Opinion

Kill the Death Tax

Photo of Rep. Darrell Issa
Rep. Darrell Issa
Chairman, House Committee on Oversight and Government Reform
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      Rep. Darrell Issa

      Congressman Darrell Issa represents the people of California’s 49th Congressional District in the United States House of Representatives, a seat he has held since 2001. The 49th District includes Camp Pendleton, the largest Marine Corps training facility in the United States, and the northern portions of San Diego County and southwest Riverside County. Congressman Issa and his wife Kathy live in Vista, CA. They have one son, William, and celebrated their 30th wedding anniversary in 2010.

      As a senior in high school, Issa enlisted in the United States Army. Through his Army service, he received an ROTC scholarship and graduated with a degree in business from Sienna Heights University in Adrian, Michigan. Upon graduation, Issa was commissioned as an Army officer, and ultimately obtained the rank of captain. He completed his active-duty military service in 1980 and turned his interests to the private sector.

      At the height of his career in business, Issa served as CEO of California-based Directed Electronics, a company that Issa founded and built in the mid-1990s to become the nation’s largest manufacturer of vehicle anti-theft devices, including the highly-successful Viper system. In 1994, Issa was named Entrepreneur of the Year by Inc. Magazine, Ernst & Young and The San Diego Union Tribune. During his leadership of Directed Electronics, Issa served as chairman of the Consumer Electronics Association, an organization of 2000 companies within the consumer technology industry that hosts the annual Consumer Electronics Show in Las Vegas. When he stepped down as CEO to serve as a Member of the U.S. House of Representatives, Directed Electronics employed nearly 200 people.

      As a Congressman and leader in California grassroots politics, Issa has championed the cause of smart, efficient government, and has pushed legislation to balance the federal budget and promote transparency across the federal bureaucracy. In 2003, Issa was the architect behind the successful popular uprising to recall former Democratic California Governor Gray Davis.

      Issa currently is a member of the House Judiciary Committee and the Oversight and Government Reform Committee, where he serves as the Ranking Republican Member. Previously, Issa served on the House Permanent Select Committee on Intelligence, the Foreign Affairs Committee, the Energy & Commerce Committee, and the Small Business Committee. As the holder of 37 patents himself, Issa has been vigilant about protecting the intellectual property rights of artists and other entrepreneurs to help protect America’s position at the forefront of innovation and creativity in the entertainment and technology industries. His successful efforts to fight human trafficking along the United States border has resulted in tougher laws, stiffer penalties, and more consistent enforcement. His watchful concern to guarantee that U.S. taxpayers receive the royalties they are owed from mineral interests on federal lands exposed fraud and mismanagement at the Mineral Management Service (MMS) in 2006.

      In 2008, when Congress was asked to pass the Troubled Asset Relief Program (TARP) in the wake of an historic financial crisis, Issa stood by his instincts as a businessman and opposed giving a blank-check bailout to Wall Street – he voted against all bailouts during the financial crisis. Refusing to give up and concede to those who favored a bailout-centered response to this and future financial failures, Issa put forward a proposal to create a bipartisan commission to uncover the root causes of the financial crisis. This idea was passed into law in early 2009 and the investigation commenced in January 2010. Issa expects the results will reveal government mistakes and protect U.S. taxpayers from future runaway government intervention in the financial and housing markets.

      Recognizing his success as a Congressional watchdog of taxpayer dollars, at the beginning of the 111th Congress House Republicans tapped Issa to serve as the top Republican on the House Oversight and Government Reform Committee, which is the main investigative committee of the United States House of Representatives charged with the protecting the interests of U.S. taxpayers and eliminating waste, fraud and abuse in the federal bureaucracy. In the first year of his leadership, the committee has undertaken numerous detailed investigations of the Countrywide Financial VIP Program that benefitted government officials with special reduced-rate mortgage loans, the illegal use of taxpayer dollars by the Association of Community Organizations for Reform Now (ACORN), the decades-old misplaced government agenda to manipulate the U.S. housing market through Fannie Mae and Freddie Mac that created the housing crisis, the politicization of science at the Environmental Protection Agency (EPA), and a broad investigation into the financial crisis of 2008-2009.

      As a fiscal conservative committed firmly to low taxes and free markets, Issa has opposed the rise of out-of-control government spending and fought tirelessly for the responsible, transparent use of taxpayer dollars. He’s pushed to achieve more whistleblower protections for those who report waste, fraud and abuse in the federal bureaucracy. And he’s offered substantive reform initiatives to open up government so that Americans know what’s happening in Washington and can become more democratically engaged in the day-to-day oversight of their government.

A brief window of sensible tax policy has opened for 2010, though if Congress doesn’t take action to permanently eliminate the Death Tax—now at zero percent—the rate will return to a whopping fifty-five percent next year. Any proposal by Republicans or Democrats other than a zero percent taxation is unacceptable.

Economically, the Death Tax is counterproductive. The Death Tax serves only one purpose: to supply the revenue that liberals desperately need to keep pace with their out-of-control spending habits. As a result of political greed, the Death Tax sucks job-creating capital from the private sector, forcing the children of many small business owners and farmers to pay a cumbersome tax bill in order to keep their businesses and farms in the family hands.

So long as these small businesses—which are responsible for 64 percent of all new jobs over the last 15 years—have to pay a 55 percent tax just to keep the family business running, their ability to create jobs is drastically stifled. Moreover, the Death Tax effectively serves to punish those who save and invest and encourages a pattern of reckless spending, thus depleting the economy of private capital and requiring more borrowing from the Chinese.

Politically, the Death Tax is opportunistic. As a political strategy, the Death Tax is a brilliant scheme because it imposes a penalty on the dead, who have no votes—except perhaps in Chicago. But in reality, the Death Tax doesn’t only affect the dead; it’s a tax on everybody. Eliminating the Death Tax altogether would free up more than $1.6 trillion for job creation in the private sector, an amount that former CBO Director Douglas Holtz-Eakin estimates would generate 1.5 million new jobs. These are jobs we desperately need for an economic recovery.

Morally, the Death Tax is reprehensible. To tax any person for divesting an asset at one rate the day before they die (15 percent Capital Gains), and more than triple that rate the day after they die (55 percent Death Tax in 2011), is making the federal government into a grave-robber. There is no reason why the company that a hard-working American created from scratch should be struck with a tax equal to more than half the company’s value at the moment of the owner’s death.

Socially, the Death Tax is disintegrative. Class warfare—fomenting the resentments of the poor against the rich, the employee against the manager, and the laborer against the shareholder—won’t get our economy back on track. The advocates of the Death Tax pit one group of Americans against the other in a strategy based on political division rather than principle. In the end, every American suffers.

Is it better for the American economy for Congress to reinstate the Death Tax—thus generating a meager $500 million in revenue, an amount equal to .014 percent of the 2010 federal budget? Or is it better to kill the Death Tax, thus giving American small businesses the ability and incentive to create 1.5 million new jobs?

Is it better for America to pit one group of Americans against another and punish people for no other reason than they started a successful business, created jobs, and prepared to leave that legacy to their family’s next generation?

  • libertyatstake

    Grandpa just called … he said he’s hanging on until 2011 no matter what.

    http://libertyatstake.blogspot.com/
    [For a light hearted take on our present peril]