This morning a very salient question was tweeted by Nate Silver’s always insightful blog, FiveThirtyEight.com, that really got me thinking:
@fivethirtyeight: Per @QuinnipiacPoll, voters support jobs bill 72-22. Why again do Dems feel the need to compromise on the estate tax?
Hmm. Maybe because if they don’t compromise every few minutes they’ll feel too much like Republicans?
The question Quinnipiac asked respondents was whether they support President Obama’s commitment of “one hundred billion dollars to fund a jobs bill that would include tax cuts for small businesses, as well as investments in infrastructure and clean energy.”
Not only were huge percentages of Democrats (93) and independents (70) in favor, but 49 percent of Republicans favored the measure. So the question remains: Why would Democrats have to compromise on a bill that the majority of Americans support?
Well, I remember when healthcare reform was still a nascent idea in the Obama Administration, it seems to me that the majority of Americans approved of it. It was only after many weeks of lies about death panels and socialism that approval dropped precipitously.
As I’ve noted before, the Democrats’ decision to concentrate on jobs this year was one likely born out of fear of the voter more than anything else. It was a PR move. Sure, it’s a good idea as we’re approaching what could become a jobless recovery, but so was healthcare reform.
Not that Democrats have learned anything from that whole healthcare experience. On the already more popular jobs bill, it appears that they’re planning on offering concessions to Republicans right away, this time in the form of making a part of the Bush tax cuts permanent. According to sources cited by The Hill, the compromise includes “moving an estate tax bill through the Senate that would prevent a huge hike in the tax from taking effect in 2011.”
So, what is the deal with the estate tax? Basically, what’s slated to happen in 2011 is that the tax will increase to 55 percent on estates worth more than $1 million. Up until the tax was completely repealed at the end of 2009, the tax was a reduced 45 percent on estates worth more than $3.5 million. Rather than going back to that lower rate, or even the rate before the Bush tax cuts, it looks like Democrats are set to cave to yet another Republican demand and abolish it entirely.
In 2009, before the healthcare bill was declared DOA, the Obama Administration was talking about using estate tax revenue to pay for some of the insurance reform measures. At the time they said plans to re-institute the estate tax would impact “less than three-tenths of one percent of all estates.”
The thing is, experts back then just assumed that the estate tax relief established by the Bush tax cuts would be repealed by the Democratic Congress:
Professor Michael Graetz calls it congressional malpractice and questions the assertion by Senate Finance Committee Chairman Max Baucus that the Senate will act quickly in the new year with a retroactive extension.
“If Congress couldn’t do it this year, why will they be able to do it next year?” says Prof. Michael Graetz of Columbia University, who worked both at Treasury and for Congress. He calls the lapse “congressional malpractice.”
Indeed, “If not 2009, why 2010?” is a question on a lot of peoples’ minds. Turns out, they’re probably right to laugh off Baucus’ 2009 promise of fiscal responsibility.
We all know that if you give the GOP an inch in such a climate, they’ll take a mile. Of course Republicans are going to insist the estate tax remain repealed as it is now, if not be permanently repealed.
If GOP rhetoric on what they term the “death tax” were taken literally, there might be more room for agreement on the estate tax. After all, Republicans frame this issue as the government taking away family-owned farms and small businesses. Legislation already exists that would help to exempt such holdings from the estate tax, though is hasn’t moved very far.
If Senate Majority Leader Harry Reid wanted to compromise in the true sense of the word, he could suggest such a half measure of exempting family farms and small businesses. The GOP probably wouldn’t like it, as is their typical reaction to any situation where they don’t get every single thing they want with sugar on top.
But as Nate Silver (or one of his bloggers, but I assume that since he later posted an analysis of Congress’ showing in Quinnipiac polling, it was him) points out, a whopping 72 percent of Americans approve of the jobs bill. Let me say that again: 72 percent approve of the jobs bill as it stands today.
So let’s just hope the Democrats don’t screw this one up with unnecessary compromises too.
Of course, no one is doubting that they could do just that. After all, a national survey on healthcare reform back in June 2009 found that 72 percent of respondents “supported a government-administered insurance plan… that would compete for customers with private insurers.”
I guess 72 percent isn’t any more of a majority than 59 out of 100 Senate seats.
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