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December 31, 2012 12:16 PM The Blessed 2,700

By Ed Kilgore

Of all the disputes involved in the ongoing fiscal talks, one that is of transcendent importance to the GOP is the estate tax. If you want to get angry today, consider these numbers provided by WaPo’s Zachary Goldfarb concerning the differences between the administration and congressional GOP proposals:

About 99.9 percent of deaths do not involve people with estates large enough to be taxed. Because of the high threshold, only 3,500 households are set to pay the estate tax this year. Because it mainly affects the ultra-wealthy, the average tax paid is estimated at $3.3 million.
Under the Republican proposal, 3,800 people would pay the estate tax year, also near an average of $3.3 million. The GOP proposal would raise $182 billion for federal tax coffers over the next 10 years.
Under Obama’s proposal, 6,500 people would pay the estate tax next year, with an average payment estimated at about $3 million. The president’s proposal would raise $284 billion in tax revenue over the next 10 years.

So if (as appears to be the drift in the latest reports of negotiations) the GOP prevails, 2,700 Americans would benefit at a ten-year cost of $102 billion. By rough arithmetic, that works out to an average ten-year benefit of a bit over $37,777,000 for the blessed 2,700 and their heirs.

The crazy thing is that the overall politics of the estate tax have actually moved in a progressive direction in recent years. Ten years ago and even less, Republicans were hell-bent on repealing the estate tax entirely (which was the original idea in the original Bush tax cuts); much of the media were echoing the Luntz framing of the levy as a “death tax;” and a shocking number of Democrats were in the mood to cave entirely. Teddy Roosevelt was rolling in his grave. Now he’s just restlessly raging.

Ed Kilgore is a contributing writer to the Washington Monthly. He is managing editor for The Democratic Strategist and a senior fellow at the Progressive Policy Institute. Find him on Twitter: @ed_kilgore.

Comments

  • Ronald on December 31, 2012 12:25 PM:

    Yep. Rather appalling.
    And not in the least bit surprising.
    Republicans are in power simply to protect the wealth of a handful of Americans.
    It is the agenda they've had for a long time. They kept it hidden, sort of, for a while. This year, though, they've just done away with pretense.
    Hell, Mr. Romney's entire campaign was based on protecting that wealth.
    Appalling.

  • c u n d gulag on December 31, 2012 12:30 PM:

    If they don't have this money, how can the Walton heirs continue to aquire billions of dollars by paying workers sh*tty salaries, with little or no benefits, to stock shelves with cheap foreign-made junk, if we deprive them of some, what to them must seem like couch cushion, or car seat, money?

    It's obviously the principle of the thing.

    Tax heirs at 80%

  • howard on December 31, 2012 12:40 PM:

    of course, unless there is a major change to citizens united, those 2700 households alone can bankroll the republican party as it currently exists for the entire decade, so it's helluva good cost-benefit investment by the gop.

    (after all, what are the odds that the median american, much less the median republican household, will ever know how few households the gop is so desperately fighting for?)

  • Quaker in a Basement on December 31, 2012 12:47 PM:

    that works out to an average ten-year benefit of a bit over $37,777,000 for the blessed 2,700 and their heirs.

    Not unless ol' grandad dies each and every year for those ten years. If I understand your cites correctly, we're talking about 2,700 estates per year for 10 years, or 27,000 instances.

    Right?

  • Kathryn on December 31, 2012 1:03 PM:

    So would it not be reasonable for every Democrat near a microphone to point out those numbers constantly, from the President on down. No matter what the question, repeat the hard numbers that Ed has written about in "The Blessed 2,700". And while they're at it, when someone filibusters Harry Reid's attempt to bring up the middle class tax cuts for a vote when these latest talks fail, every Democrat or surrogate should start their interviews with the phrase up or down vote and explain that one GOP senator can cause taxes to go up for 98% of the public and one GOP Speaker of the House (the entire house, not just the Republicans in the house), can refuse to vote to maintain the tax rates for 98% in order to protect the top 2% or whatever it is, less than 2% I believe. Many, many voters do not understand those two facts, explain in clear short sentences.

  • Robert Waldmann on December 31, 2012 6:03 PM:

    The arithmetic is off by a factor of over 10. the 2,700 is one year's deaths with estates 3.5 to $ 5 million. The dollars are for 10 years (with increased estates and slightly more deaths over time). The correct calculation would be ($3,000,000*6,500-$3,300,000*3,800)/2,700
    = ($19.5 billion - $12.540 billion)/2,700 = 2,583 if I calculate correctly.

    Your calculation is not correct even for millionaire cats with 9 lives.