Greg Sargent shares the bad news:
Of all the insulting lies we’ve heard about Democratic proposals to tax the rich, perhaps the worst is the idea that they would devastate owners and operators of family farms.
Republicans have made this claim for at least 20 years, to help protect large estates from taxation when passed down to wealthy heirs. As president, Donald Trump embellished this further, adding the idea that estate taxes threaten salt-of-the-earth family-owned trucking businesses.
Now a new version of this line is back. Only this time, it’s being pushed by a Democrat who’s advocating against a key tax provision in President Biden’s $3.5 trillion “human infrastructure” plan
A swarm of lobbyists is gearing up against Democratic efforts to tax corporations and the wealthy to fund major investments in our people and in preserving the future home of human civilization. One thing the lobbyists want to protect is a loophole allowing untold inherited wealth to escape taxation.
When people say the economy is “rigged,” this is what they’re talking about. As it is, wealth and investment income are not taxed as labor income is, so those amassing large fortunes often already receive privileged tax treatment.
But in addition, when estates are passed down to heirs, for tax purposes, assets are assigned the value they have at that point of transfer. If assets are then sold later, they’re taxed based on their appreciation in value from that point, effectively allowing all the appreciation before then to permanently escape taxation.
This is one way billionaires can get away with paying so little in income taxes relative to their wealth, whereas most Americans have income taxes taken from each paycheck.
Biden’s plan would combat this. It would tax those assets based on their appreciation from the original point of acquisition, thus taxing all that unrealized value. That’s what lobbyists want to prevent. One of them is Heidi Heitkamp, the former Democratic senator from North Dakota. The New York Times reports that her effort is “well-financed,” though details are lacking, and that she’s pushing the argument that taxation at death is bad politics:
Ms. Heitkamp said she was finding a receptive audience among potential swing voters in rural areas, especially owners of family farms, even though Democrats say such voters would never be affected by the changes under consideration. Lobbyists already expect this piece of the estate tax changes to wash out in the lobbying deluge.“This is very consistent with my concern about revitalizing the Democratic Party in rural America,” Ms. Heitkamp said. “You may want to do this,” she said she had counseled her former colleagues, “but understand there will be risk, and risk is the entire agenda.”
If Democrats don’t preserve the loophole that allows fabulous amounts of wealth to escape taxation when passed down to wealthy heirs, they might alienate hardscrabble rural voters!
Funny, we keep hearing Democrats are losing rural voters because they’re no longer the party of the working class (by which critics mean the White working class) and have become the party of cosmopolitan elites, tech billionaires and woke corporate investors.
Now they risk losing more of those voters if they put a tiny crimp in those elites’ efforts to maintain entrenched and inherited privileges across generations? Whatever happened to the narrative that non-cosmopolitan Real Americans went for Trump to protest this rigged political economy?
It makes no sense at all. But please, these Real Americans don’t actually care about any of that in any case. This whole argument is some right wing cant to protect rich people for sure, but the only thing the Real Americans actually care about is keeping racial and ethnic minorities and foreigners down — and owning the libs. The Democrats should do this for the good of the country without expecting any electoral rewards from white, rural America because they won’t get any.