Estate's Rites

As early as next month, some Democrats seem ready to go along with most Republicans and implement a permanent repeal to the estate tax, a change that would reward the wealthy and drag down the economy by increasing the deficit. But it doesn't have to be this way. The estate tax represents a profoundly American idea: Although parents should be able to pass on wealth to their children, great concentrations of personal wealth should not grow unchecked from generation to generation. As Franklin Delano Roosevelt put it, “Inherited economic power is as inconsistent with the ideals of this generation as inherited political power was inconsistent with the ideals of the generation which established our government.” Today, only about the wealthiest 1 percent of those who die in a given year pay the estate tax. With estate planning, married couples can leave at least $3 million to their children completely tax-free. In 2001, President Bush's first tax bill phased out the estate tax by 2010, but because the tax changes expire after that year, the tax returns in 2011. Now, the president, Senator Jon Kyl, and other members of Congress are pushing to make the phaseout permanent. That would eventually cost about $75 billion per year, and another $23 billion a year in interest expenses.