Senate Republican leader Bill Frist, R-Tenn., is at it again. Like a parent eager to have his child married and out of the house, he is determined to hitch his proposal to gut the estate tax to another bill – any bill – that can win enough votes to pass the Senate.
Frist is like a parent who knows his offspring is shunned by polite society and hopes that marrying his child to some more respectable figure will solve the problem. His plan to get rid of most of the estate tax is becoming rather unpopular as people figure out that it allows those inheriting tens of millions of dollars to pay little or no tax, while the rest of us pay taxes on every dollar of our hard-earned wages. So Frist has gone matchmaking.
Last month, Frist collaborated with the House to attach a tax giveaway for timber companies to the estate tax legislation. Those who don’t follow Congress may wonder what on Earth timber companies have to do with the estate tax. Actually, even those of us who do follow Congress wonder that. The timber provision was apparently an attempt to garner the votes of Democratic senators Patty Murray and Maria Cantwell from Washington state, where timber is an important industry. The provision would give $940 billion to timber companies over two years and, as argued by a recent Citizens for Tax Justice analysis, would revive a harmful loophole that was closed in the 1986 Tax Reform Act under President Reagan.
When Frist discovered he still didn’t have the Senate votes he needed, he decided to try to attach his estate tax cut to a pension bill that changes the rules governing how much corporations have to put aside to protect their employees’ pensions. But few of the lawmakers who have been painstakingly negotiating that bill wanted to see their work jeopardized by having it attached to the controversial estate tax cut. Olympia Snowe of Maine, one of the Republican senators negotiating the pension bill, refused to sign off on a deal that included the estate tax cut, effectively killing that strategy.
Now we hear that Frist wants to attach his estate tax cut to a package of corporate tax break extensions. These loopholes are very popular with politicians for campaign-finance reasons, even though most of them are of dubious economic value at best. But whatever the economic merits or demerits of giving still more tax concessions to corporations, it’s hard to swallow Frist’s argument that repealing most of the estate tax belongs in the same bill.
To be sure, Frist’s chief of staff did recently opine that “the death tax and the extenders fit perfectly together.” But he must have been kidding. After all, the estate tax is a tax on the estates of dead multimillionaires. It’s hard to think of a tax that affects economic incentives less than that. Indeed, in a recent Treasury report that tried (and failed) to prove the economic value of the extending the Bush tax cuts, the effects of estate tax repeal were completely left out – because Treasury couldn’t find any measurable economic gain from repeal. So what is Frist’s plan to gut the estate tax doing in a corporate tax cut bill that’s allegedly designed to help the economy?
Frist appears determined to get his estate-tax-gutting bill married to some other legislation somehow. But he has a big problem. At most weddings, the officiant asks if anyone present objects to the union being formed. Unfortunately for Frist, a lot of senators will be raising their hands.
ABOUT THE WRITER
Steve Wamhoff is a policy analyst with Citizens for Tax Justice, 1616 P Street NW, Suite 200, Washington, D.C. 20036; Web site: www.ctj.org.
This essay is available to McClatchy-Tribune News Service subscribers. McClatchy-Tribune did not subsidize the writing of this column; the opinions are those of the writer and do not necessarily represent the views of McClatchy-Tribune or its editors.
(c) 2006, Citizens for Tax Justice
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