From the book 'American Dynasty' by Kevin Phillips --- pp 68-69
The Princeton economist Alan Kreuger wrote in 2002 that "if the US stands out in comparison with other countries, it is in having a more static distribution of income across the generations with fewer opportunities for advancement". Indeed, a sequence of economic studies found rapid rise in how much of a father's earnings advantage passed to his sons. In the 1980s, it had been 40 percent; by the late 90s, it was 65 percent. Of the major Western nations, only Brittain had as little inter-generational mobility.
Several decades of tax policies favorable to the upper brackets and their investments had already aided stratification. However, legislation enacted in 2001 to phase out the estate tax by 2010 heralded further concentration. Lisa Keister, author of Wealth in America, cited estimates that without progressive rates in the estate tax of the nineties, the share of US wealth owned by the top 1 percent in 1998 would have been 43 percent instead of 38 percent. Working from population andn acturial tables, forcasters expected record dollar levels of estates to pass to heirs between 2001 and 2020, a prospect that spurred upper-bracket pressure for tax "relief". Given that fully half of the federal estate tax was paid in 1999 by the 6.6 percent of estates over $5 million and a quarter by the 467 estates worth more than $20 million, its full elimination promised to be the ultimate enabler of wealth dynastization.
According to the Center on Budget and Policy Priorities, the disappearance of the estate tax threatened a mammoth ten-year $740 billion revenue loss during the post-repeal decade after 2012. Looking ahead seventy-five years, the center guessed that the revenues sacrificed by the estate tax repeal would equal nearly 40 percent of the entire projected shortfall of the Social Security Trust Fund. Even some of the nation's richest me found these priorities appalling. Billionaire investor Warren Buffet worried that "without the estate tax, you will in effect have aristocracy of wealth, which means you pass down the ability to command the resources of the nation based on heredity rather than merit.
The Princeton economist Alan Kreuger wrote in 2002 that "if the US stands out in comparison with other countries, it is in having a more static distribution of income across the generations with fewer opportunities for advancement". Indeed, a sequence of economic studies found rapid rise in how much of a father's earnings advantage passed to his sons. In the 1980s, it had been 40 percent; by the late 90s, it was 65 percent. Of the major Western nations, only Brittain had as little inter-generational mobility.
Several decades of tax policies favorable to the upper brackets and their investments had already aided stratification. However, legislation enacted in 2001 to phase out the estate tax by 2010 heralded further concentration. Lisa Keister, author of Wealth in America, cited estimates that without progressive rates in the estate tax of the nineties, the share of US wealth owned by the top 1 percent in 1998 would have been 43 percent instead of 38 percent. Working from population andn acturial tables, forcasters expected record dollar levels of estates to pass to heirs between 2001 and 2020, a prospect that spurred upper-bracket pressure for tax "relief". Given that fully half of the federal estate tax was paid in 1999 by the 6.6 percent of estates over $5 million and a quarter by the 467 estates worth more than $20 million, its full elimination promised to be the ultimate enabler of wealth dynastization.
According to the Center on Budget and Policy Priorities, the disappearance of the estate tax threatened a mammoth ten-year $740 billion revenue loss during the post-repeal decade after 2012. Looking ahead seventy-five years, the center guessed that the revenues sacrificed by the estate tax repeal would equal nearly 40 percent of the entire projected shortfall of the Social Security Trust Fund. Even some of the nation's richest me found these priorities appalling. Billionaire investor Warren Buffet worried that "without the estate tax, you will in effect have aristocracy of wealth, which means you pass down the ability to command the resources of the nation based on heredity rather than merit.
posted by Gary at 6:51 PM
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