In November, Rep. Mia Love and other House Republicans unveiled and passed their version of the 2017 Tax Reform Plan. The bill contained several provisions that, much like the final version passed in December, drastically slashed taxes on wealthy households and added over $1 trillion to our nation’s staggering debt level of $14 trillion.
Among its provisions was the gutting and eventual repeal of the estate tax.
The estate tax is paid by a small group of wealthy U.S. households on the property transferred to their heirs when they die. Prior to passage of the tax reform plan, fewer than two households in 1,000 paid the tax because it required an individual net worth of $5.5 million — $11 million for married couples — before it first kicked in.
Under the newly passed bill for 2018, the net worth exemption for wealthy households has been doubled, slashing the estimated number of estates paying the tax by a whopping 60-65 percent. Overall, the reduction is projected to add $72 billion to our national debt over the next decade.
A primary reason the estate tax exists is to help reduce the creation of a permanent, powerful class of moneyed interests — a remedy supported by Thomas Jefferson and credited by Alexis de Tocqueville as a cornerstone of America’s early success.
Another reason is to ensure those who benefit most from our market-friendly economic system pay an equitable portion of their proceeds back into it, keeping the system sustainable and healthy for the generations that follow.
Given our country’s growing debt burden and lopsided concentration of wealth into fewer hands, a reasonable estate tax seems more appropriate than ever. And yet, ask Love about why she supported its repeal?
“The estate tax ... I have a lot of rural farmers ... I have a lot of people that that really affects them. The philosophy to me is that when a family works really hard, and they look like they’ve got a lot of land, and it looks like they’ve got a lot of equipment but they’re cash poor ... I met a family that has never taken a vacation ever. There’s nobody there that they can hire that can take care of their cattle.”
This is a response from Love to a question about why she supported changes to the estate tax in the House tax reform bill. The statement was made and recorded on Nov. 21, delivered to citizens during her “Open Office Hours,” a series of small, carefully guarded group meetings with constituents.
As hard to follow as Love’s plea was, there’s an even bigger problem with it. Less than 80 family-owned farms in all of America were projected to pay the estate tax in 2017.
Not 80,000. Eighty. We’re talking 8-0.
Plus, the average tax bite takes less than 6 percent of the value of those estates, while special provisions reduce the impact further, allowing farmers to spread out payments at ultra-low interest rates.
Given that trust fund babies are now more likely to benefit from the new tax bill than farm owners, Love’s rationale was disingenuous at best and uninformed at worst.
The citizens of Utah’s 4th Congressional District deserve better reasoning and more thoughtful representation from Love. Instead, we were saddled with funny farm math that adds up to more debt in exchange for barnful of bull.
Andrew Graft, West Jordan, is a founding board member of the CD4 Coalition, an alliance of voters dedicated to thoughtful, forward-thinking government in Utah’s 4th Congressional District. He holds a degree in economics from Utah State University and an MBA from Westminster College of Salt Lake City.