Congress cuts Food Stamps, maintains Estate Tax Loophole worth $100 bn to the Rich

(By Juan Cole)

You know how the Tea Party House of Representatives obsessed with cutting food stamps to working families and veterans and children this fall? They were trying to save $4 bn. At the same time, they have kept in place a piece of fatally flawed legislation regarding estate taxes that has cost the government $100 bn and counting, and which threatens our democracy.

A 1990 law passed by Congress seeking to close a loophole in the Estate Tax ended up having an even bigger loophole that has cost the government $100 bn in taxes.
A 1990 law passed by Congress seeking to close a loophole in the Estate Tax ended up having an even bigger loophole that has cost the government $100 bn in taxes.

The Estate Tax was created in 1916 in an attempt to forestall the rise of an American hereditary aristocracy of barons, especially robber barons. But the 1990 loophole allows the superwealthy to avoid Estate taxes and pass their obscene wealth on to the next generation, stacking the deck in society against anyone not born with a silver spoon in their mouths.

The Paul Ryan Congress is nickel and diming the American people into hunger and insecurity in the name of avoiding Federal budget deficits. But the House has done nothing about this massive hole in the side of the ship of state through which $100 bn in revenues has flowed out to people who don’t need it.

Not only do the Walton heirs of Walmart fame have as much wealth as the bottom 30 percent of the entire US population (100 million people), but it is increasingly certain that the Waltons will be able to pass most of that on to the next generation.

Europeans and Canadians now have a greater hope of moving up in social class than do Americans, who are becoming frozen in place in dead-end jobs (like the ones at Walmart).

Related video:

Warren Buffett: The Estate Tax is not a “Death Tax” (the billionaire favors the pre-1990 estate tax for reasons of social equity.)

7 Responses

  1. miasmo

    Congress = a bunch of millionaire douche bags serving billionaire douche bags. I wish we could give democracy a try.

  2. There’s the myths, and then there’s the Deeper reality…

    Too bad that when enough finally gets to be enough, the spasm of reaction almost uniformly leads to Really Ugly. With a climbing arc of misery and repression for the Most, and obscene titillation for the Few, right up to that sudden inflection in the social “curve of binding energy,” and the nuclear release that follows the breaking of the momentum that holds cultures more or less together.

  3. “You know how the Tea Party House of Representatives obsessed with cutting food stamps to working families and veterans and children this fall? They were trying to save $4 bn. At the same time, they have kept in place a piece of fatally flawed legislation regarding estate taxes that has cost the government $100 bn and counting, and which threatens our democracy.”

    Don’t forget the $607 billion for our war department / military-industrial junta. If this obscene display of our national priorities is not a sign of moral degradation and societal decadence, what is?

  4. An old, well maybe new, Irish proverb.
    Just in case you were wondering, the last sentence is relevant to Professor Cole’s article.

    “Tax his tractor, tax his mule; tell him, taxing is the rule.
    Tax his car, tax his gas, tax his food, tax his cash
    Tax him good and let him know, that after taxes, he has no dough.
    If he hollers, tax him more; tax him till he’s good and sore.
    Tax his coffin, tax his grave, tax the ground in which he’s laid.
    Put these words upon his tomb, “Taxes drove him to his doom.”
    Once he’s gone, we won’t relax, till we collect the inheritance tax.”

    • And yet, after taxes, the wealth of property owners and investors keeps skyrocketing while our economy performs worse and worse. Is this your idea of meritocracy?

    • Current policy is doing exactly to the vast majority. None of this applies to the top. They have simply exempted themselves. Of course they will use all the infrastructure that others paid for and then buy it back at pennies on the dollar and then charge us all over again to use it. It is happening as we speak in many cities as public parks etc. are being auctioned off. Talk of a rigged system…

  5. The issue of greater meritocracy in Europe and Canada is the really revealing part. The Reagan dogma that has ruled all our lives says that the greater inequality of ultra-capitalism will be rewarded with more mobility for those who are “deserving”. Yet Europe, with greater equality and government interference and taxation, is becoming the easier place to get ahead. Is it possible that the real goal of American conservatism for the last 40+ years has been to restore the class/caste system of the old days that they so loudly proclaim were better than now, by leaving our children too hungry, developmentally-handicapped and uneducated to compete with their fat, vicious spawn? Next thing you know, we’ll be turning over all public services to the rich, and only allowing the rich to be electable, and letting their kids get away with running over peasants because the rich are too important to be expected to learn about personal responsibility.

    Oh wait…

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