The Blue State

Those making above $20 million to get 43% of estate tax cut

While Senate Democrats and Republicans were busy debating Iraq yesterday, the House passed a bill that would repeal the estate tax on the richest Americans.  Keep in mind that only 1% of all estates are affected by the tax.  But, although the war in Iraq and gas prices top the minds of most Americans, Republicans feel that celebrities like Paris Hilton deserve to have their taxes lowered.

As the Center on Budget and Policy Priorities shows in the following chart, the estates of those making more than $20 million will get 45% of the tax cut:

                                                                                                                                                                                                    

Table 1:             Change Due to Thomas Estate Tax Proposal in 2011* Relative to Making 2009        Law Permanent
Estate Value	Average Tax Cut	Share of Total Tax Cut
Less than $3.5 million	$0	0%
$3.5 million - $5 million	$291,000	5%
$5 million - $10 million	$729,000	23%
$10 million - $20 million	$1.9 million	29%
Above $20 million	$5.6 million	43%
Total	$1.4 million	100%
Source:Urban-Brookings Tax Policy Center.       * Table assumes that capital gains rate remains 15 percent. If it reverted to 20 percent, the distributional picture would change only slightly; see  text.

More than one-third of the already enacted Bush tax cuts go to the wealthiest 1%.  This estate tax cut would cut the rich an even larger break.

Bare with me.  Here come more alarming numbers.  As it stands, the National Debt, otherwise known as the birth tax, is at $8.3 trillion.  In comparison, the Bush tax cuts will cost $3 trillion over the next decade, plus interest.  Add that to the current estate tax cut proposal that would cost $1 trillion, also coming over the next ten years.  All in all, you get a grand total of $4 trillion that will be added to the National Debt over the next decade, not including interest.

Interesting how the GOP will vote to raise their own salaries and cut taxes on the richest Americans, yet vote against raising the minimum wage for the middle class.  Now you know their priorities.
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Related news on the following blogs: Speedkill, Talking Taxes, Deep Thought, Scatablog, Gone Mild, Republic of Dogs, Half Sigma.

For Jenna's ex, it literally paid to know the Bush family

Usually when you hire someone it is supposed to be based on merit, not personal connections -- or what accountability advocates refer to as patronage.  In our own open government, especially, we would like to think that the best and brightest are hired to serve the public and make the most of our tax dollars.

In came President Bush, who unsuccessfully tried to nominate his personal friend Harriet Miers to the U.S. Supreme Court.  That attempt to exercise decision-making based on personal friendships was among many in his Administration.

Then came Blake Gottesman, the ex-boyfriend of Jenna Bush while the two were in high school, who was hired as President Bush's personal assistant.  Gottesman resigned from his job on Wednesday because he planned to attend Harvard Business School, probably after receiving the best recommendation letter ever imaginable!  He was paid $100,000 per year by taxpayers to carry speeches, dog sit and program Bush's iPod:

BlakeGottesman has been Mr. Bush's personal assistant, responsible forcarrying his speeches and breath mints. He even "dog sits" the Bushfamily scottish terriers.

The 26-year-old is a native Texan and the president's youngest aide.

Sincethe age of 21, Gottesman's job is to be master of detail and thegatekeeper between the president and his staff. He makes almost$100,000 a year for things like holding dog Barnie and programming Mr.Bush's iPod, which he uses working out.

Nice to know that the money continuously being added to the birth tax is being spent wisely.

Video: Taxpayer money funding reckless contractors in Iraq

A CNN report on Monday night's edition of Anderson Cooper 360 revealed the truth about the private military contracting firm called Aegis.  An amateur video leaked onto the internet months ago showed private contractors randomly shooting at Iraqi civilian vehicles.  But CNN reporter Mic Robertson explained last night that these were Aegis employees.  Most alarmingly, the Pentagon recently awarded Aegis a more expensive contract than any other private military firm.  Here is part of Robertson's report:

Click to watch video clip

To be precise, the Pentagon is paying Aegis $239 million to guard Iraqi politicians.  Some might say that private military firms are independent of the U.S. military, and therefore do not need to abide by the rules of engagement.  But others would conclude that because firms like Aegis are being funded by U.S. taxpayers, they are directly responsible for their conduct.

GOP 0 for 2 this week

While the mainstream media was salivating over the great news that Abu Musab al Zarqawi was killed in a spectacular use of force by the U.S. military, the Senate was busy debating whether or not to repeal the estate tax -- a tax that affects only five out of every 1,000 people nationwide (that's only 0.5% of the country, for those of you scoring at home!).  The repeal would have added more than $1 trillion to the National Debt, or in other words add to the birth tax of future generations.

The measure required 60 votes to end the filibuster.  The Republicans could only muster as much as 57 votes.  So the measure was rejected today.

A repeal of the estate tax and a constitutional amendment banning gay marriage are the two top priorities for the Republican-controlled Senate before the summer recess.  This week, both measures failed: putting their current batting average at .000 (0 for 2).  Good luck trying to find a contract with voters this November!

Bill Frist presses hard to increase birth tax

After helping President Bush push to the Senate an amendment that would ban gay marriage, Republican Majority Bill Frist plans to move onto what his party believes is the second most important issue facing the nation: upper class tax relief.  The estate tax, which only affects 2% of estates, adds more than $2 trillion in revenue to the U.S. Treasury.  The Republicans call this "the death tax," and want to repeal it immediately.  Such a repeal would add to the national debt, therefore increasing what young people call "the birth tax."  But Frist sees it differently:

Opponents of the estate tax, which is levied by the federal governmenton wealth of more than $2 million, say Thursday's Senate vote is allabout repealing an onerous levy they have dubbed the "death tax."

"It is said that the only certain things in life are death and taxes,but when Ben Franklin coined that phrase, he surely didn't envisionbeing taxed after death," Senate Majority Leader Bill Frist, R-Tenn.,said in a statement. "Yet this is exactly what the death tax does."

If Congress makes full repeal of the estate tax permanent, about $1trillion would be added to the nation's current national debt of $8.36trillion over 10 years.

I know that it is easy for the GOP to tax those that have not been born yet, especially since they will not anymore votes for his party this November.  But thinking about the future is a rational thing to do every now and then.

(Related News)

Repealing the estate tax is a tax on birth

Before the Senate goes to recess for the summer, they plan to vote on a bill that would repeal the estate tax.  Keep in mind that the estate tax only affects the wealthiest 2% of the country.  Repealing such a measure, as the bill proposes, would add almost $1 trillion to the National Debt between 2012 and 2021, according to a study published by the CBPP.  $213 billion of that money is interest alone.

It was famous Republican pollster Frank Luntz who rhetorically re-branded the estate tax as the "death tax."  This slogan has been a valuable tool in helping the Republicans drum up public support for its repeal. 

But as Diane Lim Rogers wrote this week in the San Francisco Chronicle, the tax that America should be worrying about is the birth tax -- another way of referring to the National Debt.  Each day, children are born with America's growing debt weight on their shoulder.  So by repealing the estate tax, or the death tax as Republicans like to call it, the amount will we borrow from the U.S. Treasury will only add to the birth tax of future generations.

Paulson: Putting a tasteful spin on corruption

With the nomination of Henry Paulson to the Treasury Secretary Post, Americans should at least be allowed to know the truth behind the curtain.  Paulson is a Wallstreet guy who, in 2002 immediately following the Enron scandal, led the spin strategy to alter public disapproval of large corporations.  His strategy was called "Restoring Investor Confidence: An Agenda for Change."  In a nutshell, it was like convincing the public that the sky was black.  With all those corporate scandals in 2002, such an optimistic take on Wall Street just did not fly.

Paulson is beloved by the CATO institute for his supply-side, Reaganomical approach that advocates across the board tax cuts and subsidies for oil companies and other large corporations.  After all, why should he not favor that approach?  Skimble blog noted in 2003 that Bush's tax cuts for the wealthy helped add $2 million to Paulson's personal finances.

On an positive note, Paulson will easily become the most green member of the Administration.  Until his nomination by President Bush, he was the co-chairman of the Asia/Pacific Council of the Nature Conservacy.

However, all in all, the environment will not be Paulson's focus when serving this Administration.  His pro-tax cut stances fit in quite well with an already pro-corporate welfare White House that, in this year's budget, allocates $6.1 billion worth of subsidies to oil companies.  Paulson's job in this Administration, just as it has been ever since the Enron scandal, is to put a positive spin on corporate corruption.  Judging from the fact that Bush chose Paulson specifically, the President probably believes he is up to the task.

New tax cuts will hurt teenagers that value hard work

My generation, more than any other American generation prior, has a serious problem on our hands when it comes to the amount of National Debt that has piled up.  Each day that legislators vote on bills, teenagers and 20-something college students around my age listen to their ipods without the faintest idea of how much more money is being leveled onto our shoulders.

Even with all that said about the National Debt, President Bush wants to shoulder yet another burden onto our generation -- this time when it comes to savings.  Sunday's New York Times explains how teenagers between 14 and 17 years of age that try to save money are going to get scammed under this recent round of tax cuts:

The $69 billion tax cut bill that President Bush signed this weektripled tax rates for teenagers with college savings funds, despite Mr.Bush's 1999 pledge to veto any tax increase.

   

Under thenew law, teenagers age 14 to 17 with investment income will now betaxed at the same rate as their parents, not at their own rates.Long-term capital gains and dividends that had been taxed at 5 percentwill now be taxed at 15 percent. Interest that had been taxed at 10percent will now be taxed at as much as 35 percent.

Theincreases, which are retroactive to the first day of the year, areexpected to generate nearly $2.2 billion over 10 years, according tothe Congressional Joint Committee on Taxation, which issues theofficial estimates.

Over all, the tax bill that Mr. Bush signed Wednesday reduces taxes by $69 billion.

Mr. Bush pledged in 1999 to veto any bill that raised taxes. Inresponse to a question about the tax increase on teenagers in the newlegislation, the White House issued a statement Friday that made noreference to the tax increase, but recounted the tax cuts theadministration has sponsored and stated that President Bush had"reduced taxes on all people who pay income taxes."

Challengedon that point, the White House modified its statement 21 minutes laterto say that Mr. Bush had "reduced taxes on virtually all people who payincome taxes."

It is devious to steal from teenagers who give up their entire summer to work a full-time job.  What kind of message does it send when the government penalizes hard work from young Americans?

Tax cut bill: down with education, hooray for big oil

When you look at the details on paper, the tax bill that was passed last week should be enough to convince Americans to kick the GOP out of power in both the Senate and the House.  Aside from the fact that middle class Americans will only receive a $20 tax cut compared to a $42,000 tax cut for millionaires, there is another part of the bill that is even more disturbing.

During a time when gas prices are above even $3.30 in some places, the GOP inserted a provision into the bill that would give billions of dollars worth of subsidies to oil companies:

Sen. Charles Schumer, D-N.Y., the chairman of the Democratic SenatorialCampaign Committee, noted that Republicans decided to drop a provisionallowing Americans to deduct up to $4,000 in college-tuition costsworth $4.5 billion.

Instead, Schumer pointed out, Republicansincluded a tax break for oil companies worth $4.3 billion despite theindustry's record profits.

"The choice is stark and clear --Big Oil or middle-class families," Schumer said. "The RepublicanCongress chose Big Oil, and that's why voters want change."

The Democrats need to get their act together and start strategizing more preventively and pragmatically.  Why was this not talked about until after the bill was passed?  Why did the DNC not raise more of a fuss?

If the strategists over at the DNC had a clue, which they unfortunately don't, then they would be courting conservative voters by saying things like ever since the Republicans took Congress twelve years ago, the debt limit has gone from $4.9 trillion to $10 trillion.  If that is fiscal conservatism, then that I am proud to be a liberal.

But as usual, the Democrats will sit back and watch from the attic as the turmoil below that has been inflicted by this Republican Congress goes unchecked and affects millions of Americans.  WAKE UP DEMOCRATS!  This is not just about taking back Congress.  It is about standing up, pushing for reform and thinking in the long-run about how to make America stronger than ever.

Last stand against tax cuts

The Bush tax cuts, which according to the Tax Policy Center at The Brookings Institute will give an average of only $20 to middle class families and $42,000 to those making more than $1 million, is going to easily make its way through the Senate unless you e-mail both of your Senators and put pressure on them to vote "nay".

Why can't the Democrats simply filibuster the measure, you ask?  There are new budget rules, called Fast Track Rules, that suspend Senate debate immediately at the will of the majority party and put it to an automatic vote.

With the Democrats weakened and unable to block the measure, the only thing left is to e-mail your Senators -- especially those who are up for reelection this November.  This tax cut will cost $3.3 trillion between now and 2016, reads a recent CBPP study.  Plus, the $20 that middle class families will save from the tax cut is even more meaningless than the insulting gas rebate that the GOP proposed last week.  Please tell your Senators to exercise some fiscal restraint and vote "nay" on the Bush tax cuts.