Bank of America, for example, dedicates $2.3 billion to marketing in 2008 so it’s clear that they’ve got the budget to mount a $100 million series of scathing attacks on a Senator who pisses them off and basically laugh that off (and note that in 2004 total spending on Senate campaigns was just $400 million).
The Congressional Budget Office (CBO) has a report on Federal Estate and Gift Taxes. One of the interesting things is only 0.7% or 17,400 of estates are actually affected by the estate tax.
In 2000, before EGTRRA was enacted, 51,200 estates were taxable, representing 2.2 percent of adult deaths in that year. EGTRRA reduced the percentage of estates that were taxable. For example, 17,400 taxable estate tax returns were filed in 2007; most were for deaths in 2006, when the effective exemption amount was $2 million, representing about 0.7 percent of adult deaths in that year.
Another concern is how the estate tax affects family farms and small businesses. The report says about 1,100 farms are affected. In 2000, when the exemption was only $675,000 vs the $4 million today, only 138 of farmer’s estates didn’t have enough liquid assets (cash) to pay the estate tax. Liquid assets include trusts which could be used to pay the taxes. Additionally, there are many provisions such as 15 year, low interest rates loans to help minimize the burden.
The top five executives at Bear Stearns and the top five at Lehman made $2.4 billion from 2000-2008. The popular imagining was they suffered financially with the collapse of their firms. The reality is they’d already cashed in huge amounts of stock before the collapse.
From Barry Ritholtz:
So if you lost your firm billions of dollars, laid off tens of thousands and indirectly caused millions to lose their jobs and drove the unemployment rate to 10.3% well, the good news is it didn’t cost you your job! 92% of management in TARP funds recipients still have their jobs!
From A Fair Deal for Taxpayer Investments:
The executive leadership of the financial sector remain largely unchanged—92 percent of the management and directors of the top 17 recipients of TARP funds are still in office.