Out of all of Donald Trump's proposals, repealing the estate tax is the one that will least reach his core supporters.
It is increasingly recognized that many of the policies proposed thus far by president-elect Trump don't help (high-end tax cuts) or actively hurt (repealing Obamacare) many of his blue-collar supporters.
A particularly germane example of this phenomenon came up this morning on "Squawk Box," when Grover Norquist and I had a robust debate about the Republican's long-held plan to repeal the estate tax, a plan that could well come to fruition in a Trump administration (I'm against repeal; Grover's for it).
The estate tax applies to only 2 out of every 1,000 estates, or 0.2 percent, yet the tax is still expected to raise about $275 billion over the next 10 years.
How does a tax that hits so few raise such substantial revenue? It's not because the rate is particularly high. While the top rate is 40 percent, the average rate on the estate tax is less than 17 percent. A big part of that difference stems from the exemption of about $5.5 million for individuals and twice that for couples. So, on a $7 million estate, only $1.5 million of that would be subject to estate tax.
In other words, you've gotta have some serious wealth to face the estate tax. The Tax Policy Center estimated that only about 20 (that's "20" the number, not percent) small businesses and "small farm estates owed any estate tax in 2013." If Trump's telling the truth about his billions in assets, the repeal would be a huge boon to his decedents. But the vast majority of taxpayers wouldn't see a dime.
I raise this all simply to point out that of all the policies that Trump has proposed thus far, the one that surely does the least for a core group of his supporters — those left behind by globalization, those hurt by rising inequality, trade deficits, and the erosion of middle-class opportunities — is the repeal of the estate tax.
We can have a lot of good arguments about whether this tax should exist or not. But as long as we're in the realm of facts, we can't argue that its repeal helps anyone who's not already very wealthy.