GOP seeks to revive estate-tax repeal with timber tax cut strategy

[WinterBybee]

GOP seeks to revive estate-tax repeal
With timber tax cut strategy in the Senate

By Roger Bybee and Carolyn Winter

Just when progressives were complimenting themselves on last week’s victory of stopping the estate tax repeal, House Republicans are once again frantically rushing to the rescue of the heirs of multi-millionaires. On Thursday, the House passed yet another effort to nearly eliminate the estate tax.

This new proposal stops just short of full repeal and allows the Senate another chance to take up the issue. This latest attempt would eliminate the tax for all estates worth less that $5 million – up to $10 million for couples. Edmund L. Andrews reports in the June 21 New York Times that this would exempt more than 99.5 percent of estates according to congressional estimates. As if this weren’t enough, the new bill reduces most of the remaining tax rates to the level of capital gains taxes or approximately 16%. The total effect is to dramatically reduce estate tax revenues by about 80%, or roughly $800 billion over a decade.

The GOP’s method to resurrect estate-tax repeal from the ashes involves a tax sweetener for timber companies, aimed at influencing Democratic representatives from the Northwest. This maneuver is like adding sugar and cream to the richest dessert in town. To win passage of the near-total repeal of estate taxes, the Republican ploy is to gain additional votes needed in the Senate by offering even more tax giveaways, hopefully entrapping Northwestern Democrats in a politically difficult situation.


The proposed provision for big timber companies would reduce the corporate capital gains tax, which is assessed on sales of timber, to about 14 percent from 35 percent. . By hauling out their chainsaws to slash taxes on timber companies to the tune of $940 million over two years, the GOP leadership hopes to win over Democrats from timber-producing states.

However, these new tax cuts overlook the fact that major timber giants like Weyerhaeuser and Georgia-Pacific have often avoided paying any federal corporate taxes at all and collected tax rebates, as pointed out by Citizens for Tax Justice. But this reality appears to be utterly irrelevant to the debate in Congress.

Strategically, two of the timber industry’s strongest advocates are the Democratic senators from Washington, Patty Murray and Maria Cantwell. They both voted with other Democrats against blocking a filibuster on the estate tax. In addition, Mark Pryor and Blanche Lincoln of Arkansas and Mary L. Landrieu of Louisiana were co-sponsors of a similar timber tax cut last year.

Will we now witness a downward spiral in Congress where narrow regional self-interests ensnare Congress into undermining the broad national good? pit the entire Congress against the well-being of the government and the public? The more the Democrats cave into the Republicans’ most extreme version of trickle-down economics with cowardly “compromises,” the less exertion is required by the Republicans to placate their corporate donors.Where will it end?

Given the Republican penchant for expensive wars like the apparently endless Global War on Terror, one can only wonder how they imagine funding even the most minimal public services if taxes on the wealthy are slashed even further. Are Republican leaders assuming that their big contributors are so wealthy they don’t need roads, only air strips for their private jets? Private security forces for their gated communities, not public police or fire services?

If the GOP leaders’ dreams come true and government spending is shaped exclusively by the whims and desires of the wealthiest 1%, how do they envision keeping this from inevitably igniting a powerful reaction from the public?

The media has given the Republicans an easy time in their efforts to misrepresent the benefits of these tax breaks to the overwhelming majority of working people. A frank economic analysis by the major media of who stands to gain and lose would be viewed as an unacceptable departure from “objectivity,” since the figures so strongly reinforce progressives’ arguments. However, even the cowed media will eventually be forced to acknowledge streets filled with hungry and homeless people, roads that are falling apart, t shuttered libraries, closed public swimming pools, litter-strewn and crime-ridden public parks, and the continuing decline of our health and education systems.

This “starve the beast” approach to government, articulated by GOP strategist Grover Norquist and his many followers, involves shrinking funds for government services via tax cuts to the rich . Another key element: filling the top positions with “Heck-of-a-job, Brownie”-style cronies so that these services are totally lamentable.

This, they hope, will feed a public outcry for privatization of virtually all public services: schools, jails, Social Security, and everything else in sight. But the American public’s experience with private contractors like Enron (a leading force for utility de-regulation) and Halliburton has surely soured many citizens on this version of crony capitalism.

Still, the Republicans are making headway on the tax cuts for the super-wealthy. Much of the public imagines that they will somehow benefit from the proposed estate tax cut that would actually affect a mere fraction of the richest 1%, specifically couples with combined fortunes of $4 million or more. The polling on this issue reflects the major media’s systemic failure to help the public decipher a sustained and deceptive propaganda attack on what the Right calls the “death tax,” a term often uncritically repeated in the mainstream press.

Along with the negligent “neutrality” of the major media, the current debate over estate-tax repeal illuminates the enormous power of big-money contributors in Congress today.

The bond between those who make legal payoffs (campaign contributions, of which 80% come from less than 1% of Americans) and those who make policy payoffs (ie.., Bush and Congress) seems tighter than ever before, with the interests of estate-less ordinary Americans entirely shut out of that loop.


Roger Bybee and Carolyn Winter are Milwaukee-based writers and activists. They can be reached at [e-mail]

[femrap]

1. Telling the story of Deregulation...

Thanks for this post.

I have read lately that when Dems campaign, they discuss issues. Pugs, on the other hand, tell stories. Dems appeal to the mind and brain. Pugs appeal to emotions, the gut.

We need to tell the story of Deregulation. We need to tell the working people what the Corporations and Extreme Wealthy are doing to this nation.

I remember when Deregulation started with Reagan as well as his busting of the air traffic controllers union. We need to tell the working people how they are being ripped off....how the rich and the pugs are laughing at them...and we need to tell the people about our Media...it's now owned by 5 big corporations. As I talk to people, they are amazed to learn that all of their newspapers, TV channels, radio stations are owned by a few big corporations.

We need to tell the working people of this nation a story about Corporate Greed. And why not throw in a few graphs and pie charts like Ross Perot did...after all a picture (graph) is worth a thousand words.

[mistertrickster]

2. Winter-Bybee! Love your stuff! Did you get printed in the Progressive

Populist awhile back? I read an article of yours in a printed source somewhere recently . . .

Anyway, keep up the good work.

I just started a DU Journal today with some pieces I had lying around. Check 'em out if you want. I want to try to crack some print magazines like The Progressive, The American Prospect or The Nation one of these days. Neither one of these (articles in my Journal) will do it though, heh.

Mr. T.

[mistertrickster]

3. Found it, June 1, Prog. Populist, "NAFTA Unleashed Immigration Flood"

Yup, that was a good one. I wonder if President Al Gore would repeal NAFTA?