Bush
and the
"Death Tax" Lie

Summary.  This lie was spread by GWBush and a gaggle of Republicans, so, we can't pin this lie entirely on him -- but he did it, too.  They claim that the estate tax is destroying family farms and small businesses and the tax should be eliminated.  Lie.  The only reason they want to eliminate the estate/inheritance tax is to ensure that the wealthiest Americans will never be taxed.

Bush's Lie

Let's not blame GWBush entirely for this lie -- he was aided in it by every other Republican.

In his February 3, 2001 radio address, Bush claimed that his tax package will "eliminate the death tax" thereby "saving family farms and family-owned businesses."

Several weeks later, at the swearing-in of Secretary of Agriculture Ann Venemann, Bush said he would be a "friend to the American farmer" by: "To keep family farms in the family, we're going to get rid of the death tax."

"Death tax" is an inflammatory term dreamed up by the Republicans to scare people -- it refers the the "estate tax" or the "inheritance tax" that is paid by a small number of quite wealthy people on their estate -- if you inherit a million or more dollars, you'll pay tax on the inheritance.  Very few of us have to worry about it.  The argument that Bush and the rest of the Republican liars made was that the estate tax was driving family farms and family-owned businesses out of business because families were forced to sell family farms and family businesses to pay inheritance taxes,

The facts

Very few estates covered by the estate tax

In the first place, the Center on Budget and Policy Priorities, using information from the Congressional Joint Committee on Taxation, determined that only 1.9 percent of estates were even covered by the estate tax.  Notice that this is all estates -- not just estates that involve a farm or family business.  This is because estates under $675,000 in value are exempt from the estate tax -- and that figure will increase each year until 2006 when estates under $1,000,000 in value are exempt from estate taxes.

Furthermore:

• An estate of any size can be bequeathed to a spouse completely free of taxes.
• A couple can pass on an estate to heirs and double the exemptions (e.g., a single person can pass on $675,000 to $1,000,000 to an heir untaxed -- a couple acting jointly can pass on twice these limits, untaxed).
• Family farms and family-owned businesses are eligible for special tax treatment, including doubling the exemption level.

No farms covered by the estate tax

In 1999, an Internal Revenue Service analysis found that "no working farmers" owed any estate taxes.

The American Farm Bureau said it could not cite a single example of a farm lost by estate taxes.

Lloyd Brown, president of Hertz Farm Management in Nevada, Iowa, stated in an interview with the New York Times that his organization manages over 400 farms and none of his clients or anyone he knows had encountered problems due to the estate tax.

Who benefits from eliminating the estate tax?

So, who will benefit from the abolition of the "death tax?"  A New York Times analysis showed:  "The overwhelming majority of beneficiaries (of abolishing the estate tax) are the heirs of people who made their fortunes through their businesses and investments in securities and real estate."

The fact, then, is that GWBush and the Republicans want to abolish the estate tax to allow their wealthy contributors to pass on fortunes to their heirs tax free.

Read the details

Follow this link to the analysis of the estate tax done by the Center on Budget and Policy Priorities.

The impact of repealing the estate tax

The Center on Budget and Policy Priorities study cited above reaches this conclusion:

"Repealing the estate tax would be very costly. The estate tax repeal proposed by President Bush would cost $294 billion over the 10 years, 2002 through 2011.   But this proposal phases in slowly. The estate tax is only fully repealed in calendar year 2009, and the full revenue effects would not be felt for at least another two years because of the time it takes to settle an estate and pay any taxes. Once the repeal is fully in effect, it would cost over $60 billion a year. Thus the cost of the proposal in the second 10 years — from 2012 to 2021 — would likely be about three-quarters of a trillion dollars, more than twice as expensive as in the first 10 years."

Conclusion

George W. Bush lied about the need to abolish the estate tax.  He has now increased the federal budget deficit by $300 billion based on a lie.

George W. Bush is a liar.