The Rich Get Richer If House Republicans Repeal the Estate Tax

[Jefferson23]

Bill Black, a former bank regulator, discusses the history of why the federal estate tax exists and why the Republicans want it repealed - April 16, 2015

Bio

William K. Black, author of The Best Way to Rob a Bank is to Own One, teaches economics and law at the University of Missouri Kansas City (UMKC). He was the Executive Director of the Institute for Fraud Prevention from 2005-2007. He has taught previously at the LBJ School of Public Affairs at the University of Texas at Austin and at Santa Clara University, where he was also the distinguished scholar in residence for insurance law and a visiting scholar at the Markkula Center for Applied Ethics.

Black was litigation director of the Federal Home Loan Bank Board, deputy director of the FSLIC, SVP and general counsel of the Federal Home Loan Bank of San Francisco, and senior deputy chief counsel, Office of Thrift Supervision. He was deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement.

Black developed the concept of "control fraud" frauds in which the CEO or head of state uses the entity as a "weapon." Control frauds cause greater financial losses than all other forms of property crime combined. He recently helped the World Bank develop anti-corruption initiatives and served as an expert for OFHEO in its enforcement action against Fannie Mae's former senior management.

Transcript 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%.

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[MiniMe]

1. I didn't have to pay federal estate tax when my mom died, but I did have to pay state estate tax

It hurt to write that check out, but I had to figure that I wouldn't have had to pay it if I didn't have it. As much as it hurt to write the check, I figured I owed it. I am definitely not part of the 1% now, and never will be. But I inherited enough to be comfortable now.