Politicians Could Benefit From Failing to Resolve Estate Tax Repeal Questions

The following, taken from Edward J. McCaffery, The Politics of Estate Tax Reform, National Center for Policy Analysis, Feb. 10, 2010, discusses a possible motivation for politicians to always keep estate tax repeal on the table but unresolved:

Politicians like special interests because they like money, and they need organized interests to pay them. Politicians thus proactively create or frame issues of high stakes to small groups. Once politicians have these issues, they have little interest in resolving them. The debate itself is a continuing opportunity on all sides of the issue to raise campaign contributions. Estate tax repeal is a perfect example. 

Rich families pay to get rid of the tax; investment banks, insurance companies, large nonprofits and others pay to keep it.  * * * As long as there are votes that threaten to resolve the issue to either side’s advantage, there is money to be had. And so, we predict, Congress will vote on the matter over and over, avoiding a final resolution.

Special thanks to Hani Sarji (LL.M. in Tax candidate at New York Law School) for bringing this to my attention. 

As a reminder, Hani Sarji is the author of a blog entitled Future of the Federal Estate Tax, a blog that “will keep you up-to-date and link you to relevant and timely articles on the federal estate tax reform.”