Mark Mellman: Death and taxes

Mark Mellman: Death and taxes
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Last week, House Republicans voted once again to repeal the estate tax. 

This newspaper reported that both parties were excited about the politics, which should mean one of them is wrong.


The reality is a bit more complicated, but while the Republican policy is fiscally irresponsible, and morally bankrupt, it is not politically foolish.

A dozen polls have asked Americans about whether to repeal the estate tax, and every one shows a majority in favor of ending the tax, with an average of two-thirds supporting repeal. 

“Ah, the clever phrase ‘the death tax’ did in the estate tax,” you say. Not true.

Public antipathy to estate taxes predates the use of the term “death tax” by at least 60 years. In the midst of the Great Depression, polls found strong opposition. A dozen years before the term “death tax” was coined, in 1982, 64 percent of Californians voted to end what was labeled an “inheritance tax.” 

Survey experiments reveal little difference between the terms. In a National Election Study survey, 68 percent favored repeal of the “estate tax,” while 70 percent had the same view about the “death tax.”

I can hear my Democratic colleagues shouting now, “If they only knew how few people paid it!”

Most don’t. Between a fifth and a third of voters had some sense of just how few people are taxed, given current exemptions. 

According to the IRS, the largest percentage of deaths subject to the tax was in 1977, when fewer than 8 percent of decedents left taxable estates. By 2013, the latest year for which data is available, fewer than two-tenths of 1 percent of those who died were subject to the tax — a grand total of 4,687 individuals in the entire country.

But does that information change people’s views? Some scholars say yes, others no. But those who find an impact usually peg it at between 10 and 14 points — not enough to create a majority against repeal when an average of two-thirds favor it.

One exception is an online experiment conducted by a group of economists from Princeton, Harvard and Berkeley, in which part of the sample was asked about increasing (not repealing) the estate tax and the other was told first that there was currently an exemption up to $5 million and that only about 1 in 1,000 people are wealthy enough to pay the tax.

How much difference did it make? The information produced a huge 36-point swing, far more than in other similar experiments. Unfortunately, a month later, the effect was down to 20 points, leaving only 38 percent supporting a higher estate tax. 

Ignorance is only one reason Americans (among others) oppose inheritance taxes. They assume it means taxing income twice, which they regard as inherently unfair. Others think taxes are too high and look to eliminate some. A third expect to get rich themselves.

Democrats won’t win by campaigning for the estate tax, and Republicans won’t lose by supporting its repeal. 

However, Democrats do better when the argument is about priorities, not principle. 

Candidates can make clear that estates worth less than $5 million should not be taxed. After that, we face a choice: We can either keep the tax on the wealthiest few thousand people in the country — with estates valued above $5 million — or lose the equivalent of what the federal government spends on cancer research, heart disease research, Alzheimer’s research, AIDS research and the Centers for Disease Control and Prevention — combined.  

Republicans will be hurt because repealing the estate tax for estates over $5 million looks like what it is: helping the very wealthiest Americans by creating a tax loophole for the richest one-tenth of 1 percent, at the expense of the rest of us. 

In the end through, both parties should ratchet down their excitement over the politics of estate taxes.  

Mellman is president of The Mellman Group and has worked for Democratic candidates and causes since 1982. Current clients include the minority leader of the Senate and the Democratic whip in the House.