In a move that really tells you who runs Washington, Senate Democrats backed down on a portion of their tax package, one that they already know won’t pass into law after it comes up for a vote next week. Despite this, instead of putting forward a tax package that conforms with what they presume to project as their values, they decided to swap out the estate tax portion, because they couldn’t get enough of their own members to agree to the plan with it in there:

Senate Democratic leaders are eliminating a provision to tax wealthy estates in order to shore up support within their ranks for President Barack Obama’s election-year tax plan, senators and aides said Thursday.

Since there was no consensus in the Senate Democratic Caucus over the levels to tax estates transferred after a person’s death, Senate Majority Leader Harry Reid told senators Thursday he’d drop that provision. The move could limit defections in his caucus and put the focus on this season’s central campaign fight: Whether to extend Bush-era tax rates at 35 percent for the top 2 percent of earners or let them increase to the 39.6 percent level.

The bill would now cost $250 billion, down from the $272 billion, one-year cost of the original proposal, aides said.

“The majority leader wanted to focus on the middle-class tax relief,” Sen. Dick Durbin (D-Ill.) told reporters.

The key number for Senate Democrats is not 60 but 51. On a message vote, they wanted to be sure they got enough Senators on board for a simple majority, even though the bill will go down to defeat anyway. Joe Lieberman and Jim Webb have already come out against the plan, leaving the 53-member caucus with no wiggle room.

The bill would have reverted the estate tax back to 45%, on every dollar of an estate above $3.5 million. Current law sets the estate tax at 35%, with a $5.12 million exemption.

Amusingly, the near-term result of dropping the estate tax change is that the tax would revert back to the Clinton-era rate of 55% with only a $1 million exemption. This is why the bill costs $22 billion less; estate beneficiaries would pay that much more under the Clinton-era rates for 2013. But in reality, some Democrats must have not wanted to show any willingness to change the estate tax from its current generous rates for multi-millionaires.

The Republican tax plan remains far worse for ordinary Americans. In addition to extending the Bush tax cuts above $250,000, the GOP plan would let the child tax credit and the expanded Earned Income Tax Credit expire, at a cost of $11 billion in 2013. So the GOP tax plan really does redistribute wealth upward, while the Democratic plan redistributes it downward.

But this is on the margins. Democrats and Republicans agree on the income tax rate for 98% of Americans. And Democrats are so spooked by taxing inheritances that they dropped a plan to make the Paris Hiltons of the world pay a little bit more, furthering the new American aristocracy.