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The Wrong Kind of Concern

April 17th, 2015

Conservatives have been making noise about how income inequality is bad and that is so important to them:

Appearing at a candidate forum in late January, three likely Republican presidential contenders — Senators Ted Cruz, Marco Rubio and Rand Paul — all made a striking confession: They considered “the increasing gap between rich and poor” to be a problem.

Yeah, the problem they see is that income inequality is being noticed more and it’s in danger of being opposed. We can’t have that.

Which is not too far from their stances: they brought it up primarily to say that it can’t be addressed with government action—in short, we should not raise taxes on the rich or mandate minimum wage hikes, stuff like that.

To prove their extreme concern over income inequality being challenged, Republicans in the House just passed (on heavily partisan lines) a bill that would repeal the estate tax.

To be clear, the estate tax does not affect you unless you are handing over more than $5.43 million upon your demise, and that’s only if you’re single. For a married couple, it’s $10.86 million. And that means that if parents pass away with a $15 million estate, no tax is applied until the first dollar after $10.86 million. After that, the rates go from 18% to 40%, the 40% kicking in after $1 million. So on the $15 million estate, the inheritors would pay about $2 million in taxes.

So, how is this about Republicans protecting people of lower incomes?

Republican Majority Whip Steve Scalise explained, “the vast majority of our members in the Republican conference have never had the opportunity to stand up for small businesses who are threatened by the death tax everyday.”

Ah, yes. The small business owner. The Republicans’ favorite go-to prop when they want to help the super-wealthy.

But wait! Those small businessmen could get hit! Really! It happens!

Well, in 2014, the average and median small business sold for about $185,000.

In fact, only about 20 “small” businesses and farms each year are subject to any estate tax every year. And that’s figuring businesses which value at $5 million, not $10 million. And those 20 per year usually owe only about 5% in taxes.

Not to mention that there is no language in the bill whatsoever mentioning small businesses, just an unqualified repeal.

So, are Republicans really voting to protect small businesses? Of course not. It’s an asinine lie. Nothing new—I have written before about how Republicans habitually trot out “small businessmen” when they want to give massive tax cuts to primarily wealthy people.

In short, it’s pure, unadulterated bullshit.

The estate tax repeal would cost the federal government about $27 billion per year, mostly so that people with hundreds of millions, as well as billions of dollars can maintain vast treasuries of unearned wealth.

For example, Emma and Georgina Bloomberg stand to inherit their father’s $31 billion fortune. Assuming they get it all (and are not largely cut out like Paris Hilton), and they split the fortune evenly, each would, after the estate tax, only receive $9.3 billion. The horror!

As Thomas Piketty pointed out, it is amassed wealth that is the biggest problem in the world—and the estate tax is pretty much the only established tax on that wealth.

And so naturally, Republicans, newly concerned about income inequality, want to completely erase that tax, to the exclusive benefit of the 1%.

Sounds legit.

Of course, we can breathe a sigh of relief: the bill will never become law. Democrats stand to filibuster it in the Senate, and even if not, Obama will veto it. And Republicans know this. Despite that, they passed it purely as a stunt—which, strangely, kind of puts the lie to their recent claims of concern for income inequality. (Alas, billionaires like Sheldon Adelson can hire lawyers to set up massive trusts to get around billions in estate taxes.)

It’s almost as if they figure that independents know full well they are lying all the time, or they believe independent voters are idiots who won’t notice.