The notion that eliminating the estate tax, often referred to as “the death tax,” would be a gift to the wealthy is nonsense, said Grover Norquist, founder of Americans for Tax Reform.
President-elect Donald Trump and Republican leaders on Capitol Hill will pass a package of tax cuts, including the death of “the death tax,” Norquist said Monday on CNBC’s “Squawk Box.”
During the same interview, Jared Bernstein, former chief economist to Vice President Joe Biden, said the estate tax only applies to “0.2 percent of estates,” with an exemption of nearly $11 million per couple for 2016.
While affecting a small number of Americans, the estate tax “actually rises some significant revenue,” and without it, “a bunch of income” would go untaxed, said Bernstein, calling a repeal “a pure gift for the wealthiest of the wealthy.”
An exasperated Norquist scoffed at Bernstein’s premise.
“When I walk down the street, and a mugger … doesn’t take my wallet, he didn’t give me my wallet,” Norquist analogized. “This idea when the government fails to steal your money … and tax it, that it gave it to you is nonsense. It’s not a gift.”
Norquist also highlighted a reduction in the corporate tax rate as a major pillar of GOP tax reform efforts. “We’re going to take the corporate rate from 35 percent to either 15 or 20 [percent]. I like 15 better.”
A territorial tax system for companies will also be adopted by Republicans, he said.
“While they may deem repatriation for some of the money that’s overseas and tax it now, it would be never taxed again,” he said. “We’ll become a normal country that taxes things within its borders, and doesn’t tax income overseas.”
Bernstein said he does not see a need for any tax cuts, and would even argue for increased revenue to pay for Trump’s trillion-dollar major infrastructure spending proposals.
“But, in fact, a tax cut is coming. What we need to do is think about how we get the most bang for the buck,” he admitted.
“I like any change to be at least revenue neutral,” said Bernstein, a senior fellow at the Center on Budget and Policy Priorities. “I’ve [also] argued for revenue positive. And Republicans are nowhere near there.”