Issue #101

by Art Kelly

1. The U.S. Senate defeated 59-39 an attempt by Senator Jim DeMint (R-SC) to prevent re-instatement of the federal estate tax.

During the Bush Administration, Congress passed legislation that gradually phased out the estate tax so that it is now at zero. However, that legislation provided a “sunset” provision on this tax relief so that the estate tax will automatically be re-instated next year at 55% unless Congress takes action to stop it.

Many families would have to sell small farms and businesses to pay the estate tax.

An “estate” is what is left over after paying a lifetime of federal, state, and local taxes. To tax again all over again what has already been taxed so many times before is greedy government’s final grab.

In presenting his motion on the Senate floor, DeMint said:

“It is immoral for us to take what people work for throughout their lives. Their property, their income has all been taxed at least once before.”

In a news release prior to the vote, DeMint cited a study by Douglas Holtz-Eakin, former director of the Congressional Budget Office, that re-instatement of the estate tax could destroy 500,000 jobs. He also pointed to a report from the U.S. Department of Agriculture that one in ten farms will be hit by a re-institution of what is frequently called the “death tax.”

Needing a two-thirds majority to suspend the rules to permit consideration of legislation to permanently repeal estate taxes, DeMint’s motion received only 39 votes to 59 against it and 2 not voting.

2. A new Gallup Poll has found that 77% of the American people believe that Social Security is either in a crisis or faces major problems.

Just 21% believe, as the AARP does, that Social Security has only minor problems or no problems at all. Only 1% has no opinion.

The last issue of this newsletter and a previous issue have reported on the extremely serious problems facing Social Security. Over $2.605 Trillion has been “borrowed” from the Social Security Trust Fund and spent on the general operations of the federal government. The “assets” in the Trust Fund are just IOUs from the government to itself.

Conservative seniors groups have repeatedly warned that, because of this raid on Social Security, full benefits cannot be paid beyond 2016. But with the deterioration in the economy, that doomsday may be much more imminent.

Of those persons who are now retired, only 37% think they will continue to receive their current Social Security benefits. Fully 56% expect a cut in benefits.

For younger workers between the ages 18 to 34, only 22% think they will receive any Social Security benefits at all when they retire. For those 35 to 54, only a slightly more optimistic 32% think Social Security benefits will be available.

Dr. Frank Newport, Editor in Chief at Gallup, said these poll results are “more pessimistic than at any time” since the question began being asked in 1989.