- The Washington Times - Wednesday, February 20, 2008


Sen. John McCain faces an interesting quandary. On the one hand, he has achieved a unique and useful connection with independent voters. On the other hand, he has done that largely at the expense of the conservatives who make up the Republican base. Mr. McCain needs both voting blocs if he is to win the general election this November.

Mr. McCain takes great pride in his reputation as the “maverick” with no qualms with bucking the party establishment or conservative orthodoxy. This reputation has put him on the unpopular side of conservatives on certain important issues. However, there is nothing inherently wrong with being a “maverick.” In fact, it may be this reputation, which, with some purposeful refocusing, can give him broad appeal to moderate Democrats, independents and the conservative base.

One of the best ways for Mr. McCain to burnish his “maverick” image and win over conservatives is to come out in support of full repeal of the death tax. Admittedly, this would be a reversal (or at least a clarification) of his previous ambivalence concerning repeal. However, given his recent vocal support for “permanently extending the Bush tax cuts,” repeal of the death tax would be a natural progression.

A temporary repeal of the death tax is scheduled to occur in 2010. This repeal will last from Jan. 1, 2010, until Dec. 31, 2010, after which the death tax rate will go from 0 percent to a permanent rate of 55 percent. Many family-owned businesses and farms often lack the cash to pay the death tax. When the owner of a family-business or farm dies, the heirs may be forced to sell off substantial assets — if not the entire operation — to pay the tax.

Death tax repeal is not a “partisan” issue. It is supported by 70 percent of Americans. Joseph Stiglitz, Nobel Laureate and former chairman of President Bill Clinton’s Council of Economic Advisers, is just one of several left-of-center economists to admit the death tax is a failure and should be repealed. Even liberal celebrity Whoopi Goldberg has come out in favor of death tax repeal. There is no hiding the fact that death tax repeal has broad popular and academic support.

On the other hand, old-line Marxists and a few super-rich lead opposition to repeal. At a recent Senate Finance Committee hearing on the death tax, billionaire Warren Buffett opined that Congress should expand the death tax in order to “take more out of the hides of guys like me.”

What Mr. Buffett quietly fails to mention is that the life-insurance business — which he is heavily invested in — gets billions in annual premiums in special life insurance policies aimed at covering the death tax levies.

While the radical egalitarians jostle for continuing the death tax, the real victims — hard-working family-business owners and farmers — wait in the balance. There are farmers, timber producers, and manufacturers throughout America whose very livelihoods are threatened by this tax. They face the proposition of spending vast sums on life-insurance and tax planning strategies or seeing half of their life’s work go to the tax man. Neither is a particularly exciting prospect.

It is important to note that more than half of America’s jobs come from family-owned businesses and farms. Economists Gary and Aldona Robbins of the Institute for Policy Innovation found that the death tax resulted in the loss of 236,000 net jobs last year alone.

This is Mr. McCain’s opportunity to become a hero for the average guy and a renewed standard-bearer for conservatives. Supporting death tax repeal will win him credibility with independents and console worried conservatives. Most important, he will be able to do something that helps two important segments of the American economy — the family-businesses and farms.

Mr. McCain recently caused a bit of a stir when he missed the Senate’s vote on a controversial “stimulus” package. It is likely the senator deliberately skipped the vote, understanding the economic foolishness of giving away tax dollars and unemployment benefits, and the political consequences of voting against the interests of the senior and veterans lobbies.

Mr. McCain, endorsing death tax repeal is your opportunity to support real economic growth. It’s time to be a real maverick and stand up for death tax repeal. Will you?

Dick Patten is the president of the American Family Business Institute, the only organization solely devoted to full repeal of the death tax.

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