Estate tax
I used my first column for The Fiscal Times to take on all those who insist that the only way to deal with the federal deficit is by cutting spending. Contrary to those who repeat the "it's a spending problem" mantra, spending definitely is not the only issue and spending cuts are not the only possible response.
I missed this when it occurred a little over a week ago, but the Wall Street Journal is now saying the term "death tax" should not be used by its reporters when writing about estate taxes.
Here's the money quote:
"...the term death tax has become too politicized to be of any use except in editorials. Bury it."
This sudden and dramatic drop in temperature in Hell apparently was prompted by what the Journal said was negative reader reaction to this story on October 31 with the lead "With the federal estate tax disappearing for most people, state death taxes have emerged as a surprise new worry."
As I posted at the time, the Journal needed to correct itself and apologize. It just did one of those explicitly and one implicitly.
The Wall Street Journal should be so ashamed of this that it should voluntarily print not just a correction but also an apology. This lead and third graph are reprehensible:
With the federal estate tax disappearing for most people, state death taxes have emerged as a surprise new worry.
***
That is down from the 17,500 estates that would have faced death taxes under the previous $2 million limit, the Urban-Brookings Tax Policy Center estimates.
As I've said before, an estate tax doesn't tax death any more than the income tax taxes life.
(Hat tip to TPM.)
Megan McArdle picked up on my post from yesterday about CNBC's use, or what I said was the misuse, of the phrase "death tax" as the headline for the piece it aired on the estate tax. I agree with Megan that CNBC's use of that phrase was a political choice that is worth noting and (at least from my perspective because I don't want to put too many words in her mouth) criticizing.
In response to what she wrote, Megan then received 82 comments (at least as of about 6 am EDT this morning) that mostly debated the theory behind the estate and gift tax.
As always happens when this tax is discussed, Megan's commenters were working far too hard. A reason may have been stated for a tax on estates and gifts when it was first imposed, and that reason may have become the stuff political myths are made of since then. But the estate and gift tax was imposed for reasons that had very little to do with anything other than the need to raise revenue.
I'm going to play Dean Baker for a moment and criticize the media on an economic issue.
CNBC ran the report below yesterday about the estate tax. The only problem was that the network decided to label the tax it was discussing as the "death tax" and in doing so immediately became a participant in one of the great public relations hoaxes of all time.
