WILLIAMS: Death tax confounding emerging ‘survivor’ class

OPINION/ANALYSIS:

While the Washington press corps was fixated recently on the latest developments surrounding President Obama’s trillion-dollar co-pay in the guise of health care reform, followed by backyard beer swilling, Internal Revenue Service bean counters quietly went about their business.

Their mission?

Find a way to pay for the massive zeroes this administration continues to add at the end of the government’s mounting debt. In what some privately likened to an ancient archaeological find teeming with treasure, revenue agents discovered a potential $80 million golden pot of money, at the home of Michael Jackson.

That’s what the feds stand to collect if they enforce a massively onerous and confiscatory tax on the King of Pop’s estate, affectionately referred to as the death tax. And you can bet they’re coming to a neighborhood near you.

Until President Bush’s tax reforms of 2001 lowered the levy to 45 percent, the death tax in America ranked second only to Japan as the highest in the world, stifling enterprise in subtle yet noticeable ways.

The Obama administration, however, has no plans to keep the Bush reductions in effect. It has too many bills to pay to surrender the approximately $60 billion in revenue the tax generates over 10 years.

But what the left fails to recognize is that by keeping the tax in place (or worse, allowing it to return to pre-Bush levels), it is planting the federal boot on the necks of an emerging class of survivors from this economic crisis.

Both sides frame the debate as an issue of fundamental fairness - spreading the wealth versus keeping what is rightfully yours. But when Americans are posed the question directly, the death tax is decreasingly one of social justice with left and right parameters, but instead a fatally shortsighted policy with a base of support shifting beyond traditional party lines.

According to a recent survey conducted by Strategy 360, the polling arm of Dutko Worldwide, 55 percent of America’s “middleman” - the independent voter - favored a continued phaseout of the estate tax.

When told that the phaseout could create 1.5 million small-business jobs (one-third of those promised by Mr. Obama), according to a report by former Congressional Budget Office Director Doug Holtz-Eakin, the margin of support among independents expands to 64 percent.

Predictably, Democrats were less likely to support a phaseout, but even a 49 percent plurality favored the policy over establishing a permanent tax rate.

What’s apparently changed about this issue is not the party affiliation, but rather the age and income classes of those opposing the White House’s plan. This is not a rich landholder versus poor worker clash. The Dutko 360 poll uncovered that Americans favor the phaseout regardless of income, with support ranging from 54 percent among those with household incomes under $35,000 to 70 percent among those with household incomes of at least $100,000.

Think younger voters don’t care about death and taxes? Think again. The Dutko 360 poll surveyed adults ages 18 to 34 and found 61 percent of this demographic wanted the death tax buried. Folks, this ain’t your granddaddy’s tax anymore.

Fearing that nearly half of earned assets will be lost at death, the emerging class with visions to accumulate capital with age seeks to claim its stake in what some have characterized as an otherwise end-of-life debate.

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