Last week we looked at a video from the History Channel about how Andrew Carnegie, John Rockefeller and JP Morgan worked together to subvert the 1896 election and steal it from William Jennings Bryan (D) for Wall Street shill William McKinely (R). Their machinations led to the greatest wealth inequality in American history and, inevitably, the Great Depression. That kind of inequality-- nearly half the wealth in the country in the grasping paws of just 1% of the people-- is back... and not by coincidence. Republicans and conservative Democrats-- Blue Dogs and New Dems-- have worked to build the foundations for the rise and dominance of an American aristocracy based on inherited wealth. Robert Reich, working with MoveOn, talks about an antidote to this anti-democracy scourge in the video above.
At a time of historic economic inequality, it should be a no-brainer to raise a tax on inherited wealth for the very rich. Yet there’s a move among some members of Congress to abolish it altogether...Today the estate tax reaches only the richest two-tenths of one percent, and applies only to dollars in excess of $10.86 million for married couples or $5.43 million for individuals.That means if a couple leaves to their heirs $10,860,001, they now pay the estate tax on $1. The current estate tax rate is 40%, so that would be 40 cents.Yet according to these members of Congress, that’s still too much.Abolishing the estate tax would give each of the wealthiest two-tenths of 1 percent of American households an average tax cut of $3 million, and the 318 largest estates would get an average tax cut of $20 million.It would also reduce tax revenues by $269 billion over ten years. The result would be either larger federal deficits or higher taxes on the rest of us to fill the gap.This is nuts. The richest 1 percent of Americans now have 42 percent of the nation’s entire wealth, while the bottom 90 percent has just 23 percent.That’s the greatest concentration of wealth at the top than at any time since the Gilded Age of the 1890s.Instead of eliminating the tax on inherited wealth, we should increase it-- back to the level it was in the late 1990s. The economy did wonderfully well in the late 1990s, by the way.Adjusted for inflation, the estate tax restored to its level in 1998 would begin to touch estates valued at $1,748,000 per couple.That would yield approximately $448 billion over the next ten years-- way more than enough to finance ten years of universal preschool and two free years of community college for all eligible students.Our democracy’s Founding Fathers did not want a privileged aristocracy. Yet that’s the direction we’re going in. The tax on inherited wealth is one of the major bulwarks against it. That tax should be increased and strengthened.It’s time to rein in America’s surging inequality. It’s time to raise the estate tax.
A few months ago the Associated Press released a poll showing that most American voters are very aware that the wealthy aren't paying their fair share of taxes and that the burden falls on the shoulders of the middle class. It looks like the Bernie Sanders/Elizabeth Warren message has finally started making inroads in the collective consciousness of the country (if not the Congress).
According to the poll, 68 percent of those questioned said wealthy households pay too little in federal taxes; only 11 percent said the wealthy pay too much.Also, 60 percent said middle-class households pay too much in federal taxes, while 7 percent said they paid too little.Obama laid out a series of tax proposals as part of his 2016 budget released this month. Few are likely to win approval in the Republican-controlled Congress. But if fellow Democrats were to embrace his ideas, they could play a role in the 2016 race.One proposal would increase capital gains taxes on households making more than $500,000. In the survey, 56 percent favored the proposal, while only 16 percent opposed it.Democrats, at 71 percent, were the most likely to support raising taxes on capital gains. Among Republicans and independents, 46 percent supported it.
Since then Republicans have ratcheted up their war against the Estate Tax and are moving to abolish it entirely. If they keep control on both Houses of Congress and win the White House in 2016, there will be no Estate Tax, which is great news for around 5,400 wealthy families-- and bad news for everyone else. Killing off the estate tax would increase the deficit by $269 billion over a decade. On April 16, the House passed an Estate Tax repeal 240-179. Only 7 right-wing Democrats voted with the GOP:
• Brad Ashford (Blue Dog-NE)• Sanford Bishop (Blue Dog-GA)• Jim Costa (Blue Dog-CA)• Henry Cuellar (Blue Dog-TX)• Collin Peterson (Blue Dog-MN)• Dutch Ruppersberger (MD)• Kyrsten Sinema (Blue Dog-AZ)
The only Republicans to cross the aisle and vote with the Democrats were independent-minded Walter Jones and two Republicans in blue-leaning districts, both in danger of electoral defeats in 2016, Scott Rigell (VA) and David Jolly (FL), who is probably going to have to face progressive champion, Mary Mulhern.Only 0.2% of deaths in 2015 will result in even one dime being paid out in taxes by estates. And in most districts around the country that means zero. Republican congressmen are all worked up about rich people paying taxes even when none of those rich people live in their districts. Steve Knight in CA-25 is a good example. Not a single estate in Santa Clarita, the Antelope Valley or Simi Valley paid any of what Steve Knight calls "the death tax" yet Knight couldn't wait to cast his vote for burdening the country with another $269 billion deficit by abolishing it. Knight, of course, favors privatizing Social Security and cutting Medicare to make up for that deficit the GOP is purposely creating.Knight's Democratic opponent is former police officer Lou Vince, an Agua Dolce councilman. Vince is aware that responsible government owes the citizens a protection and infrastructure to help them thrive in a modern world. Unlike Knight, he's focus is on the middle class and working families, not on tax-phobic multimillionaires and billionaires in New York City and Silicon Valley. "If we've learned anything from our recent past," Vince told us yesterday, "it's that a trickle down economy just doesn't work. We need to grow our economy from the middle out. The estate tax will help reduce the concentration of wealth in just a few hands. I strongly believe in justice and that everyone deserves a fair shake. We need sound economic policy that works for all Americans, not just two tenths of the richest 1%. With Rep. Knight's recent votes against protecting military families from predatory lenders, against protecting the press from unreasonable governmental intrusion, and now voting to abolish the estate tax that hasn't even impacted anyone in our district, you've really got to wonder who he is representing. It's certainly not the interests of the hard working middle class folks that comprise the 25th. His votes make it seem as though he wants a privileged aristocracy, not a strong and vibrant middle class!"
