Politics May Prompt Tax Relief
McCain sees the light; now he’s all for making tax cuts permanent
ASEN. JOHN MCCAIN (R-Ariz.) is trying to shore up his “conservative
base” in the presidential campaign by reversing his positions and now supports making President Bush’s tax cuts permanent. Many are quietly holding out for more: full repeal of the estate tax, or “death tax.”
This would be a natural progression in his about-face. He has loudly proclaimed that he now supports “permanently extending the Bush tax cuts.”
To win enough Democrats to pass the tax cuts in 2001 and 2002, Bush had to agree they would “sunset” unless extended or made permanent.
The death tax trickles down to zero in 2010 and expires at the end of the year. After midnight Dec. 31, 2010, the death tax bounces back to the full 55%.
Tax lovers trotted out billionaire Warren Buffett before the Senate Finance Committee to give the tired argument that it only affects the rich. The death tax should be expanded, he said, to “take more out of the hides of guys like me.” Cute, corny and wrong.
What Buffett failed to mention is that the life-insurance business, where he obtains his megabucks, is heavily invested in special life insurance policies aimed at covering the costs of death taxes.
Thousands of heirs who lost farms and small businesses to the death tax would be surprised to learn they are “rich.” More than half of America’s jobs come from farms and family owned businesses. The death tax caused the loss of 236,000 net jobs last year alone, according to economists at the Institute for Policy Innovation.
Many thousands of Americans face losing their livelihoods. Jack Kent Cook died thinking his son, John, would inherit the Washington Redskins football team and it would always play in “Jack Kent Cook Stadium.” But he overlooked the death tax and a mega-bucks merchant obtained the Redskins who now play at “FedEx Field.”
It is politically easy to oppose the death tax because 70% of Americans favor repeal. Even many who are fooled into believing it’s a tax on “the rich” oppose it on fairness grounds. Taxes were paid on income and assets during life and Americans should not be taxed again from the grave.
(Issue # 9 & 10, March 3 & 10, 2008)