Time for a new frame on Bush tax cuts

For those of you that remember talks about the estate tax, which is called death tax by Republicans (their frame which is very effective), there was an attempt by liberals/progressives to call it the Paris Hilton tax cut.  Sadly that never really took off.

So when we talk about letting the Bush tax cuts expire on income that is higher than $250,000 (those wealthy folks still get the same tax cut as everyone else on the income below $250,000), we need a new frame.  I suggest we go with the Fox News/Republican/Tea Party bogey name to get us there, it is time to call it the George Soros tax cut.  I want to hear John Boehner and Mitch McConnell, not to mention Rush Limbaugh, Bill O’Reilly, Sean Hannity, Glenn Beck, and Sarah Palin to defend the George Soros tax cut.

Whoopi against the death tax

Whoopi Goldberg came out against the estate tax, more commonly known as the death tax, December 4th on the View, see her video clip here.

Where to start with this, how about a little education on the estate tax. Unlike what Goldberg stated, it is not taxing death, it is taxing the estate of someone who has died. The IRS is not reaching into the grave to pull tax dollars out of your cold dead hands. The estate is your assets that are being passed on to your inheritors. Based on the size of your estate, it may be taxed by the IRS, and more importantly for many states, by the state department of revenue also.

Calling it a death tax is about making a connection with the average person, because most of us won’t have a taxable estate. As Republican pollster Frank Luntz told Frontline,

Look, for years, political people and lawyers — who, by the way, are the worst communicators — used the phrase “estate tax.” And for years they couldn’t eliminate it. The public wouldn’t support it because the word “estate” sounds wealthy. Someone like me comes around and realizes that it’s not an estate tax, it’s a death tax, because you’re taxed at death. And suddenly something that isn’t viable achieves the support of 75 percent of the American people. It’s the same tax, but nobody really knows what an estate is. But they certainly know what it means to be taxed when you die. I argue that is a clarification; that’s not an obfuscation.

As the Wall Street Journal op-ed pages (ultra right wing) point out in their lead article in support of Goldberg

Back in 2001, before President Bush signed estate tax reform into law, the death duty topped off at 55% on estates worth more than $3 million. Today the top federal rate is 45% with an exemption of $2 million, and under current law the rate falls to zero in 2010. In 2011, however, the death tax is resurrected, with the top rate restored to 55% and the exemption set at $1 million.

The Center on Budget and Policy Priorities (a liberal think tank) reported in 2006 on who is affected by the estate tax.

Already, the number of taxable estates has dropped from more than 50,000 in 2000 to fewer than 13,000 in 2006, and it will fall to about 7,000 when the exemption level rises to $3.5 million ($7 million per couple) in 2009. Put another way, a little over 2 percent of all estates were subject to tax in 2000. Today, only one-half of one percent of people who die — that is, 5 in 1,000 — pay any estate tax, and that number will fall to 3 in 1,000 in 2009 (see Figure 1).

5-31-06tax2-f1.jpg

So when Joy Behar says that this will fall on the rich, I have to agree.

The other point that Goldberg makes is that you shouldn’t be taxed twice. That sounds really good, and we heard that line of argument in reducing the tax burden on dividend income. Yet average Americans, not those of us in the investor and estate class, pay double taxation all the time. I don’t hear them calling for a repeal of sales and use taxes, which are the clearest form of double taxation (taxing income and then purchases).

If it wasn’t too unwieldy to say, I think the proper term for the estate tax would be the wealth transference tax, but I am under no illusions that language would pass Frank Luntz’s test on clarity. So when the estate is taxed, it is the inheritors who are taxed, they hadn’t previously been taxed for this wealth that they are getting.

Before the end of the clip, I was pretty pissed off at Whoopi, but at least she ends it with a joke, although probably not intentionally.

For some reason she says

No taxation without representation.

Either she lives in Washington DC which truly has taxation without representation, or she has drank the anti-tax punch and it has truly addled her brain. Based on the information that she has a daily radioshow broadcast out of New York, I am guessing she isn’t a resident of the District.