Tax talk at Mount Vernon

Secret meetings of lawmakers are a staple in Washington. The latest to occur is the reconvening of the “Gang of Six” with two new additional members in Mount Vernon for the next three days, forming the all new “Gang of Eight.”

The original Gang of Six included Senators Mark Warner (D-Va.), Kent Conrad (D-N.D.) and Dick Durbin (D-Ill.) on the Democratic side, and Republican Senators Saxby Chambliss (R-Ga.), Mike Crapo (R-Idaho), and Tom Coburn (R-Okla.). Add newcomers Senator Mike Bennet (D-Colo.) and Mike Johanns (R-Neb.). 

The Senators will meet at Mt. Vernon on the Potomac over the next three days in hopes they can create a framework for the challenging task of getting anything through a polarized lame duck Congress. With a fiscal cliff that all sides agree will raise taxes on the ever redefined “middle class” there is no time to lose.

Remember the old plan? The original gang had a framework that included 1) Shaving trillions in debt, 2) Cutting spending in the short term, 3) Reforming the tax code, 4) Reforming the budget process and 5) Reforming Social Security. It failed to stave off the current mess. 

The president even tacitly supported the plan, before reviewing any specifics. He told reporters: “The framework is broadly consistent with what we’ve been working on here in the White House and with the presentations I’ve made to the leadership when they’ve come over here.” That was CNN in July 2011.

What will be different?  And more importantly from our perspective, what will happen with the estate tax? Perhaps it will help to have new perspectives from two additional Senators.

Senator Johanns is a former secretary of Agriculture and is on record for supporting creative solutions to the estate tax. In 2011 he voted for an amendment to create a deficit-neutral reserve fund for estate tax relief.  (111th Congress S.Amdt. 873 to S.Con.Res 13). ASSET is nothing short of creative.

Senator Bennet from Colorado actually grew up in Washington and understands how this town works.  He’s been an outspoken supporter of the “Pay As You Go” system. ASSET fits this niche effectively. 

In 2010 Senator Bennet stated "We should also move on estate tax relief that focuses on small business owners, farmers and ranchers, to boost our economy. My plan to reform the estate tax would raise exemption levels to $5 million for single filers and $10 million for joint filers, hold the tax rate for the remaining estates at the 2009 level, and extend estate tax relief for farmers and ranchers whose kids want to keep using the family land for farming and ranching." ASSET actually provides that same relief to small business owners, farmers and ranchers. 

In the end game, all our eyes will be on the House of Representatives after the election.  Speaker John Boehner (R-Ohio) has a ready position to negotiate because House Republicans already passed extensions of all the Bush tax rates for a year. They also passed a bill to soften the devastating defense cuts. We need an end to the constant game of chicken and a bipartisan agreement, particularly on the estate tax.

ASSET, Americans Standing for the simplification of the estate Tax offers a revenue neutral, permanent solution to the consequences of the current estate tax collection method.  It is creative and progressive, and costs the taxpayers nothing.  In fact, some speculate it will save on taxpayer compliance, IRS collection, yet reap the same revenue to the government. Someone on staff at Ways & Means called it a “three headed unicorn.”  We just call it bipartisan, something else that doesn’t exist.

As we hear in the tune from the Pirates of Penzance “Hail, Hail, the Gangs all here” and then retort “What the heck to we care, what the heck to do we care now?” We care. And we care now. It is time to tell our members we care right now about the outcome of any bipartisan discussion.

Smith is president of Americans Standing for the Simplification of the Estate Tax (ASSET).

 

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