The Senate voted yesterday to pass, 51-48, the Lincoln-Kyl amendment to lower the estate tax. It's essentially a $250 billion giveaway to people whose estates are worth more than $7 million. The various Midwestern Democrats who supported it will undoubtedly claim this about all those small family farmers who amass large fortunes, but only .02 percent of the bill's costs will actually go to those fortunate agrifamilies. Most just goes to the massively wealthy. You know, like investment bankers. Every single Senate Republican voted for the amendment, along with nine Democrats, most in the "moderate" caucus of no policy positions: Bayh, Baucus, Cantwell, Landrieu, Lincoln, Murray, the Nelsons, and Tester.
But there is some light at the end of the tunnel. For one, the provision isn't likely to make it into the final congressional budget resolution, since both House negotiators and Senate Budget Committee Chair Kent Conrad will oppose it. In case it does, Sen. Dick Durbin offered an amendment, which also passed, 56-43, requiring that if any estate tax reduction is included in the bill, an "equal amount of aggregate tax relief is also provided to Americans earning less than $100,000 per year." And though it's good that working people would receive proportional tax breaks under this plan, there really is no good reason to reduce the estate tax. As Ezra observed yesterday, all the folks freaking out about how the Obama administration's very reasonable plan to lower the tax deductions to Reagan-era levels would hurt charities haven't said a peep about how removing the estate tax would hurt charities much more.
It's nice to see our conservative and moderate senators taking time to focus on the people who have been really hit hard by the economic crisis -- the heirs of estates ranging between $7 million and $10 million.
-- Tim Fernholz