One would think the Senate was considering the repeal of the estate tax. OK, this effort died.
Deroy Murdock appeals to environmentalists to support the repeal of the estate tax with this claim:
A predominantly Democratic group of U.S. senators wants to preserve a law that destroys 2.98 million acres of forests annually an area the size of Yellowstone and Yosemite national parks, combined. When the Senate votes this morning, Republicans and fair-minded Democrats should stop this arboricide by killing the federal death tax.
To be honest, this one is a new one on me. Now if this claim sounds absurd – Murdock has several sources including a collection of the usual spin from Chris Edwards. Murdock suggests that Edwards said the following:
While liberals support the Death Tax in order to break up concentrations of wealth, large and concentrated land holdings often are good for the environment, the Death Tax winds up favoring developers over natural habitat.”
I see a lot of nutty claims in the Edwards piece but nothing along this line. Murdock references a 2001 piece by Dan Miller – one of Saxton’s hacks at the Joint Economic Committee, but all this piece did was to cite some 1995 piece by something called the Keystone Center:
Federal estate tax requirements are a major obstacle for private landowners whose land stewardship has been sensitive to its environmental value and who would like to be able to pass on their land to their heirs without destroying that value. The imposition of federal estate taxes often forces large parcels of environmentally valuable land to be broken up into smaller, less environmentally valuable parcels. Some of the best remaining habitat for endangered species is put at risk in this manner
It’s a far cry from this claim that habitat might be put at risk to Murdock’s claim that the estate tax destroys 3 million acres a year. But it seems that the Competitive Enterprise Institute relied on this Keystone quote to put forth Murdock’s spin many years ago. No matter how absurd the argument nor how dishonest the cherry picked quotes can be – these canards as to the alleged negative effects of the estate tax never die.
Now the whole point of this NTO oped is to show us how easily we could cut $300 billion out of the Federal budget “without touching defense appropriations or homeland security outlays (with the exception of privatizing the Transportation Security Administration and a few other small-bore reforms)”. And by some higher order differential calculus that only Edwards and Slivinski comprehend, a $300 billion spending cut will eliminated a $500 billion budget deficit. Miller writes:
So how hard is it to find $300 billion to trim? Not so tough, if you follow the Cato methodology.
Let’s add the proposals up – eliminate the Community Development Block Grants in the Department of Housing and Urban Development and save $6 billion a year PLUS eliminate the Traffic Control to save another $3 billion a year. Hey, why do we need air traffic control when these Cato rocket scientists can translate $9 million into $300 billion and eliminate a $500 billion deficit by “magic. Presto!”?
Actually – Edwards did propose $300 billion in spending cuts, which included almost $25 billion in reductions for spending on elementary and secondary education. Perhaps today’s lesson is that any reader of the National Review who does not realize that Murdock and Miller are blowing smoke likely need to go back to elementary school.
But Max Sawicky picks up on this statement from Chris Edwards:
Much of the value in large estates consists of unrealized capital gain, which currently avoids capital gains taxes because asset basis is stepped up to market value at death. That has the effect of reducing federal revenues by more than $50 billion annually.
Max fires back:
In other words, this income is the bulk of large estates and but for the estate tax, it would never be taxed.
But let’s give Chris the last word:
Under most estate tax repeal plans, some portion of unrealized gains would be carried over to heirs who would pay tax when they sold the assets.
Could someone call a tax attorney? Oh wait, the attorney won’t be interested in the proposed change in tax law as it thankfully failed.