Favorite

Pryor's dilemma 


Senate Majority Leader Bill Frist promised another stab at repealing the estate tax and announced that by the Fourth of July the 90-year-old tax on great inheritances would be history. That ought to show the gentleman whose most famous words, “all men are created equal,” were recorded on the first Independence Day.

Frist may make good on the threat, too, if the Republicans can pick up the votes of one or both the Southern farm-state Democrats who voted not to invoke cloture two weeks ago: Mark Pryor of Arkansas and Mary Landrieu of Louisiana. Pryor and Landrieu are getting a hammering for their betrayal of people who stand to inherit vast fortunes. They are being reminded that they stand for re-election in two years. Sen. Blanche Lincoln, the senior Arkansas senator, has been in the Republican column all along on the estate tax and most other tax cuts for the rich.

If you think about it, Pryor and Landrieu face a breathtaking dilemma. As it stands, either may be the only thing that stands between a huge fortune and a stupendous fortune for a few thousand hungry heirs across the land, a few dozen of them in Arkansas. That is a lot of money to be arrayed against you in a small state election.

But that is not how the estate tax issue is characterized. They are accused of working not against the super rich but poor family farmers and little rural businesses. Sen. Lincoln and the Republicans described it that way in the earlier vote. Lincoln, who has always said she was standing up for the embattled family farmer when she voted to repeal the estate tax, told the Senate that she was fighting for the little people and jobs in rural America. At least she did not say, as she and others wailed for so long, that family farm estates had to be sold right and left to pay the estate tax, which snatched half the value of farm estates. It is rare for the tax to exceed even 20 percent of a farm or business estate and farms aren’t being forced to sale simply to satisfy estate taxes.

Farmers are being used as hostages in this historic battle to end the most progressive tax in American history and further undermine the nation’s fiscal health. According to the nonpartisan Joint Committee on Taxation and the Center for Budget and Policy Priorities, repeal would add a trillion dollars to the national debt in the first 10 years — the decade when baby boomers flood Social Security.

Just how badly does the estate tax hit the family farmers who so wrench the heart of Sen. Lincoln? Let us see.

Remember, this year the first $2 million of any estate ($4 million for a married couple) is exempt from taxes altogether. If an estate is valued at $3 million, taxes are owed on only $1 million. Applying that exemption to estate tax returns in the year 2000 would leave only 123 farm estates in all the 50 states and only 135 family businesses owing even a dime of taxes, and on most of those the taxes would be negligible.

Farms also enjoy special treatments under the estate tax that are available to no other estate. Unlike other estates, farm inheritances are taxed not on their market value but on their “productive” or “use” value — the same low standard that since the adoption of Amendment 59 in 1980 has put a property tax of a few dimes an acre on rich timber and farm land in Arkansas. The use-value standard amounts to an extra tax exemption of up to $900,000 for a farm estate.

And if a working family farm amounts to at least half the value of an estate, another $300,000 exemption is available.

If the heirs still owe some taxes on their daddy’s farm after these and other tax breaks, they have a grace period of up to 14 years to pay them. Would the IRS be that accommodating for you?

Sen. Pryor actually favors drastically slashing estate taxes by sharply raising the exemptions and lowering tax rates, which would swell the national debt by nearly as much as outright appeal but also end taxes on just about every family business in the land.

The Republicans will not permit a vote on any bill that would do that because, you see, those people are not what this is all about. The estates of the super rich, who have financed this 15-year campaign to repeal the tax, would still have to pay something on the untaxed fortunes passed on to heirs. That can’t be allowed to continue.




Favorite

From the ArkTimes store

Comments

Subscribe to this thread:

Add a comment

More by Max Brantley

More by Ernest Dumas

  • Trusting

    It is a Fourth of July ritual to appraise where we are in meeting the Declaration of Independence's promise to institute a government that would, unlike King George, secure human rights equally for everyone who sets foot on American soil.
    • Jul 6, 2017
  • Obamascare

    Republicans at long last may be about to see their most fervent wishes and wildest predictions materialize — millions of people losing their medical and hospital coverage, unaffordable insurance, lost jobs, a Medicare financial crisis, mushrooming federal budget deficits and fiscal crises across state governments.
    • Jun 22, 2017
  • Ethics upended

    Every week, Donald Trump finds another way to upend conventional ethics in government and politics. Here's one that has been in the making since the campaign but is reaching maturity in the Russian investigation: He is turning the heroes of government scandals into the villains.
    • Jun 15, 2017
  • More »

Readers also liked…

  • AEC dumps ALEC

    No matter which side of the battle over global warming you're on, that was blockbuster news last week. No, not the signing of the climate-change treaty that commits all of Earth's 195 nations to lowering their greenhouse-gas emissions and slowing the heating of the planet, but American Electric Power's announcement that it would no longer underwrite efforts to block renewable energy or federal smokestack controls in the United States.
    • Dec 17, 2015
  • No tax help for Trump

    The big conundrum is supposed to be why Donald Trump does so well among white working-class people, particularly men, who do not have a college education.
    • Aug 11, 2016
  • Dollars and degrees

    Governor Hutchinson says a high graduation rate (ours is about the lowest) and a larger quotient of college graduates in the population are critical to economic development. Every few months there is another, but old, key to unlocking growth.
    • Aug 25, 2016

Most Shared

Latest in Ernest Dumas

  • The ACA can be fixed

    Majority Leader Mitch McConnell threatened his 51 disciples in the Senate and his party with the gravest injury imaginable.
    • Jul 13, 2017
  • Trusting

    It is a Fourth of July ritual to appraise where we are in meeting the Declaration of Independence's promise to institute a government that would, unlike King George, secure human rights equally for everyone who sets foot on American soil.
    • Jul 6, 2017
  • Obamascare

    Republicans at long last may be about to see their most fervent wishes and wildest predictions materialize — millions of people losing their medical and hospital coverage, unaffordable insurance, lost jobs, a Medicare financial crisis, mushrooming federal budget deficits and fiscal crises across state governments.
    • Jun 22, 2017
  • More »

Event Calendar

« »

July

S M T W T F S
  1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30 31  

Most Recent Comments

  • Re: Another Jesus

    • Sorry, I have never written about Hillary Clinton's "blunders" in Benghazi. Since you call them…

    • on July 25, 2017
  • Re: Another Jesus

    • IBS, were you there in Benghazi to personally witness all of Hillary's blunders like you…

    • on July 23, 2017
  • Re: Another Jesus

    • If God felt it necessary to replace the ten commandments, he could do it like…

    • on July 23, 2017
 

© 2017 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation