Colbert Reminds Us What the Estate Tax is Really About

On The Colbert Report yesterday, host Stephen Colbert mocked conservative pundits and politicians ginning up fear over the return of the estate tax in 2011. Recently, conservatives have been bemoaning the potential impacts of a returning estate tax on the decision-making processes of families with wealthy relatives near death. Colbert empathized with "all those innocent, God-fearing people who are willing to kill Nana for the extra cash."

Stephen Colbert

With Congress likely to pass an extension of the Bush tax cuts – which set in place the gradual reduction and then temporary one-year elimination of the estate tax for 2010 – during the current lame duck session, Democrats and Republicans alike want estate tax language included in the bill.

President Obama has proposed permanently extending 2009 estate tax levels – which exempted the first $3.5 million of an estate and taxed any amount above that at 45 percent – while most Republicans have signed on to the Lincoln/Kyl proposal, which would weaken the estate tax beyond 2009 levels.

If Congress fails to adopt any proposal, the estate tax will spring back to 55 percent on estates worth more than $1 million next year.

To hear those within conservative circles, though, anything other than the permanent repeal of the "death tax" is a menace to not only business but also the loved ones of elderly business owners.

On Tuesday, Rep. Steve King (R-IA) claimed there would be "people that are on their death bed, families gathered around the death bed, making life and death decisions by looking at tax liabilities." The congressman added, "That is cruel."

Colbert commended Rep. King's courageous stand against "yet another injustice to the oft overlooked minority: children of the obscenely wealthy."

And Colbert's right. According to Citizens for Tax Justice (CTJ), the estate tax affected only 0.6 percent of deaths in the U.S. in 2008, according to the most recent statistics available. In 2008, the estate tax exempted the first $2 million of an estate and taxed any amount over that at 45 percent.

Moreover, while their argument about the implications of a returning estate tax on family life-and-death decisions is pretty silly, if Rep. King and other conservatives want to get upset about it, they should be angry with their own party for writing into the 2001 Bush tax cuts the sunset of the one-year repeal. But, like the larger issue of who the estate tax affects, that's just an inconvenient detail of their scare tactics.

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Return of the Estate Tax
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