Last Wednesday, Warren Buffett testified in front of the Senate Finance Committee. He's still on his pro-taxes on the rich crusade. This time, he's advising the finance committee to retain the estate tax:
The resources of society I don't think should pass along in terms of an aristocratic dynasty of wealth ... I believe in keeping equality of opportunity as much as you can in this country. [...]
Keep the estate tax and its $24 billion. There are 23 million households in the United States with $20,000 or less of income. ... Let's give those 23 million households a $1,000 annual credit. ... The cost of this would be less than getting rid of the tax on less than 12,000 estates.
According to this ABC News piece, "of nearly 2.5 million deaths in 2004, about 19,300 estates paid the estate tax." That's less than 1%. And none of them were farmers.
So why all the fuss? If such a small collection of disproportionately rich families are affected by the tax, why would Republicans care? Besides the fact that Republicans will embrace any opportunity to defund government, it's because a small collection of disproportionately rich families are affected by the tax.
In 2006, Public Citizen and United for a Fair Economy released a report that listed 18 of the country's richest families as driving a campaign to get the estate tax repealed. For all you Michiganders out there, the list includes Dick DeVos and Steve Van Andel. The Wal-Mart Waltons, the Nordstroms, and the Mars families are also represented in the group.
Getting rid of the estate tax would result in about $1 trillion of lost revenue for the government over the next 15 years. That's another $1 trillion in debt. Or maybe $1 trillion in budget cuts, but that's highly unlikely - Republicans will get all foamy at the mouth about reducing taxes and cutting spending, but they never seem to get to the cutting the spending part.
Buffett also called the argument the Republicans have been using - calling the estate tax a "death tax" that destroys family farms - "intellectually dishonest." Succinct and to the point. I like it.