SHARMINI PERIES: Welcome to The Real News Network. I'm Sharmini Peries coming to you
from Baltimore.
Both sides of the house are gearing up for a vote on Thursday to repeal the estate tax.
To give you a better understanding of what all of this is about, I'm joined by Bill Black.
Bill is an associate professor of economics and law at the University of Missouri, Kansas
City. He's a white-collar criminologist and a former financial regulator, and author of
The Best Way to Rob a Bank is to Own One. He's a regular contributor to The Real News
Network, and he's joining us from Quito, Ecuador today.
Thank you so much for joining us, Bill.
BILL BLACK: Good to be here.
PERIES: So Bill, give us some context as to what the estate tax is all about, and why
the Republicans want to repeal it.
BLACK: So the estate tax is all about not wanting to create aristocracy in the United
States, and many other countries that have similar taxes, in which you start out as,
with a hundred million bucks, and you're sent to--money's no object, every activity you
can imagine to try to get you into Harvard, and et cetera. And so that wealth would simply
be self-perpetuating.
Now, the Republicans had a brilliant move about ten years ago, and they started calling
this the death tax. And you can see why that's a very effective label. It's interesting because
the Republican strategist who came up with the idea said he could never figure out why
the Democrats hadn't answered and said no, it's the billionaire's tax. Because that's
actually what it is. It's a tax that falls almost exclusively on people who are billionaires.
And so we're talking about, in any given year, ballpark 5,000 households. So this is not
something of the 1%, this is something of the one ten thousandth of 1%.
PERIES: Now Bill, why is this back on the agenda of the House? Give us some history
to that lineage.
BLACK: Yes. Bush, President Bush the second, George W, passed a repeal of the estate tax.
But he was only able to get sufficient political support to make the repeal temporary. And
eventually, President Obama refused to agree to extend the elimination of the estate tax,
and so the Democrat--I'm sorry, the Republicans have made it an important part of their agenda
for their absolute, again, wealthiest backers. The ones who give, of course, the mega dollars
that allow these political campaigns to try to get rid of the estate tax. And for the
political class, the donor class within the Republican party that gives these $50 million
dark money contributions. The death tax, as they would call it, is a major issue.
PERIES: And what happened, when did--you know, historically it was quite accepted that an
estate tax is a good thing for the nation. When did this historically turn?
BLACK: Only within the last 15 years. You're quite correct that from fairly early times
in the United States there was considerably opposition from all major parties to the idea
of creating an aristocracy of the ultra-wealthy that would continue to control a huge portion
of the wealth of the nation. And that uniformity of position among the political parties was
broken, as I say, only about 15 years ago in the Bush administration.
PERIES: And then apart from the terminology polarizing the discussion and debate, what
are the real issues that the Republicans have in opposing it?
BLACK: Well there aren't many real issues. There is an effort to create a phony issue
that says oh, this tax causes terrible problems for regular people. And the quintessential
example that they're talking about is, say, the Iowa farmer. Because it turns out the
Iowa farmer, if he or she owns really vast tracts, is not middle class, or anything remotely
like that. They have the machinery and equipment--if you've driven through Iowa as I have many
times, such that even smaller farmers have millions of dollars of equipment, and larger
farmers given the sharp rise in agricultural land prices are now multi-multi-millionaires
in many cases.
So again, because Iowa plays such an important role, particularly in the Republican quest
for the nomination, you get a very strong push, especially this time of year every four
years, to have a permanent repeal of the estate tax.
PERIES: So Bill, the bill was suspended, or the tax was suspended, for a long time. When
did it go back on the books?
BLACK: It went back on the books a couple of years ago when the Republicans and Democrats
were unable to reach a broader agreement on some fiscal issues. So the Republicans in
essence were using the estate tax repeal to hold hostage these broader agreements with
Obama at the beginning of his term. Saying we'll only give you that if you agree to continue
the suspension of the estate tax, so that those broader agreements would never--very
principled agreements of course. They were bad public policy. And finally the Republican
demands became too large and President Obama said no, and that meant that the temporary
repeal of the estate tax lapsed. So the estate tax is back in operation.
Now, the Republicans are moving as I say, particularly in this election season, particularly
under their arguments about how this is supposedly so important to farmers in Iowa to try to
make it a high priority repeal.
PERIES: Bill, as always, thank you so much for joining us and giving us this update of
what's happening in Washington.
BLACK: Thank you.
PERIES: And thank you for joining us on The Real News Network.