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October 21, 2005

Restore the Estate Tax- Help Harriet Miers!

Henry Blodget at Slate has probably drawn a more insightful portrait of Harriet Miers than almost anyone else by carefully reading her financial disclosure forms.

They show a conservative investor who's basically destroyed her own financial retirement caring for her 91-year-old mother, who has required in-home and nursing-home care since the mid-1990s.

And this financial picture of Bush's personal lawyer illustrates why two of Bush's policy proposals -- social security privatization and eliminating the estate tax -- are both so misguided.

Social security is the basic safety net for all retired persons, but the reality is that if people could tap privatized retirement savings for other purposes -- as Harriet Miers apparently has as she's raided her own IRA savings - they will do so, especially for medical expenses.  

And as for the estate tax, it's a sad commentary on how few estates are taxed that Harriet Miers, supposedly one of the most successful corporate lawyers in Texas for thirty years, doesn't have enough wealth to owe a dime of federal estate tax if she died today, even under the pre-Bush rules of a few years ago.  

You know what would really have helped Harriet Miers more than social security privatization or cutting the estate tax?

Federally-subsidized ong term health care insurance.

If you want to help most middle class families preserve assets for retirement and for any loved ones upon their death, the most important public policy is expanding home health care subsidies.  

The reality of health care costs is that they are completely arbitrary-- some of the elderly have low-medical cost golden years, then die suddenly leaving most of their assets intact.  Others plunge into multi-year sickness that eat up all of their assets and much of their children's assets accumulated over a lifetime.  

So how can we even out this arbitrary force in most peoples lives?

How about, hmm... a tax, yes, that's it, a uniform tax on all estates, no, how about just on larger estates, that can pay for universal long-term health care insurance to supplement Medicare.    Such a tax would be predictable and far less arbitrary and unfair than the "sickness tax" that randomly blots out the savings of people like Harriet Miers.

And wait, we just conveniently have such a tax, the Estate Tax, or the "death tax" in neoconservative vilification.  

But as Harriet Miers life illustrates, better a "death tax" -- that taxes a relatively small and certain percentage of an estate only if you are very wealthy -- rather than the "sickness tax" that can eat up large portions of a person's or family's savings.  

If progressives want a killer political response to Bush's calls for making the Estate Tax permanent, it's to keep the estate tax and devote the proceeds to long-term health care.  The purpose is the same -- preserving assets for the next generation -- but ending the "sickness tax" would have far broader appeal than conservative wailing about a "death tax" that applies only to a a tiny percentage of the population.

Posted by Nathan at October 21, 2005 12:01 PM