Statement from 60 Plus Chairman and Founder Jim Martin at the Sen. John Thune (R-SD) and Rep. Kevin Brady (R-TX) Death Tax Repeal Press Conference, June 19, 2013 3:00pm, Room S201 Capitol Visitor’s Center:
The 60 Plus Association, on behalf of more than seven million seniors and hundreds of thousands of small businesses across the country, thank most sincerely today’s Members of Congress from both parties, who are acting in a truly bi-partisan spirit, to repeal one of the most unpopular and unfair of all taxes.
The overriding question of the day: In the midst of gridlock, here is a wonderful, golden, opportunity to work together. The precedent is already there. In 2005 when repeal passed by over a 100 vote margin in the House, over 40 Democrats, including eight members of the Congressional Black Caucus, voted for outright repeal. Surely, these members cannot be accused of providing a “tax cut for the rich.” Bottom line, it’s not a tax cut for the rich. That horse is dead, so to those die-hard partisans out there, dismount! Take off the blinders. The rich, across the political spectrum, set up trusts and foundations to avoid the tax, and who can blame them? Oprah Winfrey on the left, Pat Boone on the right– ever heard of Foundations for Gates, Buffett, Rockefeller, Turner, and so on?
Over the past 20 years, we’ve made great progress, moving the exemption from $600,000 to $5 million+ dollars. The rate has gone up and down, from 55% to 0% and now back to 40%, but it occurs to me that what we’ve actually does is made a lot of work for lawyers and lobbyists. The latest rate of 40% has been labeled “permanent”, but there’s nothing “permanent” in this town, except taxes. Not 90 days after the “permanent” 40% rate was agreed to, President Obama proposed raising it to 45% and lowering the exemption from $5.25 million to $3.5 million. More work for lawyers and lobbyists!
While I’m credited with re-naming the estate tax the “death tax”, truth be told, Ronald Reagan said it earlier, but even the Great Communicator was not the first. I do take pride in moving death tax repeal from one goal line to the other, working over a 20 year span with former Rep. Chris Cox of California and former Senator Jon Kyl of Arizona, when there were fewer than two dozen true believers. Now leading the repeal effort are Rep. Kevin Brady of Texas and Sen. John Thune of South Dakota. 20 years ago, only one Democrat, Nick Joe Rahall of West Virginia, co-sponsored repeal.
Again, here is a truly bi-partisan opportunity for Congress to work together to repeal a tax that cuts across philosophical lines, with many liberals and conservatives supporting total repeal, along with better than 70% of the voting public. It’s a terrible tax that does more harm than good.
While Congress has a penchant for literally taxing anything that moves, it has actually outdone itself — taxing things that don’t move!
I quote USC law professor, Edward McCaffrey, who testified years ago to keep the estate tax. McCaffrey is a self-described “unrequited liberal”, who said at that time that he was for retention of the estate tax, but he has now come to the realization that economic studies show that, as he put it in a Wall Street Journal article, this is a tax that “liberals should love to hate.” His point being that by leaving the estate tax with its rightful heirs, one of several good things will occur; money would be invested in start-up businesses or used to expand existing businesses, that such activity would create more jobs, thus more workers paying more taxes.
In more than 50 years on Capitol Hill, first as a reporter covering Congress when John Fitzgerald Kennedy was in the White House, and yes I filed many stories of that tragic moment in our nation’s history, then working in the House and Senate, and now as an activist, I’ve witnessed, and reported, on a lot of history. I’ve also seen a lot of taxes come, but not many go. If ever there was a tax whose time to go has come, it is most assuredly the death tax, a tax that raises minimum revenue, a tax that robs the economy of capital which means fewer jobs, thus less tax revenue for the government. It’s a tax that breaks up family-owned business, and it’s a cruel tax as well, if you’re trying to say farewell to a recently deceased loved one while Uncle Sam, not even a blood relative, in the guise of IRS agents, is knocking on your door with greedy outstretched hand.
The history of this tax shows that it was a temporary tax, always enacted 4 times for defense purposes—1797, 1862, 1898, and 1916—and, as a temporary tax, it was repealed shortly after hostilities ended the first 3 times. However, in 1918, at the conclusion of WWI, Congress conveniently forgot to repeal this temporary tax for defense efforts.
There was another precedent in 1898. To help finance the Spanish-American war, a tax was imposed on the wealthy if you will, since it was a tax on telephones, with only some 15,000 phones in the entire country. By the year 2000, with well over 300 million phones in the country, the telephone tax was bringing in a nice sum of money to the Treasury. Since a telephone tax impacts low-income seniors as well as all age levels, 60 Plus worked along with others, including Americans for Tax Reform, to repeal that tax. Congress, in a truly bi-partisan spirit, with Rep. Rob Portman (R-OH) and Rep. Robert Matsui (D-CA) as chief co-sponsors, voted to repeal the telephone tax.
Thus, the new game plan for death tax repeal is to keep getting more and more Members of Congress, in a spirit of bi-partisanship, to vote to repeal the “temporary” death tax that was imposed way back in 1916 to help finance WWI.
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