My colleague The Moose did a post this morning playing off fresh charges by the former deputy director of the White House Office of Faith-Based and Community Initiatives that the administration took the whole faith-based project about as seriously as, well, “compassionate conservatism” in general.But nestled in the post was another subject on which The Moose and I share a healthy obsession: the scheduled demise of the federal estate tax, a.k.a, in Republican-speak, the “death tax.”The Moose specifically proposed reinstating a reformed version of the estate tax and dedicating the money to a real faith-based initiative. But aside from that particular idea, I think Democrats, as a matter of basic principle, ought to single out the estate tax repeal as a Bush/GOP outrage that must not be allowed to stand.This happens to be one issue where the standard lefty critique of centrist Democrats has some merit. At some point during the 1990s, the GOPers did some focus groups and discovered that sizeable majorities of voters didn’t like the idea of family farmers and small business owners getting hit with high-rate federal inheritance taxes when they were struggling to keep the farm or business in the family for the next generation. They also discovered that calling the inheritance tax a “death tax” pushed even more buttons. Nothing excites Republicans more than finding an issue where they can simultaneously win votes and richly reward their richest constituencies. So not suprisingly, abolishing the “death tax” became a standard feature of GOP tax proposals in the Age of Newt, bearing poisonous fruit when Bush took office amidst spectacular budget surpluses and got the chance to cut taxes.A goodly number of Democrats–especially those from marginal and/or rural districts–saw those polls and just flat-out caved (for the record, the DLC never did so, and in fact made the “death tax repeal” an object of particular hostility and derision). In fact, other than the so-called “marriage penalty” adjustment, repeal of federal inheritance taxes probably got more Democratic support in Congress than any other feature of the Bush tax package. That was then. This is now. And now Democrats should seriously consider making opposition to a permanent “death tax repeal” a signature issue. Why? Well, for one thing, repealing inheritance taxes strikes at the very heart of a long–and until recently, bipartisan–American tradition of progressive taxation in which the burden of self-government falls on wealth as well as work. (As The Moose often points out, Teddy Roosevelt was the father of the federal estate tax). There are three ways to get very, very rich. One is to earn it with actual work (a rare but not impossible feat). A second is to earn it through investment income. And a third is to inherit it. (A fourth, I suppose, is to marry it, perhaps more than once, but we’re not talking about Sen. John Warner here). A broad-based tax system should not mysteriously exempt the third source of enormous wealth, especially since it is the one that rewards birth-status rather than effort or initiative or good judgment, and that serves virtually no economic purpose. Moreover, truly dangerous and immoral concentrations of wealth often take generations to accumulate, with inheritances serving as the crucial link between economically rational and irrational–indeed, anti-competitive–consolidations of market power. To put it another way, accepting the abolition of inheritance taxes makes any consistent and progressive fiscal philosophy incoherent. We’re gonna tax high earners and small investors, but not big fat trust fund babies? Oh, really? Aside from the principles involved, I am convinced Democrats can turn public opinion around on the estate tax. The extremist abolitionism of the GOP on this issue makes it easy for Democrats to be reasonable, in a way that’s far more difficult in the complicated world of marginal rates on income. For years, most Democrats have supported a reform of the federal estate tax that would raise the threshold for applying it high enough to exempt virtually every legitimate small family farm or small business, and perhaps even lower the rates, which are significantly higher than for corporate or personal incomes. That would essentially return the estate tax to a simple, progressive purpuse: a tax on the inheritence of very large personal fortunes–a “billionaire’s tax,” to demagogue it just a little, in the spirit of “death tax.” Let the GOPers defend that, for a change. Pivoting public opinion on inheritence taxes will require the kind of sustained, loud Democratic attention that is currently being paid to Social Security privatization. But it’s worth it, both morally and politically. Repealing the estate tax is a central pillar of the GOP’s plan to eventually shift the federal tax base entirely from wealth to work, with the goal of not only “starving the beast” of government, but of turning heavily taxed people of modest means into anti-tax zealots while solidifying the Republican Party’s iron pact with the most privileged and powerful economic interests in the country. So: if and when the Beast of Bush’s SocSec proposal is slain or at least firmly caged, I nominate “death to the death tax repeal” as a Big Fight worth having, and winning.
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By Ed Kilgore
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March 24: The Republican Case Against Medicaid Expansion Continues to Crumble
There’s another turn in a story we’ve all been following for over a decade, so I wrote it up at New York:
The Affordable Care Act was signed into law 13 years ago, and the Medicaid expansion that was central to the law still hasn’t been implemented in all 50 states. But we are seeing steady, if extremely slow, progress in the effort to give people who can’t afford private insurance but don’t qualify for traditional Medicaid access to crucial health services. The U.S. Supreme Court case that upheld the ACA also made Medicaid expansion optional for states. Twenty-four states accepted the expansion when it became fully available at the beginning of 2014, and that number has steadily expanded, with the most recent burst of forward momentum coming from ballot initiatives in red states like Missouri, Nebraska, Oklahoma, South Dakota, and Utah. Now a 40th state is in the process of climbing on board: North Carolina. As the Associated Press reports, legislation is finally headed toward the desk of Governor Roy Cooper:
“A Medicaid expansion deal in North Carolina received final legislative approval on Thursday, capping a decade of debate over whether the closely politically divided state should accept the federal government’s coverage for hundreds of thousands of low-income adults. …
“When Democratic Gov. Roy Cooper, a longtime expansion advocate, signs the bill, it should leave 10 states in the U.S. that haven’t adopted expansion. North Carolina has 2.9 million enrollees in traditional Medicaid coverage. Advocates have estimated that expansion could help 600,000 adults.”
So what changed? Basically, over time the fiscal arguments North Carolina Republicans used to oppose the expansion began sounding increasingly ridiculous, AP suggests:
“GOP legislators passed a law in 2013 specifically preventing a governor’s administration from seeking expansion without express approval by the General Assembly. But interest in expansion grew over the past year as lawmakers concluded that Congress was neither likely to repeal the law nor raise the low 10% state match that coverage requires.
“A financial sweetener contained in a COVID-19 recovery law means North Carolina also would get an estimated extra $1.75 billion in cash over two years if it expands Medicaid. Legislators hope to use much of that money on mental health services.”
In other words, the GOP Cassandras warning that the wily Democrats would cut funding for the expansion in Congress once states were hooked turned out to be absolutely wrong. Indeed, the very sweet deal offered in the original legislation got even sweeter thanks to the above-mentioned COVID legislation. States like North Carolina appeared to be leaving very good money on the table for no apparent reason other than partisanship, seasoned with some conservative hostility toward potential beneficiaries. In this case, GOP legislators finally reversed course without much excuse-making. The AP reports:
“A turning point came last May when Senate leader Phil Berger, a longtime expansion opponent, publicly explained his reversal, which was based largely on fiscal terms.
“In a news conference, Berger also described the situation faced by a single mother who didn’t make enough money to cover insurance for both her and her children, which he said meant that she would either end up in the emergency room or not get care. Expansion covers people who make too much money for conventional Medicaid but not enough to benefit from heavily subsidized private insurance.
“’We need coverage in North Carolina for the working poor,’ Berger said at the time.”
That, of course, has been true all along. Final legislative approval of the expansion was delayed for a while due to an unrelated dispute over health-facility regulations. And the expansion cannot proceed until a state budget is passed. But it’s finally looking good for Medicaid expansion in a place where Democrats and Republicans are bitterly at odds on a wide range of issues.
There remain ten states that have not yet expanded Medicaid; eight are Republican “trifecta” states (Alabama, Florida, Georgia, Mississippi, South Carolina, Tennessee, Texas, and Wyoming) and two others have Republican-controlled legislatures (Kansas and Wisconsin). Perhaps the peculiar mix of stupidity and malice that keeps state lawmakers from using the money made available to them by Washington to help their own people will abate elsewhere soon.