AFF Sentinel Vol.3 #13

Rural Senator Could Have Turned the Tide - Refused

When something is so important, so obvious, as Death Tax repeal - and the august U.S. Senate shows neither economic intelligence or voter responsiveness, should we laugh or cry? Economic commentator Larry Kudlow doesn't know either in a wonderful-sad satire after the Senate vote. In, "Hooray for the Death Tax!" (National Review Online, 06/06/06), Kudlow insists we need to attack rich people and "abolish wealth, which is a tremendous drag on the economy." He suggests we could impose jail sentences on rich people or throw paint on them when they go out, much like PETA does to fur-wearing people.

Knowing they couldn't defeat repeal, the Senate leftists deemed saving the Death Tax worthy of a filibuster, requiring 60 votes to break. The minority rules.

And the Senators who are totally clueless don't all hail from the usual suspect places like California, New York, Massachusetts or New Jersey.

Kudlow notes that among the nations that have no estate tax are China, the Czech Republic, Estonia, India, Indonesia and Mexico.

"Did I say Mexico? That's perfect. Instead of creating thousands of new businesses and millions of new jobs in America, our rich can do this for Mexico. If we deport them, that is. What a great idea!"

He suggests we're hanging out a sign: "Capitalists are unwelcome in the U.S."

In his satiric mood, Kudlow eventually shuffles off to plan a big birthday celebration for Karl Marx - the greatest soak-the-rich advocate of all time.

It doesn't take Senate genius to see the Death Tax is a bad thing. The economy needs capital to operate, businesses to hire workers and continuity of succession to stabilize the money-making machine. And it's not just crippling or eliminating family companies. As a National Center for Policy Analysis analysis found ("We All Pay for the Estate Tax," Stephen J. Entin, www.ncpa.org), the estate tax raises little revenue, but hurts everyone by reducing capital formation, thereby lowering productivity, wages, employment and federal revenues from payroll and income taxes.

Income taxes already discourage saving and investment, and the death tax is just piling on. Entin said Dan Miller of the Joint Economic Committee of Congress estimated the old estate tax reduced total capital by $500 billion.

Entin said the Heritage Foundation calculated death tax repeal would, on average, annually generate $11 billion in output, create 14,500 new jobs and increase personal income by an average $8 billion. The extra growth would more than compensate for death tax revenues and shrink the deficit. And, contrary to the rich benefiting from killing the death tax, its existence depresses job growth for the poor and hits small businesses, newer companies and startups the worst, including many minority-owned small businesses.

Entin noted one study found that, among the wealthiest five percent of Americans, 92.5 percent of the wealth was earned or saved; only 7.5 percent inherited. The middle class loses a greater share of their estate value than the super rich. Death should not be a taxable event. Even if the exemption level is increased, businesses must spend thousands on attorneys and accountants to prove they're exempt.

A blogger, Steve Antler (econopundit.com), noted another irony. Once, America had lots of small, family businesses and farms that were passed down through the family for generations. The death tax has been a key weapon in destroying those family businesses and replacing them with... chain stores.

"So the next time some smart social reformer demands you watch his heart bleed for all the small local businesses Wal-Mart is killing, just ask him - "so what do you think the inheritance tax is doing?"

Called to account should be rural state Senators who give lip service to family farms and then vote with the leftists and elitists against capitalism. So which rural Senators joined with Kennedy, Kerry, Boxer, Feinstein, Durbin, Obama, Reid, Leahy, Finegold and Byrd to vote against even considering Death Tax repeal? Harkin from Iowa, Conrad and Dorgan from North Dakota, Johnson from South Dakota, Salazar from Colorado, Pryor from Arkansas, Bayh from Indiana and Bingaman from New Mexico. Several of the latter are those who often back legislation against the free market, extend government intrusion into the food production chain or give cheer to those who hate the thought of agriculture as a business.

We need to keep our capitalist family businesses. But maybe Kudlow is on to something... deportation... Senators... hmmmmm... Would Senators try harder to please the majority if they were meeting in Juarez, trying to earn their way back into our good graces and the U.S. of A.?

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