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America's wealthiest families are pouring millions into slashing the estate tax - and some Democrats are siding with the super-rich
MICHAEL CROWLEY
Posted May 27, 2009 1:35 PM
Rolling Stone
On a bright April day in Barack Obama's America, where equality is on the rise and greed is on the run, a Democratic senator from an impoverished Southern state took a brave stand — on behalf of the country's richest families.
On April 1st, Sen. Blanche Lincoln of Arkansas, a state with the nation's third-lowest median income, sponsored a budget amendment that would sharply reduce taxes on the estates of multimillionaires after they die.
Estates worth up to $7 million per couple, and $3.5 million for individuals, are already exempt from taxes — meaning that 99.75 percent of all Americans die without paying a dime to Uncle Sam. But Lincoln's proposal would raise the exemption to $10 million — and slash the tax rate on even larger estates from 45 percent to 35 percent. All told, the move would let the children of Wall Street barons, dot-com millionaires and wealthy industrialists pocket more than $90 billion in tax revenues over the next decade.
Harry Reid, the Senate majority leader, was furious at Lincoln's move, calling it "so stunning, so outrageous that some would choose this hour of national crisis to push for an amendment to slash the estate tax for the superwealthy." Yet the tax cut passed with 51 votes — including 10 Democrats.
A few weeks later, during negotiations to reconcile the Senate's budget with the one passed by the House, the tax cut was undone. But the battle over the "death tax," as Republicans have shrewdly labeled it, is just beginning — and it involves one of the best-funded and most effective lobbying operations that Washington has ever seen. It is a movement that conservatives often portray as the work of a grass-roots uprising but in large measure has been propelled by a very small number of extremely rich people. "You have a group of wealthy families that are funding a very sophisticated effort," says Michael Graetz, a law professor at Yale who has studied the movement to repeal the estate tax. Over the past 20 years, those families have exerted their power in ways that can be traced, in a surprisingly direct way, to many of the Democrats who voted for Blanche Lincoln's amendment — and who are hoping for bigger victories this fall. For more of this story click here.
