The U.S. Senate vote June 12 to preserve the inheritance estate tax has stirred fury in White House circles, with George W. Bush’s top adviser, Karl C. Rove, calling for “a war” on Senate Democrats who blocked the administration’s bill for permanent repeal of what they call the “death tax.”

A 27-page Powerpoint presentation outlining this “war” strategy gives the Bush administration’s outlook for individual House and Senate races on how to exploit the estate tax vote to target Democrats for defeat in next fall’s election. The Democrats hold a razor-thin majority control of the Senate since Sen. Jim Jeffords (I-Vt.) left the Republican Party last year.

The Senate voted by a margin of six against the bill by Sen. Phil Gramm (R-Tx.) to permanently repeal the estate tax. “If the Senate does not act, the tax would rise out of the grave in 2011 and start destroying family farms and family dreams,” Gramm intoned. The Senators, unmoved by his prophecies of doom, voted his bill down.

Rove told the National Federation of Independent Business, “Don’t look at it as a defeat. This is a war and we need to make an ongoing commitment to winning the effort to repeal the death tax.”

An analysis featured in The Washington Post reveals that the heirs of George W. Bush would benefit by as much as $9.9 million if the estate tax is repealed. Richard Cheney’s heirs would reap an extra $40 million; Defense Secretary Donald Rumsfeld’s heirs as much as $120 million; and Treasury Sec. Paul O’Neill’s, $50.7 million. Kenneth Lay, former CEO of Enron, would add an estimated $59 million to his estate.

Enacted in 1916, the estate tax is the only federal tax on accumulated wealth. Citizens for Tax Justice (CTJ) warns that repeal would aggravate the concentration of wealth in the hands of the elite. The estate tax is among the most progressive forms of taxation, collecting all its revenues, as much as $30 billion each year, from the wealthiest 1.4 percent of taxpayers and two-thirds of the revenues from the wealthiest 0.2 percent of taxpayers. Well over 90 percent of taxpayers pay no estate taxes.

For the Bush administration, family farmers are the “poster child” of the drive to repeal estate taxes. “The truth is that less than one in 20 farmers leaves a taxable estate,” the CTJ declares. “Even for the small number of farm estates that do pay any tax, the typical payment is only about $5,000. Only 0.5 percent of total estate taxes is attributable to farm assets.”

Yet the Bush administration and most GOP lawmakers presented the estate tax as “relief for family farmers” so children could inherit farms unimpeded by the inheritance tax. The fraudulent aspect of this touching appeal for family farmers was exposed by National Farmer’s Union President Dave Frederickson, who told a Congressional hearing that the recently enacted farm bill already doubles the estate tax exemption for farmers from $750,000 to $1.5 million. It means, he said, that only the very wealthiest 2 percent of farms would be subject to any estate taxes.

So eager are the Republicans for this tax cut, calculated to cost the government $750 billion over the measure’s 10-year projected term, that Sen. Gramm said, “This will become a campaign issue for next fall.”

In particular, they are aiming their darts at the Democratic Senators from North and South Dakota up for reelection this fall. Sen. Kent Conrad (D-N.D.), chair of the Senate Budget Committee, defended his vote against repealing the estate tax on grounds that the Bush administration has pushed the nation into a deep budget deficit. “It would be unconscionable to drive this nation into deeper deficits and deeper debt,” he said.

If Republicans make tax relief for the rich their main pitch for the farm vote, it may turn out to be their Waterloo.

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