one percent saw a whopping 111% increase. Think about that. The incomes of the already super rich increased more than seven times as fast as the income of the middle class. If we have more of this we will truly become a banana republic economy.

While the Estate Tax did not cause this massive income shift, curtailing or eliminating it will make it worse. It will take us in the wrong direction.

On the politics, the Democratic party need to shed its fear of the "class warfare" charge. They should adopt it as their own. The Republicans have been waging class warfare against the middle class for years. They enrich their friends through tax policies, corporate welfare and regulatory policies that strip them of accountability. If the Democrats would simply stand up and call it like it is, they will not only win but also begin to return our country to some semblance of economic balance and social equality.

No comments:

Post a Comment