Today, I gave the following speech speech on the floor of the United States Senate. "Mr. President" refers to the president of the Senate.
Each and every day, it gets harder and harder to listen to my Republican friends who race to the Senate floor telling the American people how "concerned" they are about the $13 trillion national debt and how "we have to get our financial house in order."
As you know, under the leadership of George W. Bush, these same Republicans turned a record-breaking federal surplus left by President Clinton into record-breaking deficits. Back then, their rallying cry was "deficits don't matter" articulated by then-Vice President Dick Cheney. This "deficits don't matter" philosophy gave us two wars that were not paid for -- and there are estimates that the Iraq War alone will end up costing some $3 trillion, $700 billion in tax breaks to the richest one percent, a $400 billion unpaid for prescription drug program written by the pharmaceutical industry, and a $700 billion bailout of Wall Street.
But under President Obama, Republicans have seemingly taken a 180-degree turn. Now, apparently, deficits do matter. Now, they say we can't afford to extend unemployment insurance to two million Americans who lost their jobs in the worst recession in modern history. And, they say we can't create new jobs by rebuilding our crumbling infrastructure or transforming our energy system.
And the Republican hypocrisy is about to advance to a whole new level. In the name of "fiscal responsibility" they are opposing virtually every effort to help the middle class and working families of our country. But, when it comes to the needs of millionaire and billionaire families, they have no problem reducing revenue by hundreds of billions of dollars. In other words, they are deficit hawks when it comes to the needs of ordinary people, but they are big spenders when it comes to the needs of the rich.
Mr. President, four years ago, every Republican but two voted to completely eliminate the estate tax -- a tax that has been in existence since 1916 and impacts only the very richest families in the country -- the top three-tenths of one percent. This huge tax break for the wealthy, if passed, would increase the national debt by more than $1 trillion over a ten-year period.
Let me tell you who the major beneficiaries of this tax break would be. Would it be the average middle class worker who during the Bush years saw a $2,200 decline in his income? No. That person would not get one penny of help by repealing the estate tax. Would it be a single Mom trying to save up to send her daughter to college? No, I'm afraid not. Not one penny for that person.
Would it be one of the millions of senior citizens who are struggling to survive on Social Security? No. No help for them from this Republican tax break.
And I should add here sadly that there are also a few Democrats who are supporting this giveaway.
So, Mr. President, who are the major beneficiaries of the repeal of the estate tax or as the Republican pollsters like to call it the "death tax"?
Well, if we completely repealed the estate tax, it would provide an estimated $32 billion tax break for the Walton family -- the founders of Wal-Mart.
So, let me make a contrast here with regard to Republican philosophy. They believe that it is a good idea to give a $32.7 billion tax break to one family worth $86 billion, but when it comes to providing $35 billion for an emergency extension of unemployment benefits to some two million Americans who lost their jobs through no fault of their own, the Republicans are just not there. One family gets almost $33 billion in tax breaks, two million working class Americans get nothing. Maybe that makes moral sense to somebody, but not to me.
But, Mr. President, it is not just the Walton family that our Republican friends and a few Democrats want to help.
Permanently repealing the estate tax would also provide an $11 billion tax break to the Mars candy bar family, a $9 billion tax break to the Cox cable family; and a $2.5 billion tax break to the family that founded Campbell's Soup. No one in the bottom 99.7 percent of the population would gain one cent from these tax breaks.
Today, while they may not have the votes to permanently eliminate the estate tax Republicans are working feverishly to push legislation to substantially lower the tax. In fact, they have already succeeded in eliminating the estate tax this year (and this year alone) as a result of President Bush's $1.35 trillion 2001 tax cut legislation. Wiping out this tax in 2010 has already allowed four billionaire families to receive their entire inheritance without paying a dime in federal estate taxes including the family of George Steinbrenner.
Mr. President, at a time when this country has a $13 trillion national debt, the highest level of childhood poverty in the industrialized world, a crumbling infrastructure, a desperate need to transform our energy system which would create millions of new jobs, it is beyond comprehension that anyone would advocate huge tax breaks for millionaires and billionaires.
And, that is why I have introduced the Responsible Estate Tax Act with Senators Harkin, Whitehouse, Sherrod Brown and Franken. This legislation would raise $318 billion over the next decade by establishing a graduated inheritance tax on estates over $3.5 million.
I actually can't take credit for this legislation. It is an idea that was developed 100 years ago by Republican President Teddy Roosevelt who said: "The absence of effective state, and, especially, national restraint upon unfair money-getting has tended to create a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power ... Therefore, I believe in a ... graduated inheritance tax on big fortunes, properly safeguarded against evasion and increasing rapidly in amount with the size of the estate."
In order to gain support for the permanent repeal of the estate tax, or a major reduction in estate tax rates, the Republicans and lobbyists representing the super-rich are doing what they do best -- distorting reality. They have created a mythology that a responsible and a fair estate tax (or as they call it, a "death tax") will somehow destroy family farms and small businesses. Nothing could be further from the truth. As usual, they are using their old tactic of pretending to worry about the needs of ordinary people as a smoke screen to serve the wealthy special interests.
In terms of the preservation of family farms, something that I feel very strongly about, the American Farm Bureau was asked to come up with an example of a single family farm being lost as a result of the estate tax. They couldn't find one farm that had to be sold as a result of the estate tax. Not one. My bill provides even more protections to family farms than previous law.
In terms of small businesses, the non-partisan Tax Policy Center has estimated that only 80 small businesses and farm estates throughout the country paid an estate tax in 2009 -- representing 0.003 percent of all estates. In other words, virtually every single small business and farm in this country would not pay any estate taxes under my bill, and because of protections in the tax code their effective tax rate was only 14%. And, the relatively few people who inherit small businesses that pay an estate tax are given 14 years to pay it off. They don't have to pay it all in one year.
What this debate is really all about is which side are you on? And the Republicans have answered loud and clear. When it comes to the needs of the unemployed and the uninsured, when it comes to protecting the interests of the struggling middle-class, the Republicans are deficit hawks. But if you are a billionaire family who needs a huge tax break that will cost hundreds of billions, no problem.
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