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News :: Miscellaneous |
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Beyond Tax Relief for the Prosperous Few |
Current rating: 0 |
by Mark Weisbrot
(No verified email address) |
13 Feb 2001
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I think that Mark's piece is a concise and accurate reason why the editorial in the Feb. 13 News-Gazette is so far off base. It is simply silly to argue that giving most of the tax relief to those who need it least will be the greatest good for our nation. Why not extend the Earned Income Credit to more of the millions of families struggling to get by on less than a Living Wage? It'd do much more good than making sure some rich folks can spend an extra month in Tahiti.
Mike Lehman |
The political success of the Bush Administration\'s tax cut strategy will depend on how
much they can deceive people as to who gets what. Most Americans, no matter how much
they hate paying taxes, do not believe that the richest people should be first in line when it
comes to getting tax relief.
The estate tax (dubbed the \"death tax\" by Republicans in order to make it sound sinister) is
something that 98 percent of Americans will never have to worry about. That\'s because they
do not leave enough assets to be taxed when they die. A married couple can already
exempt $1.35 million, and this rises to $2 million by 2006. And anything that is left to a
spouse is tax-free.
Mr. Bush has proposed to abolish the estate tax. The largest beneficiaries of this generosity
would be about 2400 estates that pay half of the tax. The lucky heirs would save an average
of about $3.4 million each.
Call it a \"Head Start\" program for the rich. But the Bush Administration has a different spin:
it\'s all a valiant effort to spare family-owned businesses and farms from being broken up on
account of the \"death tax.\"
Reality check: 94 percent of farms, of any size, are not subject to estate taxes. Small
farms and businesses have higher exemptions and other special treatments, and there are
very few estates that are made up primarily of these assets. In 1998, there were only 776
taxable estates- - less than 1.6 percent of the total-- in which the majority of the estate
consisted of family-owned business assets. The number was even smaller for farms.
The tax-cutters have also proposed to fix the \"marriage penalty,\" under which some married
couples pay more income taxes than they would if they had filed individual returns. But
here, too, Mr. Bush\'s solution is skewed toward upper-income households-- some of which
already benefit from a \"marriage bonus,\" as opposed to a penalty.
The harshest effect of the marriage penalty falls on low-income households who qualify for
the federal Earned Income Tax Credit. We are talking couples who earn less than $15,000
each, who can easily lose more than $3000 a year when they get married. Mr. Bush\'s tax
overhaul will not get rid of this inequity.
A detailed analysis of the whole $1.6 trillion tax cut, as done by the Citizens for Tax
Justice, shows that 43% of it would wind up in the hands of the richest 1% of taxpayers:
those with an average income of $915,000 would get an average tax cut of $46,000 a year.
For the bottom 60% of taxpayers (income less than $39,000), the average tax cut would be
$227.
Of course, there is a case to be made for shifting the tax burden-- in the other direction. And
fortunately, there is a sizeable source of tax revenue yet untapped: financial and currency
transactions. A very small tax on the buying and selling of stocks, bonds and currency
would barely be noticed by long-term investors, but would discourage speculative trading.
Such a tax would not only raise a good deal of revenue, but would help get rid of some of
the waste and instability in our bloated financial markets.
In case the projected budget surpluses turn out to be smaller than predicted, a \"speculation
tax\" would supply the necessary revenue for a tax cut to those who most need and deserve
it: the majority of Americans, who have not shared in the economic growth of the last
quarter-century.
Mark Weisbrot is Co-director of the Center for Economic and Policy Research in
Washington and Co- author, With Dean Baker, of \"Social Security: the Phony Crisis\"
(University of Chicago, 2000)
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See also:
http://www.cepr.net/
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Great article |
by Nancy Dietrich-Rybicki
nancydietrich (nospam) juno.com (unverified) |
Current rating: 0
16 Feb 2001
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Great article! This was the first time I had read anything about how estate taxes affect family farms. Thanks for posting. |
