The House has just voted to deprive the American people of more than one trillion dollars over the next 10 years in fiscal revenue, and the Senate may not be far behind. Bills to repeal the estate tax, a tax on the net assets of deceased Americans, have already passed that will phase out the estate tax between now and 2010. The goals of these measures are simple: to protect the interests of the United States most wealthy elite and preserve this generations wealth for the distant future.
Only one-third of one percent of the American population, those whose wealth comprises a net worth of $1.5 millon or more, pays the estate tax in its current form. The preservation of this tax is essential to continuing responsible fiscal policy. Repealing the estate tax will force the American people to take on this enormous fiscal burden while the top percentile of wealth ensures its own financial supremacy.
Repealing the estate tax represents a shift of burden from those who are fully able to pay to those who cannot. This shift of burden represents a default on payments of the debts owed by the top percentile to every other American. The top percentile would have us believe that their wealth was created in a societal vacuum. In just one example, energy tax breaks cost the American taxpayer $14.5 billion each year, where energy represents a large part of the Bush and Cheney family fortunes. The average American taxpayer is paying, and has paid, to preserve the fortunes of the top percentile, and now the average American taxpayer is being asked to pay even more.
The estate tax is essential to preserving the welfare goals of the United States. Not only does the estate tax make the funding of our social programs possible, but it is also responsible for $20 billion a year of charitable donations; thus, repeal necessarily increases dependence of welfare on the United States government. Because charitable giving is tax-exempt, the estate tax encourages giving by top percentile donors to non-government agencies as a way to lower the overall amount of tax paid. In 2003, when the estate tax was first lowered, charitable giving dropped by 18.2 percent. Non-government agencies are more able to efficiently and effectively distribute welfare benefits than the federal government. If these charities lose their revenue from the estate taxs loopholes, then they will have to decrease services, creating a deficit of welfare resources. Those Americans who now turn to charitable organizations will have to increase their demands on our government. Clearly, this dependence will weaken American welfare, as the current government programs will no longer have the revenue streams they need to even maintain current welfare levels.
Ultimately, repeal of the estate tax has effects that every good liberal and every good conservative will hate. It is not too late to prevent this mistake. If the current legislation does not pass in the Senate, the estate tax will be fully reinstated in 2011, ready for another legislative fight. The Senate bill that would repeal the estate tax only needs 60 votes, but if the American people make it clear that they understand how detrimental a repeal would be, it will not pass. A wealthy elite is seeking to control American fiscal policy at the expense of the American people. Such an attempt is a flagrant attack on every American who believes in fairness and equality.