The House Votes to Increase Income Taxes

As has been well covered in blogland (for just two examples, see Kevin Drum and Josh Marshall) and traditional media, today the House voted to permanently repeal the estate tax. I have nothing substantive to add – my incredulity has long since been shattered by the Republicans’ apparently endless ability to reduce taxes on the rich and increase them on the middle class.

Let me simply point out that the repeal of the estate tax means that future income taxes will rise by some $40 or $50 bn per year (since the CBO estimates a cost of $30-$35bn per year starting in 2006, and the future tax hike surely won’t happen during the first few years), depending on exactly when financial markets and/or the US’s political leaders decide that endless massive deficits are not sustainable. To put that in very specific terms, today’s action will therefore cost an average-ish upper-middle income family (earning a net of about $70,000 per year) an extra $500 per year or so in taxes.