Has the Estate Tax Become an Issue on the Campaign Trail?

According to a recent Wall Street Journal article (subscription), it has. Despite not hearing much about the estate tax in debates or town hall meetings this fall, it seems the American Family Business Institute, deemed an "advocacy group" in the Journal piece, is circulating a pledge among congressional candidates calling for elimination of the tax. This seems to be enough for the Rupert Murdoch-owned daily banking pamphlet to announce that the estate tax is a midterm election issue.

Kneel before the Aqua Buddha!

We haven't heard much about the estate tax since last winter, when the Senate adjourned for Christmas break without addressing the tax's then-approaching statutorily mandated repeal. It seemed that the Senate might address the issue early in the year, after their return from the holidays, but those negotiations fell apart as well.

Heading into this fall's midterm elections, it didn't seem like the issue would be that big of a deal. Ironically, the article admits as much, and says that the estate tax is only an issue in certain parts of the country:

The estate tax has become a particularly hot issue in the West, including in Washington state's [sic] Senate contest, and some rural House districts where Democratic incumbents appear vulnerable. The tax tends to be a hotter issue in rural areas because it raises particular concerns among farmers and landowners.

Rather, it's the popularity of the AFBI pledge among conservative congressional candidates that’s the real story here, and which should give pause to progressive advocates of the estate tax. According to the Journal, the petition has 260 signers, including "53 incumbents and more than half of Republicans running for House and Senate." In fact, of the total candidates who have signed the pledge, "253 are Republicans, and two are Democrats."

This really isn't a shock – most conservatives have always wanted to kill the estate tax – but if Republicans gain one or both houses of Congress in the upcoming midterm elections, there could be a push by conservative lawmakers to act on that pledge. The situation will be even direr if Congress can't figure out a compromise to the estate tax during the lame duck session, which is when most Hill watchers expect both chambers to roll the estate tax into a larger package of tax issues, including the Bush tax cuts.

Although progressives will have the veto pen of President Obama, I would rather not watch the tug-of-war that would ensue between Democrats and a Republican party with newly minted Tea Party types pushing for ideological purity during a tax showdown. Congress needs to permanently extend the estate tax at a reasonable exemption level and rate this winter.

Image by Flickr user Gage Skidmore used under a Creative Commons license.

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