Sen. Chuck Grassley is not backing away from his comment about raising the cap on the estate tax and using the federal tax system to encourage savings.
“Death should not be an incident of taxation,” the Iowa Republican said Wednesday, calling that a matter of principle.
Grassley ignited a firestorm of satire and derision with comments he made to reporters last week explaining his position that the estate tax — or death tax, as he sometimes calls it — is a form of double taxation that doesn’t recognize the value of risk-taking, saving and investment.
“I think not having the estate tax recognizes the people that are investing,” Grassley said in that weekly conference call. “As opposed to those that are just spending every darn penny they have, whether it’s on booze or women or movies.”
His comments have been lampooned by opinion writers and late night television hosts and prompted his detractors to leave empty liquor bottles outside his Iowa offices and design T-shirts apologizing for the senator Iowans have elected seven times.
Grassley said again Wednesday that his comments were taken out of context.
“I put out a statement, (and) I think I’ll stand by my statement of correction,” Grassley said.
In that statement, Grassley said “the government shouldn’t seize the fruits of someone’s lifetime of labor after they die.”
“The question is one of basic fairness and working to create a tax code that doesn’t penalize frugality, saving and investment,” the statement continued. “That’s as true for family farmers who have to break up their operations to pay the IRS following the death of a loved one as it is for parents saving for their children’s college education or working families investing and saving for their retirement.”
Grassley estimated the estate tax is levied on about 2 percent to 3 percent of estates, those passing on assets of more than $5.5 million for individuals and $11 million for married couples. The current tax on estates is 40 percent of an individual’s wealth at death.
Last week, the Senate approved raising that to $11 million per individual and $22 million per couple. The House tax reform plan would end the estate tax in 2024.
Grassley’s position is that income ought to be taxed just once.
“Think of the farmland bought for $1,000 and now it’s worth $10,000 an acre,” he said. “You don’t plan on selling it because you want the kid to farm it and the next grandkid to farm it.”
The estate tax, he said, doesn’t recognize the value of people who create businesses and jobs, who build something to leave to their families, who invest in their communities.
“Not having the estate tax recognizes the people who are investing,” he said.