At the moment, due to a lack of Congressional action all year, no taxes in 2010 have been levied on any estates, even those of billionaires, such as the late George Steinbrenner, owner of the New York Yankees. But come January 1st, if Congress doesnâ€™t act, the estate tax will revert back to anybody who dies worth over merely $1 million being taxed at a marginal rate of 55 percent. (Memo to the affluent old people of America: do not accept any aperitifs proffered by your would-be heirs on New Yearâ€™s Eve!)
Obviously, the current situation is ridiculous. Thereâ€™s some sensible compromise out there that ought to be worked out between the onrushing 2011 government policy of pillaging the estates of millionaires and the current 2010 policy of letting the scions of billionaires get away without paying a penny to narrow the budget deficit. For example, how about no tax on the first ten million dollars and then an increasing rate up through a billion bucks? (Hey, thatâ€™s never going to be any skin off my nose.)
Yet, as billionaires and their minions are quick to remind Republicans, itâ€™s hard to enunciate a principled reason for taxing the estates of billionaires but not millionaires.
The real reason is that billionaires have more money than votes. But, in theory, how is that explanation different from what Maxine Waters would like to do old white Republicans who have a million or two saved up after a lifetime of hard work? After all, what exactly is the difference, in principle, between having a million dollars and having a billion dollars?
Well, I donâ€™t know what the difference is in theory. But in reality itâ€™s $999,000,000.00, which is a lot of money.
With the Democrats controlling both houses of Congress and the White House, the estate tax imbroglio hasnâ€™t politically hurt the GOP much so far.
But with Republicans taking control of the House, a continuation of this kind of thing will just make Republicans look less like a ruling party in waiting than like na??ve ideologues manipulated by plutocrats.
In summary, as I wrote last Sunday,Â neither party looks ready for 2012.