As I’ve discussed extensively, the currently expired estate tax is scheduled to come back in 2011 at a 55 percent rate with a $1 million exemption. President Obama and many congressional Democrats have proposed permanently setting the estate tax at the 2009 level of 45 percent with a $3.5 million exemption but Republicans, in their constant zeal to reduce the tax burden of the wealthy, blocked that proposal.

Since then, Republicans have been going gangbusters with the claim that the estate tax will devastate family farms across the country. The latest was Sen. Chuck Grassley (R-IA), who “absolutely” agreed with an Agwired interviewer’s assertion that the estate tax will decimate “our farmers of the future”:

Q: I mean, I think that probably, maybe we’ll see your opinion, it just has a huge impact on these people who are major landowners in some cases. Who are going to be our farmers of the future, for example, right?

GRASSLEY: Absolutely, because if we go back to a million dollar estate tax exemption, which is going to happen January 1, we’re going to be selling a lot of farm land to pay estate taxes. And even at $3.5 million, which I think is where we’re going to end up, is still going to be detrimental to some family farmers. But I think that’s where we will end up and I think we’ll do it before the end of the year.

Listen here:

For starters, exceedingly few farms ever pay the estate tax. In fact, in 2001, when the estate tax was at 55 percent with a $675,000 exemption, the American Farm Bureau “could not cite a single example of a farm lost because of estate taxes.” Even if the tax were to come back as scheduled by current law, only one in ten farms would owe any tax at all.

But no one has actually proposed allowing the current law to take its course. Under the Obama administration’s plan to permanently set the tax at the 2009 level — which only needs the approval of the Senate, because it has already passed the House — just 1.6 percent of farms in the country would face the estate tax, according to the U.S. Department of Agriculture. Those farms have an average net worth of about $7 million.

The fact remains that the estate tax overwhelmingly affects the super-wealthy, with nearly two-thirds of the revenue coming from estates worth $20 million or more. Interestingly, Grassley believes that the administration’s plan will be the one that’s adopted, which means he does not see the estate tax cut crafted by Sens. Blanche Lincoln (D-AR) and Jon Kyl (R-AZ) as ultimately becoming law.

A mile-long oil sheen is now reportedly visible where an offshore oil and gas platform exploded this morning in the Gulf of Mexico. The Vermilion Oil Rig 360, owned by Mariner Energy — which was recently purchased by Apache Corp. — was producing about 58,800 gallons of oil and 900,000 cubic feet of gas per day.

As ThinkProgress noted, just yesterday Mariner Energy said the Obama administration’s moratorium on offshore drilling is “trying to break us.” Mariner Energy also made a recent filing to the Securities and Exchange Commission saying its operations “may be impacted in the future by increased regulatory oversight, which may increase the cost of” Outer Continental Shelf wells “and delay drilling and production therefrom.”

But if today’s explosion wasn’t enough evidence, government safety records indicate that Mariner Energy and Apache Corp. are desperately in need of regulation. The Bureau of Ocean Energy Management’s Outer Continental Shelf Civil/Criminal Penalties Program cited Mariner Energy for two violations just in the first six months of this year, and once more in 2007.

A summary of the fines assessed against Mariner Energy:

– Two violations in 2010, totaling $55,000.

– One violation in 2007, for $30,000.

Apache Energy has been cited for 22 violations since 1998, totaling over $1.74 million in fines, including a $435,000 fine this year for removing a key piece of equipment from a sump system, which then “could not automatically maintain oil at a level sufficient to prevent discharge into the Gulf of Mexico.”

A summary of the fines assessed against Apache Corp.:

– Two violations in 2010, totaling $690,000.

– Two violations in 2008, totaling $135,000.

– Three violations in 2007, totaling $486,000.

– Five violations in 2006, totaling $216,000.

– Three violations in 2005, totaling $122,000.

– One violation in 2004, for $5,000.

– One violation in 2002, for $13,000.

– Four violations in 2001, totaling $70,000.

– One violation in 1999, for $6,000.

Mariner Energy is probably right that the company will be “impacted” by “increased regulatory oversight.” But its workers, and the Gulf ecosystem, might avoid being impacted as they were today.

A favorite Republican talking point lately is that the businesses are not creating jobs because they are “hamstrung by uncertainty.” According to this argument, the specter of taxes and regulation is paralyzing companies, and if only Congress would preserve the Bush tax cuts for the wealthy and promise to not produce any new regulations, a flood of business investment would ensue.

Last night on CNBC, Rep. Mike Pence (R-IN) told supply-side guru and Reagan disciple Larry Kudlow that the way to get businesses to “unleash” the nearly $2 trillion in cash and assets they’re currently sitting on is to extend the Bush tax cuts for the rich and then cut marginal income tax rates even further. “C’mon, we know what works,” Pence said:

C’mon, we know what works. Larry, you know what works better than most Americans, and that is across-the-board marginal tax relief…We’ve got to demand, whether it’s this fall, whether it’s after the election, or whether it’s in a newly minted Congress next year, we’ve got to demand that we preserve tax relief, no American sees a tax increase on January 1, and then promote across-the-board tax relief on marginal rates that’ll really unleash all that more than $2 trillion in trapped capital in this economy.

Watch it:

It seems like some variation of “c’mon!” has become the Republican leadership’s go-to argument these days, but Pence shouldn’t be so smug when it comes to the efficacy of marginal income tax cuts to spur business investment. As Michael Ettlinger and John Irons found, business investment following the Clinton-era tax increase far outstripped that following either the Bush or Reagan supply-side tax cuts:

One of the basic premises of supply-side theory is that tax cuts will produce substantial increases in business investment. This, however, has not been the case…In the two supply-side eras the average growth rate in real investment was unimpressive: It was 2.8 percent in the seven-year period beginning in 1981 and 2.7 percent in the period beginning in 2001. In the period with higher taxes beginning in 1993, the growth rate was 10.2 percent. In the parallel portions of the business cycles following the tax changes of 1981, 1993, and 2001, investment grew faster under the 1993 tax regime than under either supply-side regime. The average rate of growth was 10.5 percent post-1993, 1.4 percent post-1981, and 6.1 percent post-2001.

“The failure of investment to respond to supply-side tax cuts greatly undermines the central premise of the theory underlying the policy,” Ettlinger and Irons wrote.

What is actually holding businesses back, as Paul Krugman wrote, is that there is not enough demand for their products, due to high unemployment and hour and wage cuts. “After all, why should businesses expand their production capacity when they’re not selling enough to use the capacity they already have?” Krugman wrote.

Pence, of course, doesn’t have the strongest grasp on data, so it’s not surprising that he buys the supply-side voodoo. But the situation is, in fact, the opposite of what Pence and Kudlow frame as common knowledge.

The U.S. Coast Guard said this morning that a natural gas and oil drilling platform exploded 80 miles off the coast of Louisiana. A Coast Guard spokesperson said the platform, Vermilion Oil Rig 360, is an oil and gas platform in 2,500 feet of water and is owned by Houston-based Mariner Energy. It is not currently producing oil or gas. (The AP updates its story to note the platform was in production at the time of the fire.) Apache Corp. recently purchased Mariner in a multi-billion dollar deal.

Just yesterday, however, the Financial Times reported that employees from Apache and Mariner, along with thousands of oil industry workers, rallied in Houston to protest the Obama administration’s offshore drilling moratorium that was designed as a safety precaution after BP’s disastrous Gulf oil spill. A Mariner Energy employee chastised the Obama administration for its drilling moratorium, which would not have affected the rig that exploded today:

Companies ranging from Chevron to Apache bussed in up to 5,000 employees to the Houston convention centre to underline to Washington the industry’s contribution to the country. [...]

“I have been in the oil and gas industry for 40 years, and this administration is trying to break us,” said Barbara Dianne Hagood, senior landman for Mariner Energy, a small company. “The moratorium they imposed is going to be a financial disaster for the gulf coast, gulf coast employees and gulf coast residents.”

Apache Corp. recently agreed to buy BP assets in order to help the British oil giant meet its financial obligations as a result of its Gulf of Mexico oil spill.

Thirteen workers were on the rig when it exploded; the Coast Guard has said that “all 13 workers involved in the production platform explosion are accounted for, but one person is injured.”

California’s Republican senate nominee Carly Fiorina has been outspoken in her support for extending the Bush tax cuts for the wealthy (because, hey, they pay for themselves!). At the same time, however, she has scoffed at the recent bills before Congress that extend aid to small businesses and school districts, calling the latter “so full of accounting gimmicks it’s disgraceful.”

Last night, during her first debate with Sen. Barbara Boxer (D-CA), Fiorina was asked “how do you justify immediate help for the wealthiest Americans, but not for average Californians that might be out of a job?” In response, she recited some scary-sounding statistics about unemployment and said that she wants to cut regulations and taxes:

The vast majority of that [2001 and 2003] tax relief went to middle class Americans…To create jobs we need to make sure that, in particular, our small businesses, our family owned businesses, our innovators, and our entrepreneurs are freed from strangling regulation and freed from taxation.

Watch it:

Still at a loss for why Fiorina opposed both the small business lending bill — which also renews small business tax credits — and the state aid bill? That’s because she neglected to mention them. At all. She didn’t even try. She also claimed that the majority of the Bush tax cuts went to the middle class, when nearly two-thirds of them went to the top 20 percent of income earners.

Later in the debate, Fiorina derided the small business lending bill as “TARP junior” (even though she supported the original TARP), but as USA Today reported this week, small businesses are actually waiting for the bill to pass before they start expanding, as they want to take advantage of the loans it would provide. “I’m still waiting for Congress to sign off on the bill,” said Amarjit Kaur, who runs a convenience store and gas station in Wood Village, OR.

The fact of the matter is that preserving the Bush tax cuts for the wealthiest two percent of Americans would do next to nothing for small businesses. Neither would eliminating the estate tax, which Fiorina touched upon. And when a bill with actual relief for small businesses came before the Congress, Fiorina opposed it, and then failed to justify her opposition when directly asked.

So all the lip service that Fiorina pays to small businesses is nothing more than a shell in which to house her desire to eliminate taxes for the wealthiest Americans. Igor Volsky and Amanda Terkel have more regarding Fiorina’s debate performance.