Tax cut just part of a GOP shell game

April 12, 2001|By Tom Teepen

ATLANTA - The move by House Republicans to bump the administration's repeal of the estate tax to 2011 shifts President Bush's tax-cut program from a mere political flimflam into outright fraud.

The point of the dodge is to keep the Bush tax cut over 10 years within the $1.6 trillion limit the president set. (The real cost to the Treasury, for a variety of reasons including increased federal interest payments, would be between $2.2 trillion and $2.5 trillion, but that's another scam.)

By booting the estate tax repeal ahead, beyond the 10-year line, the short-term costs of the tax cut are lowered from the $662 billion the Joint Tax Committee had estimated to $186 billion. But the cost in the next decade explodes to $1.3 trillion, according the Center on Budget and Policy Priorities.

And all of this - is why?

To spare Americans a "death" tax, as the new lingo has it, that keeps them from passing the fruit of their hard work to their children and that finds the government - chuckling like the stock villain with Little Nell lashed to the railroad tracks - gleefully confiscating family farms. After all, what could be meaner of the evil federal government than taxing death itself?

These would be very good points, if any of them were true. None is.

Take those disappearing family farms. As the New York Times recently reported, data from the Internal Revenue Service shows no working family farms taxed out of business in 1999. (A relatively few large ranches, some probably hobbies for the rich, did get nicked.)

The American Farm Bureau Federation, though it supports the estate tax repeal, concedes it knows of no family farm, not one, lost to estate taxes.

And, of course, the "death" tax is no such thing. The bogeyman term is the creation of a politics that has a vested interest in doing away with the estate levy - a mix of rich guys and anti-tax, anti-government ideologues.

The first $675,000 of an inheritance is not taxed - already scheduled to go to $1 million in '06 - and couples can leave $1.34 million before triggering the tax. Ninety-eight percent don't pay a dime.

The estate tax is paid only by the richest 2 percent and even then, although its rates can go up to 55 percent, the average bite is 25 percent - hardly confiscatory.

The real objective of the Bush tax-cut package is to accomplish the longtime right-wing goal of defunding the government.

The right has dropped that term. It jollied true-believer conservatives, but scared workaday folks. The ambition, however, remains unchanged.

The idea is to so lower federal revenues and to so run up military spending that in time discretionary domestic spending - the social programs that work at the common good - will be squeezed out.

Thus Bush's decision to defer his promised boosts in military spending until the tax cuts are in place, so that the combined effect on other spending is masked. Thus, too, a tax program that lavishes its big benefits on the rich and is back-loaded, so its real costs are hidden in the out years.

The difference between this sort of politics and a sidewalk shell game is, at best, subtle.

Tom Teepen is a columnist for Cox Newspapers. His e-mail address is teepencolumn@coxnews.com.

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