Most congressional Republicans want a permanent repeal of the estate tax — but very few voters do.
A group of 147 congressional Republicans introduced legislation this week to permanently repeal a tax that only affects the incredibly wealthy. Every single one of them opposed the American Rescue Plan, which provided a massive 2021 tax cut for every lower- and middle-income family.
On Wednesday, Rep. Jason Smith (R-MO) introduced a bill to permanently repeal the estate tax. His bill already has 120 Republican co-sponsors, out of the 211-member Republican minority caucus.
The same day, Sen. John Thune (R-SD) filed the Senate version, co-sponsored by 25 of his GOP colleagues (out of the 50-member Republican minority).
Under current federal law, when very wealthy people die, the property they leave to heirs is taxed — but only if the estate is worth more than $11,700,000.
In 2019, the estate tax applied to just 2,570 estates — 0.09% of all cases — according to the Tax Policy Center. With millions in exemptions, the average effective tax rate is about 17.1% for those few estates that must pay it.
But while the tax applies to only the richest few, it is a valuable source of revenue for the federal government. According to Congressional Budget Office estimates, estate and gift taxes are projected to provide $350 billion in revenue over the next decade.
One of the co-sponsors, Sen. Rick Scott (R-FL), warned Tuesday that America is facing "a day of reckoning" with its national debt, complaining that Democrats "don’t want to talk about how they’re going to pay for [COVID-19 relief]. The same day, he signed onto this legislation, which would reduce revenue by billions, with no offsets.
Though the bill would do nothing for the other 99.91% percent of dead people, supporters are spinning it as a vital step for the nation's tax code.
Sen. Mike Crapo (R-ID) bragged that he was working to repeal what "may be the most unfair tax on the books."
Iowa Republican Sen. Chuck Grassley called it an "outdated barrier that hurts family farms & businesses."
Rep. Madison Cawthorn (R-NC) claimed the bill will support "small business to grow ops, invest in human capital & tech instead of worry about an estate tax."
Rep. Bob Latta (R-OH) said, "Americans deserve relief from this burdensome & unnecessary tax."
Those lawmakers and every one of the Republican sponsors and cosponsors voted against (or publicly opposed) the pandemic relief bill, which passed this week in the House and Senate without a single Republican vote.
That legislation provided $1,400 relief checks for most Americans and will give them an average tax cut of $3,040, through expanded child tax credits, earned income tax credits, and child and dependent care tax credits.
Rep. Sanford Bishop (D-GA), the lone Democratic co-sponsor of the estate tax repeal, voted for the $1.9 trillion COVID-19 relief plan.
Republicans have been trying to eliminate the estate tax for years, using the poll-tested term "death tax" to try to manipulate public opinion.
But unlike the wildly popular COVID-19 relief bill — which enjoys support from 75% of Americans and even 59% of GOP voters, according to a Morning Consult-Politico poll this week — most voters are not enthusiastic about cutting taxes for the richest deceased Americans.
A February 2019 Morning Consult poll found just 33% of Americans backed a full repeal of the estate tax, while 50% supported expanding it to apply to estates of over $3.5 million. Among Republicans, just 43% backed repeal and 43% even backed expansion.
This is fairly consistent with an April 2006 poll that showed 57% supported for keeping or reforming the estate tax and 23% support for full repeal. (At the time, the estate tax applied to those with estates of more than $2 million per person or $4 million per couple — about 0.27% of all U.S. estates.)
While Republicans continue to focus their efforts on cutting taxes for their wealthiest constituents, polls show most voters want the opposite. A 2019 Gallup report noted that for more than 25 years, the polling outfit's surveys have shown "that a majority of U.S. adults believe upper-income Americans pay too little in taxes."
With a Democratic majority in the House and Senate, the estate tax repeal is unlikely to go anywhere. Indeed last week three congressional Democrats unveiled the Ultra-Millionaire Tax Act of 2021, a proposal to raise $3 trillion in new revenue by taxing the wealth of those with more than $50 million.
Rep. Bill Pascrell (D-NJ) mocked the estate tax proposal on Thursday, tweeting, "Yesterday: Democrats pass largest relief plan ever to millions of working class Americans, republicans offer a special tax cut to the richest handful of people on earth. Democrats care about Americans, republicans don't give a damn about you."
Published with permission of The American Independent Foundation.