Republican-backed tax cuts that would primarily benefit the children of dead millionaires would cost the country almost $30 billion every year, the Congressional Budget Office said on Wednesday.
The so-called Death Tax Repeal Act, which passed out of the House Ways and Means committee last month, would “reduce revenues, thus increasing federal deficits, by about $269 billion over the 2015-2025 period,” the CBO said.
The bill–proposed by Rep. Kevin Brady (R-Texas), the chair of the Joint Economic Committee–has 135 cosponsors to date; the majority of whom are Republican. In addition to abolishing the estate tax, it would also lower the top marginal tax rate on gifts.
Senate conservatives are lining up to support a similar bill that was introduced late last month by Sen. John Thune (R-S.D.). Among the measure’s 27 cosponsors thus far are Senate Majority Leader Mitch McConnell (R-Ky.), Senate Majority Whip John Cornyn (R-Texas), and Republican presidential hopeful Sen. Ted Cruz (R-Texas). Notably absent, however, is the overt support of Orrin Hatch (R-Utah), the chairman of the Senate Finance Committee to which the matter has been referred.
It isn’t likely that the bill will become law during the 114th Congress. A symbolic “Vote-a-rama” non-binding resolution on the measure passed last month with fewer than the 60 votes required to limit Senate debate on actual legislation.
President Obama has also proposed moving estate tax policy in the other direction—a lowering of the threshold on the tax to $3.5 million in personal assets, in a move that the White House says would raise $189 billion for the US government over the next decade.
Currently, the “Death Tax” mostly applies to those in the wills of the very rich. Estates worth less than $5.43 million are exempt, and only 4,700 out of 2.6 million dead Americans paid the levy in 2013.
In the Vote-a-rama debate, Sanders described the anti-estate tax measure as an amendment that “benefits exclusively the wealthiest 0.3 percent of the families in this country.”
Republicans have benefited from ignorance in their campaign to whip up a plastic populist anger over inheritance taxes by branding them as widespread callous Big Government overreach.
“The thought of having to visit the IRS and the undertaker on the same day is an absolute outrage,” McConnell said when Thune introduced his bill.
According to one academic study, Americans are more likely to increase their support for the estate tax–by a factor of three–when they are made aware of how many people pay it and when given a brief history of the recent rise in income and wealth inequality.
