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Wednesday, February 21, 2007

While wounded soldiers languish in mouse-infested VA clinics....
Posted by Jill | 5:49 AM
...the Crawford Caligula presents a budget that contains $32.7 BILLION -- that's BILLION, folks -- in tax cuts for the Walton heirs ALONE, in the form of complete elimination of the estate tax.

The link to this article by Matt Taibbi comes to us courtesy of the definitely brilliant Cernig:

On the same day that Britney was shaving her head, a guy I know who works in the office of Senator Bernie Sanders sent me an email. He was trying very hard to get news organizations interested in some research his office had done about George Bush's proposed 2008 budget, which was unveiled two weeks ago and received relatively little press, mainly because of the controversy over the Iraq war resolution. All the same, the Bush budget is an amazing document. It would be hard to imagine a document that more clearly articulates the priorities of our current political elite.

Not only does it make many of Bush's tax cuts permanent, but it envisions a complete repeal of the Estate Tax, which mainly affects only those who are in the top two-tenths of the top one percent of the richest people in this country. The proposed savings from the cuts over the next decade are about $442 billion, or just slightly less than the amount of the annual defense budget (minus Iraq war expenses). But what's interesting about these cuts are how Bush plans to pay for them.

Sanders's office came up with some interesting numbers here. If the Estate Tax were to be repealed completely, the estimated savings to just one family -- the Walton family, the heirs to the Wal-Mart fortune -- would be about $32.7 billion dollars over the next ten years.

The proposed reductions to Medicaid over the same time frame? $28 billion.

Or how about this: if the Estate Tax goes, the heirs to the Mars candy corporation -- some of the world's evilest scumbags, incidentally, routinely ripped by human rights organizations for trafficking in child labor to work cocoa farms in places like Cote D'Ivoire -- if the estate tax goes, those assholes will receive about $11.7 billion in tax breaks. That's more than three times the amount Bush wants to cut from the VA budget ($3.4 billion) over the same time period.

Some other notable estimate estate tax breaks, versus corresponding cuts:

  • Cox family (Cox cable TV) receives $9.7 billion tax break while education would get $1.5 billion in cuts
  • Nordstrom family (Nordstrom dept. stores) receives $826.5 million tax break while Community Service Block Grants would be eliminated, a $630 million cut
  • Ernest Gallo family (shitty wines) receives a $468.4 million cut while LIHEAP (heating oil to poor) would get a $420 million cut

And so on and so on. Sanders additionally pointed out that the family of former Exxon/Mobil CEO Lee Raymond, who received a $400 million retirement package, would receive about $164 million in tax breaks.

Compare that to the Commodity Supplemental Food Program, which Bush proposes be completely eliminated, at a savings of $108 million over ten years. The program sent one bag of groceries per month to 480,000 seniors, mothers and newborn children.


Now I know that there are people who have been caught up in a Kafkaesque mess as a result of the estate tax. Our own resident wingnut troll, Barry, has posted at his own blog about someone he knows who ended up with a taxable estate because of the value of a house she inherited that was also unsaleable for various reasons. So the woman was stuck with five figures in estate taxes that she was unable to pay because the inheritance that she needed to pay the taxes was in the form of a house she couldn't sell. But it seems to me that a situation like that one, where there is an illiquid inherited asset that is not easily converted to a liquid one for tax purposes, could be dealt with in estate tax law, rather than eliminating the tax entirely so that Lee Raymond's family pays $164 million less in taxes.

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