Republicans have again picked up the fight against inheritance taxes, and they have the public on their side. Democrats, on the other hand, have an important industry behind them.
The House on Thursday passed a bill that would totally repeal the estate tax, also known as the death tax. The Senate already passed an amendment doing this same thing during the the budget debate. President Obama on Tuesday promised to veto repeal, saying it would "add hundreds of billions of dollars to the deficit to provide large tax cuts exclusively to the very wealthiest Americans."
Obama wants to go in the opposite direction: His 2014 budget called for increasing the estate tax rate to 45 percent and lowering the exemption to $3.5 million. Again, he pitches this as a story of the wealthy versus average taxpayers. But if you peek behind the curtain of populist rhetoric, you see plenty of big money, heavy lobbying, and hypocrisy on the side of the death-taxers.
Consistently, about two-thirds of Americans tell pollsters that they oppose the death tax. The Family Business Coalition has brought together dozens of groups this year to advocate repeal of the death tax, groups as widely diverse as the National Council of Farm Cooperatives, the National Black Chamber of Commerce, and the Association for Hose and Accessories Distribution.
These groups represent business owners who, if they have enough success, will be subject to the death tax. The tax could force heirs to liquidate the family business in order to pay the tax bill. This unfairness is a major reason most Americans dislike the death tax, even though very few will ever pay it.
But some segments of the population feel differently — most notably, the estate-planning industry. A survey by an industry magazine in 2011 found that 63 percent of estate-planning attorneys opposed repeal of the estate tax.
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