Back in June 2006, the General Assembly and Gov. Kaine made a huge mistake, giving what the Washington Post correctly called "a bone to the rich" by repealing the estate tax.
TWENTY STATES and the District of Columbia tax the estates of well-to-do residents upon their deaths -- generally those valued at $1 million or more. In Virginia, the so-called death tax is even less onerous; it kicks in for estates worth at least $2 million, which seems a generous-enough exemption for the affluent.But that's not sufficient for the governor or most Virginia lawmakers. They are poised to scrap the estate tax altogether and forfeit the $140 million it yields annually. That may not sound like a crushing sum in the context of a $72 billion biennial budget. But given the legislature's failure to find a long-term funding fix for the state's snarled roads and highways, it is odd that lawmakers would surrender that pot of money for the benefit of the state's richest individuals and families.
The Post added that "scrapping the estate tax -- the single most progressive tax levied by governmen...sacrifices fairness for the many on the altar of special favors for the few." How few? As we pointed out at the time, the estate tax repeal helped 871 of the wealthiest Virginia families. As we also pointed out, this money would be taken away from education, the environment, public safety, and other important Virginia needs. All sacrificed on "the altar of special favors for the few."
Let's face it, this was the single worst move that Tim Kaine has made as governor (and there have been several, the second worst being the Wise County coal fired plant, the third worst being the no-bid deal to Bechtel for the Metro to Dulles project, the fourth worst being the Transportation Monstrosity with abuser fees and regional authorities, the fourth worst...ok, we'll stop now).
The fact is, signing the estate tax repeal was morally wrong (taking money from poor people, the elderly, the sick and vulnerable to give to rich people who don't need it?!?), anti-progressive (the estate tax is by far the most progressive tax around), politically unhelpful (it's not like the anti-tax/flat-earth Republicans were going to like him anyway). And now - SURPRISE SURPRISE - we need that $140 million per year badly. Unfortunately, it's going to further enrich the already rich, while the rest of us get screwed over royally. Nice job, geniuses!
Hell, I'd let all the rich folks have a tax of 0% if our country could meet Al Gore's 10 year plan to produce electricity through renewables and get off of oil.
Until, that is, the wealthiest's little financial manipulations and bad business judgment while sitting on (or running) the bank boards blithely produces risky results which adversely impact their wealth accumulation (such as, for example, Bear Stearns or IndyMac). Then, of course, suddenly the free market is ignored and all at once the American taxpayer via the Federal Reserve is supposed to rescue these rich folk and insulate them from their bad, exploitive business plan, and save them from themselves at our expense (while, of course, leaving them to enjoy their earlier profits undisturbed). Nationalize risk, privatize profits---- now there is a business plan which will definitely not induce a change in behavior by those wealthy few.
The "free capitalist market will solve everything," was what we heard when some warned about the madness of unregulated lending in the subprime loan business model, and, yes, in the CAFTA negotiations, too. But now it seems "free market" only applies when it is the little guy being hurt---- when the big guy suffers, the perpetrators ("perpe-traitors?) demand succor ("sucker"?) from the little guy whom they abused. One more irony of history.