Last week, the Republican congress took major steps to protect the interest of the wealthy and powerful from average Americans. No, you didn't read it backward.
First on the agenda was the House version of the bankruptcy bill, which the Senate passed in March. Senate Republicans refused to add Democrat's amendments that would have protected the homes of the elderly, shielded those in bankruptcy due to catastrophic health care costs, exempted veterans from the harshest penalties and interest rates above 36 percent and even required credit card companies to explain the time it would take to pay off their balance by making minimum payments. The House also voted for the bill, which would make it harder to file for Chapter 7 bankruptcy protections and eliminate debt with a minimal loss of assets.
Under the new legislation, anyone above his or her state's median income (about $64,000 for a family of four in Ohio) will automatically be placed in Chapter 13 once they pass a means test
which measures a person's ability to repay their debts. Under Chapter 13 in the new bill, debtors will be faced with longer periods of repayment and possibly have to repay big-ticket items like cars and houses at purchase price rather than their current value while still making payments to creditors. Meanwhile, the legislation has a gaping loophole that allows millionaires filing for bankruptcy to withhold unlimited amounts through asset protection trusts. The bill was opposed by consumer groups and bankruptcy judges alike. Keith Lundin, a federal bankruptcy judge in Tennessee, told the Los Angeles Times The advocates aren't trying to fix the bankruptcy law; they're trying to mess it up so much that nobody can use it.
The bill has had significant support from credit card companies and their lobbying organization, the American Financial Services Association. One can just imagine the commercial: Bribing Congress to pass a bill written by your lobbyists: $40 321 784. Paying the president to sign the biased bill into law: $1
005
350. Knowing that democracy can still be bought: priceless. There are some things money can't buy
for everything else there are campaign contributions. Of the $40 million in contributions from the credit and finance industry to Congress since 1990, 36 percent have gone to Democrats, according to the watchdog organization Opensecrets.org. It is no surprise that House and Senate Democrats supported the bill, while not one Republican opposed it.
But the real shame last week was the House's vote to permanently repeal the estate tax in 2011. The bill passed 272 to 162, with 42 Democrats voting for its repeal, after a compromise bill was defeated. For decades, conservatives have pushed for its total repeal by convincing Americans that the death tax will apply to them or hurt family farmers. President Bush said The death tax results in the double taxation of many family assets while hurting the source of most new jobs in this country -America's small business and farms.
However, the tax only applies to estates over $1.5 million or $3 million for married couples. That's less than 1 percent of those who died in 2004. Of these, just 440 estates with any significant farm or small business assets paid any estate tax last year
according to the Center for American Progress. Even one of the leading advocates for repeal of estate taxes
the American Farm Bureau Federation
said it could not cite a single example of a farm lost because of estate taxes
the New York Times reported in 2001, a time when the estate tax applied to far more people than it does today. But when has the truth ever gotten in the way of the Republicans and powerful interests?
If the bill passes in the Senate, repealing the estate tax will have a major effect on the type of America we live in. Large estate holders will have less incentive to donate to charity, eliminating billions of dollars in giving each year. Coupled with the cap on dividends and capital gains taxes, repealing the estate tax will allow trust fund babies to live lives of leisure paying 15 percent or less to Uncle Sam, which is about the same rate paid by an unmarried worker earning $30,000 in 2004. In the decade following a potential repeal of the state tax, its absence will cost more than $700 billion, according to the Center on Budget and Policy Priorities. Because the White House and Congress continue to run up the national debt, the Paris Hilton Tax Cut
as it is being called, will eventually be paid for with cuts in services and through tax increases on the middle class. But, according to Bush, repealing the estate tax is simply a matter of basic fairness.
Mr. President, I simply disagree.
-Jess Wilhelm is a sophomore astrophysics major in the Honors Tutorial College. Send him an e-mail at jw176503@ohiou.edu.
