Faux-Progressive Robert Rubin's Estate Tax Bait-and-Switch
Robert Rubin and Julian Robertson sound like they're making sense in this Wall Street Journal column titled, "Bring Back the Estate Tax Now" (HT: DeLong):
Congress is finally turning its attention to the expiring 2001 and 2003 tax cuts. But there is one tax issue that should have long since been addressed: the federal estate tax. That tax expired at the end of last year, and there have been no estate taxes levied this year. If a new estate tax is not enacted as soon as Congress returns from its August recess, this void will continue until the end of the year.
We would recommend continuing 2009's regime, with a top rate of 45% and a $3.5 million individual exemption. Small businesses and family farms can be protected both through the exemption (which is $7 million for a couple) and through special deferred payment rules.
We both believe that the estate tax should be a component of any federal tax system. ... A key criterion in choosing taxes is to have the least negative impact on economic activity. The estate tax, in our opinion, meets that test. An estate tax can provide revenue—with little, if any, adverse supply-side economic impact—to fund deficit reduction, additional public investment or added assistance to those affected by the economic crisis. ...
We also share the view that the estate tax is grounded in powerful philosophical underpinnings. Our nation views itself as a meritocracy and a land of opportunity and we have a proud legacy of upward mobility. An estate tax helps us promote this legacy, by avoiding the accumulation of inherited economic—and political—power that is antithetical to this historical vision of our society and to the vitality and dynamism that has contributed so much to our success.What generous elites (or generous lizards?). Let me highlight this bit again:
We would recommend continuing 2009's regime, with a top rate of 45% and a $3.5 million individual exemption.What they don't tell you is that if Congress does nothing, then next year the estate tax will revert to its pre-Bush rate, which was 55 percent, and the exemption will drop back to a million bucks. So, they're stealthily calling for a permanent 10-point reduction in the estate tax rate and a $2.5 million increase in the exemption while posing as oh-so-reasonable progressives. (This was flagged by Ugga-Bugga.)