Last week, Alex Seitz-Wald noted that Gov. Tim Pawlenty (R-MN) wants to pay for an extension of the Bush tax cuts for the rich by repealing the stimulus package. In addition to there not being anywhere close to enough money to cover the $830 billion cost of extending the cuts for the richest two percent of Americans, this means that Pawlenty is willing to raise taxes on the middle class in order to cut them for the rich.
But in the same interview, Pawlenty actually doubled down on his desire to cut taxes for the very wealthy at the expense of working families. Seconds after saying that lawmakers need to get “serious” about cutting entitlements like Social Security and Medicare, he said that the estate tax — which only affects the richest 0.25 percent of households — needs to be lowered or eliminated, adding that a cut in the tax proposed by Sens. Jon Kyl (R-AZ) and Blanche Lincoln (D-AR) was not “reasonable enough or low enough”:
No, I think the estate tax should be lower than that. I don’t think that’s reasonable enough or low enough…There’s an argument to be saying ‘let’s just eliminate the estate tax.’ I mean, why do we even have it? The notion that the government’s going to reach into your pocket at the time of your death.
The Kyl-Lincoln plan to cut the estate tax would cost $91 billion over ten years, with more than 99 percent of the benefits going to the already ultra-wealthy. Repealing the tax entirely, as Pawlenty suggests, would cost $784 billion over ten years, relative to current law, while costing $273 billion more than President Obama’s proposal to permanently set the tax at the 2009 level of 45 percent, with a $3.5 million exemption.
At the 2009 level, 62.5 percent of estate tax revenue comes from estates worth more than $20 million and another 35 percent comes from estates worth between $5 million and $20 million. These are the households for which Pawlenty thinks a huge tax cut is warranted, while programs that the middle-class counts on need to go under the knife.
Earlier this year, Pawlenty wrote in a Politico op-ed that “we need to admit our addiction to the illusion of government ‘free stuff’ and demand that spending be cut in almost all areas.” But evidently by “all areas,” Pawlenty means all areas that help the middle class, while the very-rich should be exempt from paying their fair share in taxes.