- GOP Sen. Chuck Grassley argued that getting rid of the estate tax would reward those who spend their money responsibly.
- Grassley, who has long argued, despite scant evidence, that the “death tax” crushes small farms and businesses, faced swift criticism on social media.
Sen. Chuck Grassley argued in an interview published Sunday that getting rid of the estate tax, which applies to about 5,000 largely high-income Americans, would reward those who invest, rather than those who spend their money on “booze or women or movies.”
“I think not having the estate tax recognises the people that are investing,” Grassley, an Iowa Republican, told the Des Moines Register, “as opposed to those that are just spending every darn penny they have, whether it’s on booze or women or movies.”
Grassley said that his family business, which he runs with his son and grandson in Iowa, would likely be subject to the tax if he and his wife die on the same day.
Republicans, including Grassley, have long advocated for eliminating the tax, which applies to inherited assets worth more than $US5.5 million – or $US11 million for married couples. But they also have attempted to argue that getting rid of what they call the “death tax” would benefit small family farms and businesses that are forced to liquidate in order to pay the 40% tax.
According to analysts at the nonpartisan Tax Policy Center, a total of 80 small farms and businesses would pay the estate tax throughout the country. And the top 10% of income earners pay nearly 90% of the tax.
“The federal estate tax may force family members to liquidate to pay the death tax,” Grassley said in a statement earlier this year. “It’s harder than ever for families to pass down the family-run farm or business from one generation to the next. The death tax creates financial hardship for family businesses to survive and thrive.”
President Donald Trump has falsely claimed that “millions” of small businesses and farms are subject to the “crushing” tax.
“To protect millions of small businesses and the American farmer, we are finally ending the crushing, the horrible, the unfair estate tax, or as it is often referred to, the death tax,” Trump said during a September speech in Indianapolis.
Grassley’s new justification drew swift criticism on social media, with Democrats decrying the comments as unfairly criticising how taxpayers spend their money.
“Darn straight, Sen. Grassley. If we gave that money in middle class tax cuts, they’d just waste it on hookers and blow, right?,” Jesse Ferguson, a former spokesperson for Hillary Clinton, tweeted.
“Between Grassley and Hatch an awful lot of contempt emerging in last few days for people w/out the good sense to be rich enough to benefit from the GOP tax bill,” tweetedRonald Brownstein, a editor of the Atlantic, also referring to Republican Sen. Orrin Hatch.
Grassely responded to the criticism in a statement to Business Insider on Monday.
“My point regarding the estate tax, which has been taken out of context, is that the government shouldn’t seize the fruits of someone’s lifetime of labour after they die,” the senator said. “The question is one of basic fairness, and working to create a tax code that doesn’t penalise frugality, saving and investment.”
Critics have argued that the Republican tax reform bill, which narrowly passed the Senate in the early hours of Saturday morning, largely benefits the wealthiest Americans, with the vast majority of tax cuts going to corporations and top income earners. Both the Senate and House versions of the bill would double the exemptions to the tax to $US11 million for individuals and $US22 million for couples, and the House bill would repeal the tax entirely in 2024.
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