Opinion: Raise estate tax on America's very rich
At a time of historic economic inequality, it should be a no-brainer to raise a tax on inherited wealth for the very rich. Yet there鈥檚 a move among some members of Congress to abolish it altogether.
If you鈥檙e as horrified at the prospect of abolishing the estate tax as I am, I hope you鈥檒l聽watch and share the accompanying video.聽
Today the estate tax reaches only the richest two-tenths of one percent, and applies only to dollars in excess of $10.86 million for married couples or $5.43 million for individuals.聽
That means if a couple leaves to their heirs $10,860,001, they now pay the estate tax on $1. The current estate tax rate is 40 percent, so that would be 40 cents.
Yet according to these members of Congress, that鈥檚 still too much.聽
Abolishing the estate tax would give each of the wealthiest two-tenths of 1 percent of American households an average tax cut of $3 million, and the 318 largest estates would get an average tax cut of $20 million.
It would also reduce tax revenues by $269 billion over ten years. The result would be either larger federal deficits or higher taxes on the rest of us to fill the gap.
This is nuts. The richest 1 percent of Americans now have 42 percent of the nation鈥檚 entire wealth, while the bottom 90 percent has just 23 percent.聽
That鈥檚聽the greatest concentration of wealth at the top than at any time since the Gilded Age of the 1890s.
Instead of eliminating the tax on inherited wealth, we should increase it 鈥� back to the level it was in the late 1990s. The economy did wonderfully well in the late 1990s, by the way.聽
Adjusted for inflation, the estate tax restored to its level in 1998 would begin to touch estates valued at $1,748,000 per couple.
That would yield approximately $448 billion over the next ten years 鈥� way more than enough to finance ten years of universal preschool and two free years of community college for all eligible students.
Our democracy鈥檚 Founding Fathers did not want a privileged aristocracy. Yet that鈥檚 the direction we鈥檙e going in. The tax on inherited wealth is one of the major bulwarks against it. That tax should be increased and strengthened.
It鈥檚 time to rein in America鈥檚 surging inequality. It鈥檚 time to raise the estate tax.
