Personally, I don't think there's an argument to be made at all that tax cuts, in and of themselves, are stimulative. No sane person would turn down a chance to make a sizable capital gain, and will not wait until rates are lower. Making a ton of money is all the incentive most people need. They don't need tax cuts on top of that.

Also, there is the issue of fairness. As in, why should investment and pushing paper be taxed at a lower rate than labor? I don't think that's justified. At all. In fact, it's part of the dangerous swing toward hollowing out our economy and increasing the size of the Financial Sector. To me, the government should be in the business of promoting manufacturing. Real things. Actual things. Especially green manufacturing. That's a WIN/WIN. Creates jobs here, and helps the environment. Pushing paper around, by definition, knows no boundaries. It needs no ties to any nation. It doesn't rely on a successful economy to work. Brokers, for instance, make money regardless. That's a whole different animal than manufacturing something.

Also: there is a benefit to our economy if we reduce the gap between rich and poor. Several benefits. The macro benefit being the more consumers in the pool with disposable income, the better. If just a few people hoard the bulk of the wealth, the entire economy suffers.

Taxes are too low on the wealthy right now. They have too many ways of escaping their fair share. Most of us don't. Those of us with a regular job have little control over the amount taken out of our paychecks. When Capital Gains and estate taxes are cut, this just furthers the gap between rich and poor, labor and investment, etc.

It's bad for the country and bad economically.

Also:

The Media aren't doing their job at all when it comes to talk about the deficit. As you mention, it's absurd for so-called deficit hawks to also push for tax cuts. The two things are in direct opposition. Someone is not serious about cutting the deficit if they also want to cut taxes. Cutting taxes CREATES deficits.

The Media and politicians with guts should constantly spell that out. It's all too obvious.

You aren't serious about cutting the deficit if you also want to cut taxes.

Blanche Lincoln (D-WalMart) needs to worry more about her impoverished Arkansas constituents and less about the Walton family.

This argument that says government should cut spending because that's what families do is nonsense. Blanche's family isn't responsible for the whole neighborhood. The government is, at least to the extent that it can be.

Furthermore, if the government cuts spending in response to the economic downturn, it may, however modestly, save the government some money in the short term. But as the economy continues to fail because nobody's spending anything, the government's revenues will fall even further. Which will require more spending cuts. Eventually, we just won't have a government. The only people who will be able to get the services government used to provide will be the very rich.

Welcome back to feudal-land. And by the way, once we get there, the new barons won't need servants like Bayh, Lincoln, and the congressional Replicants anymore. Won't need Rash Lardbaughl anymore, either, but they may keep him on as a jester. At severely reduced pay.

Hope Blanche likes scrabbling in the ditch with the rest of us.

H
Very well said as usual! But I think, odd as it seems, that the alleged injury done by the estate tax is not supposed to be to the heirs--who, if they are lucky enough to be in line for estates worth millions of dollars, do exceedingly well even under the present system--but to the dead person who wills his or her fortune to them. (Hence the expression 'death tax'--the bastards won't even let you alone when you're dead.) This isn't completely absurd. As you will of course know, there is a line of thought going back at least to Aristotle according to which, e.g., a man's reputation can suffer after his death in a way that is a wrong to him, and we do think violating a person's will is an injustice to the person whose will it is. But that said, failing to privilege the dying person's wish to make his or her offspring filthy rich hardly seems like it belongs in the same class.

Another thought. Putting aside fantasies about elves, I think in the real world, i.e., the world as it inescapably is, one shouldn't mind, let alone, hate paying taxes. It's one of the most important ways in which we do our bit. I think there must be a kind of libertarian illusion that makes people hate tax, a tendency to see taxes as an accidental feature of human life, an unfortunate contingency, rather than the inescapable price of civilization. When imagining the way things could be, why imagine away taxes rather than daydreaming about having a larger income, say, out of which, it goes without saying, I would be paying taxes as one always does?

"There's a reasonable argument for cutting taxes on capital gains and income"

I've yet to see it.

* Under the current capital gains rate, 98.3% of the benefits go to the top 20% of taxpayers. The other 80% of taxpayers see only 1.7% of the benefits.

* When there was a cut in the capital gains tax in '97, the SBA reported that the creation of small businesses remained virtually unchanged from well before the cut to well after it.

There's no rational reason why the capital gains rate should be lower that the rate on earned income.

Only the estates of 2.8 of every 1,000 people who die would benefit from the Lincoln-Kyl proposal

Or, to put it in more useful terms, only the heirs of 0.28% of people who die would benefit.

If the Waltons want to pass on passels of money to their offspring, I suggest they go out and hire a tax accountant and a trust lawyer, like decent rich people do, instead of getting their pet Senator to pass stupid laws for them. Seriously, if they can't figure out how to structure their finances to avoid the tax as it is, then ..., well frankly, they don't deserve the money. It's not like the current rates and exclusions are draconian.

And if the "working families of Arkansas must" "tighten their belts and make sacrifices" shouldn't the Waltons also?

Or, Arkansas Sen. Blanche Lincoln will make sure the Walton kids thank her when daddy croaks and bequeaths the Walmart empire to them...

But 99.72% of Americans will still mourn their dead as normal human beings, without focusing on 'benefits' in their moment of grief.

Lincoln screwed up her own analogy!

"From time to time, though, even those who plan ahead and make prudent saving decisions may face a household emergency that requires them to seek a loan or use a credit line to help them through a rough period."

This would be like the government borrowing to stimulate demand during a recession. The repayment begins later, when the family has weathered its emergency, just as the government should reduce the deficit during good times. To extend the analogy, during the good times when the family had money, the drunkard father (Bush) blew the cash meant to repay the loan on a sports car instead.

I'm just astounded that sitting US senators don't understand that government spending should be countercyclical.

Get this,

Japan has 160Mps broadband at $60 a month.

It cost the cable company $20 per household to upgrade their equipment.

Read it here,

http://bits.blogs.nytimes.com/2009/04/03/the-cost-to-offer-the-worlds-fastest-broadband-20-per-home/

What do you want to bet that a lot of that tiny fraction of uber-wealthy people who would benefit from this bill are the very ones that contribute vast amounts to finance the Republican machine that is so bent on destroying this country?

I'll bet Bayh and Lincoln know who I'm talking about. Bastards.

biggerbox is spot on with this one. The whole estate tax brouhaha has been cooked up almost exclusively by the Walton family. They've spent an estimated $200 million trying to get the estate tax dropped because they will make $70-80 billion. It's been a good investment on their part.

But Warren Buffet is right when he's spoken out against removing th estate tax. We are a meritocracy at present and moving toward plutocracy. We want to remain a society that rewards talents and achievements, not inherited wealth and power. Clinton or Obama is a President by merit, Bush is the President by wealth or family connections. How many more Bushes do you want making important decisions for our country?

Won't need Rash Lardbaughl anymore, either, but they may keep him on as a jester. At severely reduced pay.

What's the deadweight loss from the estate tax? I seem to remember from the first go-around (when I was a Bush supporter and therefore more inclined to support it) that it was vanishingly small.

Anyone know the numbers?

The Media aren't doing their job at all when it comes to talk about the deficit. As you mention, it's absurd for so-called deficit hawks to also push for tax cuts. The two things are in direct opposition. Someone is not serious about cutting the deficit if they also want to cut taxes. Cutting taxes CREATES deficits.

The Media and politicians with guts should constantly spell that out. It's all too obvious.

Here's where I go all "lemme 'splain something to you Lucy".

The media and Republicans and Blue Dogs don't give a rat's ass about deficits. No, what they care about is inflation.

That's because they're all rich, or represent the interests of rich people. And rich people are bond investors. Bond investors hate inflation like the Devil...whereas deflation, which is the most miserable thing imaginable for 99.999% of people, is wonderful for bond investors.

Remember that chart from the stimulus debate, showing how food stamps are the best form of stimulus and capital gains tax cuts are the worst?

Social spending has a strong multiplier effect. It's more potentially inflationary. Tax cuts have very little multiplier effect. They boost your after-tax earnings and still let the economy sink into a deflationary spiral.

Therefore, all deficits are not created equal. For bond investors, tax-cut-driven deficits are not so bad. Spending-driven deficits are very bad.

Ah, but there is no limit to the influence and power of the members of the Lucky Sperm Club!

Cuchulain hit the nail on the hit.

The estate tax was imposed in the first place because there was a recognition that over-concentration of wealth into fewer and fewer hands is ultimately detrimental to the economy. The estate tax is one means the government has to put the brakes on over-concentration of wealth; progressive income taxes and capital gains taxes are the others. All of those have been slashed to the bone and guess what? The utterly predictable thing happened - too few people now control too much of the money, the rest of us have had to borrow from them just to stay afloat the past 10 years, and a lot of people can't pay it back - leading to the credit crisis.

The "death tax" tripe has always irritated me no end. Dead people don't write checks - they're dead, and they could care fuck-all about anything at that point. They use this terminology to boost their ridiculous argument that it's somehow "unfair" that the money "gets taxed twice". Uh, no, it doesn't - it's treated like every other dollar in the economy - it's taxed when it changes hands. Such as when rich dude dies and the money goes to his heirs. At base, the argument is that Paris Hilton shouldn't have to pay any taxes, even though she's very wealthy without ever having worked, but you and I should pay full freight on every dollar we earn doing actual useful work. Paris' daddy or granddaddy isn't being "taxed twice" because it's not his money anymore. Paris isn't taxed twice because the money belonged to someone else when it was taxed before. Just like I pay income taxes on my earnings, then spend some of my money at the grocery store, where I pay sales taxes, then when the cashier at the store gets a paycheck in part underwritten by money I spent at the store, she pays taxes on her income as well.

In short, the Republican argument (and make no mistake, Miz Blank IS a Republican in all but name) is one that only makes sense to stupid people who have no idea how the estate tax works. Since stupid people are the natural constituency of the Republican Party, expect this moronic argument about the "unfairness" of "death taxes" to continue ad infinitum.

The whole business is Senator Lincoln carrying water for the Waltons. They control between the five ofthem some $140 billion from their able-to-take-a-nuclear-strike compound. These wonderful people promote the policy that their employees should not talk to each other during work hours on the grounds they are "stealing" company time by so doing. When the Wal-Mart associates had a national campaign to raise money within the company to take care of associates who fell on hard times, the entire Walton family gave the princely sum of $6,000.00.

A better argument for the confiscation of generational wealth cannot be found than these far-right scum.

INHERITANCE TAX not "estate tax".

Learn to use the correct lingo.

If everyone called it the INHERITANCE TAX, or more correctly, the "TAX ON VERY LARGE INHERITANCES" then public opinion would overwhelmingly support it.

Which is why the Heritage Foundation introduced the term "estate tax" in the late 1970s. Unfortunately American media adopted the term.

INHERITANCE TAX. You see that term on your Monopoly Community Chest cards -- that's because until the 1970s THAT'S WHAT IT WAS CALLED.

When will liberals wake up and realize how to play this game?

slaney,

"What's the deadweight loss from the estate tax? I seem to remember from the first go-around (when I was a Bush supporter and therefore more inclined to support it) that it was vanishingly small. Anyone know the numbers?"

In 2000, before Chimpy and the Republicans started rolling it back, it brought in what would be about $25 billion in inflation-adjusted dollars.

"Which is why the Heritage Foundation introduced the term 'estate tax' in the late 1970s. Unfortunately American media adopted the term."

The IRS references it as the ESTATE TAX:

U.S. Estate Tax

Leave no trust fund millionaire behind! The Senator from Walmart is sooooo transparent. Guillotines all around!

I don't buy the argument that reduced taxes on capital gains & income are part of a legitimate incentive for work & investment.

Neither more effective work nor investment should be motivated by "a scheme to reduce taxes". But, if they are, then why isn't a reduced estate tax merely another part of the same scheme?

Well, cool, that's interesting, but there is a legal jargonistic difference between an inheritance tax (as New York has) which taxes each person who inherits on how much he/she inherits, and an estate tax, that taxes the deceased's entire "estate" before distribution.

Still the point is correct that the dead don't pay tax.

And what pisses me off about all this "tax twice" bs is that MOST of large estates is untaxed capital gain. Capital gain is wiped out by the estate tax code (new basis is date of death value), so the only solution to reducing the estate tax is retaining the deceased's basis. Do these idiots in Congress have any idea what a nightmare that turned out to be when it was tried before? They hurriedly went back to date of death value, I can tell you that.

As for Tester, I wonder if he's concerned about the increase in raw land value due to Hollywood celebrities buying ranches as vacation homes? The current estate tax code takes working assets into account and allows them to escape taxation as long as the family business operates for 10 years after death. That should be enough.