- The Washington Times - Tuesday, April 24, 2001

The liberals are at it again. They want to block the execution of a real-life villain,and have mounted an around-the-clock vigil to prevent justice from being done.
Sound like a demonstration against the death penalty? Well, this one is different. It is an effort to prevent the execution of the death tax, and they are orchestrating this one big time. Senate Democrats, for example, argue that the surplus is not big enough to end the death tax. The zillionaires, led by George Soros and Bill Gates father, claim that killing the death tax is unfair and bad social policy. And New Yorks Rep. Charles Rangel, ranking Democrat on the House Ways and Means Committee, and his allies on the Joint Tax Committee, have concocted some wild numbers claiming that revenue losses from death tax repeal would exceed $660 billion over 10 years.
And now they have another excuse: The Senate has voted to limit the total tax cut to approximately $1.2 trillion, which would be "consumed" by the marginal rate reductions and marriage penalty reforms already passed by the House. So the liberals argue there is no "room" for death tax repeal, because it would cost (Washington) too much.
But the liberals should think again. Theres more to this story than theyre telling us.
The recent House vote to end the death tax was bipartisan and overwhelming: 274-158, with 58 Democrats voting for repeal.
Congress killed the death tax last year only to have President Clinton veto the legislation. House Minority Leader Richard Gephardt had to cajole and threaten 13 Democrats, who had voted to kill the death tax, to change their votes in order to uphold Mr. Clintons veto.
Opinion polls consistently show that 70 percent to 80 percent of all Americans support killing the death tax.
Powerful coalitions of taxpayers, seniors, small businesses and other organizations have the death tax in their gunsights and are keeping the pressure on the Hill. This coalition includes leading black businessmen, who want the same chance to protect their estates from the taxman that our nation afforded white fortune-makers of the last century. The evidence is overwhelming that the death tax is not an efficient revenue-gathering tax and that compliance costs nearly equal the $29 billion or so in revenue that Washington collects (a minuscule 1.5 percent of total federal revenues).
The death tax actually finds its roots in social planning and engineering, not tax policy. Karl Max urged that inheritance be banned entirely, since it runs counter to socialist egalitarian dogma. Since they would never repeat such nonsense, U.S. policy-makers have looked for other reasons to rob the grave.
All the excuses are just that, however. Serious economic analyses have shown that the death tax has had a significant adverse impact on economic growth and the wealth of the nation:
A 1998 study by the Joint Economic Committee of Congress determined that the tax has reduced the capital stock of the American economy by $500 billion, or more than 3 percent since its inception in 1916. Furthermore, the estate tax raises little if any net revenue when you factor in the income tax losses it causes by slowing economic growth.
Similarly, a 1999 study by economists Gary and Aldonna Robbins for the Institute for Policy Innovation concluded that "there is neither social nor economic justification for the estate tax … typically, the owners of small businesses and family farms who amass wealth through a lifetime of hard work and thrift pay significantly higher marginal tax rates than the very rich … ." Furthermore, within 10 years the dynamic revenue gain from eliminating the estate tax would offset the static loss completely.
Clearly the death tax has to go. And we ought to kill it immediately Black Flag dead not just phase it out over a period of years. The "slow death" approach offers too many opportunities for liberals to interdict the phaseout if they regain control of Congress.
The best approach to death tax repeal has been offered by Sen. Jon Kyl, Arizona Republican, whose bill (S.275) would eliminate the death tax immediately and allow for stepped-up (tax) basis on $2.6 million of the estates assets. The decedents tax basis would pass through to the heirs on the balance of the estate, with capital gains consequences upon sale.
The beauty of the Kyl approach is that you can adjust the "stepped-up basis" portion of the estate assets and, by doing so, reduce the so-called "cost" (static revenue loss) to the treasury. This flexibility could qualify the Kyl bill, which has a number of Democrat sponsors, to be part of even a diminished Bush tax cut package. Despite the glum outlook of some about the prospects for killing the death tax, taxpayers should take heart. Theres a lot of life yet in the movement to kill the death tax.

James L. Martin, president of the 60 Plus Association, and Lewis K. Uhler, president of the National Tax Limitation Committee, have been very active in the campaign to kill the death tax.

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