Are you ready for your first tax increase of the People’s Glorious Democratic Paradise?
President-elect Barack Obama and congressional leaders plan to move soon to block the estate tax from disappearing in 2010, suggesting the levy might outlive the “Death Tax Repeal” movement that has tried mightily to kill it.
The Democratic stance on the estate tax contrasts with Mr. Obama’s reluctance to press forward with his campaign pledge to raise income-tax rates on top earners, which he worries could have an adverse economic impact during a recession.
In fairness to the Democrats, this isn’t the most egregious tax they could levy on Americans. After all, avoiding it is pretty easy. If you’ve been really successful and have amassed some wealth, all you have to do is live forever. If you don’t die, they can’t grab a big chunk of the stuff you want to leave to your children, friends, favorite charities, or whomever. If you aren’t successful enough to have the sort of wealth that turns Democrats into well-dressed muggers, you have the easiest way out of all. Just don’t become successful. Work just hard enough to keep your income within government-approved parameters and you won’t have to worry about Nancy Pelosi, Harry Reid, and Barack Obama (all of whom are millionaires, by the way) vulturing your years of work to feed the gaping maw of government.
Don’t let the income exemption numbers fool you. This isn’t merely a “tax on the rich”. Plenty of people bust their humps to build up a very healthy retirement portfolio. Lots of small business owners work ridiculously long hours for the kind of financial nest that will let them quit working those hours and enjoy the fruits of their labor. These days, having a few million dollars in the bank is not exactly rare. There are about 3 million millionaires in the United States and only a very few of them wear monocoles and top hats or go swimming in their own money bins.
Beyond the practical effect the death tax has on discouraging success, there is a moral component. It is wrong to tax someone’s estate when they die. That money has already been taxed at least once. The government has had its bite; it should not get a second, bigger one. I understand that the death tax is a hard tax to fight. It’s easy for Democrats to treat the rich like they were barely human beings deserving of the same right to a peaceful and happy life like the rest of us. But that money belongs to them not to the government and certainly not to a bunch of Democratic wastrels who use our money to buy their way into more power and more wealth for themselves.
The reality is, the death tax is a birth tax that hangs over you your entire life and it’s not about money but control. The death tax says that the government owns you from the second you are born until you die. You have no real control over what you earn because the government will be there at the end to tell you just how much it will allow you to give to others.
That is what conservatives want to end and Democrats are trying to preserve.
Tags: Class Warfare, Democrats, President Barack Obama, Taxes
“That money has already been taxed at least once.”
Wrong. I hold stocks that have been transferred several times through death and have never been taxed. The reason for the estate tax is to recapture capital gains that get eliminated when a person dies. When you inherit a stock, you inherit it at the basis of the date of death, not the date of purchase. My Exxon-Mobile stock as actually Standard Oil stock granted in the 1920’s. If I had to accept the basis when it was granted, I’d pretty much have to pay capital gains on the entire price of the stock, not the gains I’ve seen since holding it. Instead, all of the value that Standard Oil/Esso/Exxon/Exxon-Mobil gained in the last eighty years was simply wiped away by my mother’s death. Think that company might have made some gains in the last eighty years? And nobody ever had to pay taxes on those gains. And nobody paid any estate tax on it, either. Any estate worth less than $100 million can easily be made to look like it’s worth less than $1 million. It’s pretty amazing what foreign bank accounts and gold holdings can do. The key is not having a big house, because you can’t hide that. Any estate worth over $100 million can simply be wrapped into a corporation to avoid the estate tax. And even if you do screw up and face the estate tax, you have 14 years to pay it with no penalties. Conservatives like to rename the estate tax as the “Death Tax”, but they are wrong. It’s really the Stupidity Tax. If your accountant is stupid enough to let you pay it, than you need a better accountant.
You obviously don’t have enough money to even talk about this. So why are you so worried about it? Plan on wining the lottery?
Obviously you didn’t read my whole post. Your question is answered by the entire second half of what I wrote.
And yes, that money does get taxed. The death tax is not the first time those stocks are taxed.
Ooh, no, gotta disagree with you there. Here’s an easy counterexample for you: Imagine your parent inherited $5,000,000, and chose to keep it in a checking account for fifty years. Basically, that’s like stuffing cash in the mattress, but with a bank involved. At the end of that time, your parent dies, having earned $0 in capital gains–but owing over $1,000,000 in estate tax.
If the purpose of estate tax were to recapture capital gains, then that’s what would be taxed. Instead, the tax is based on every asset the decedent owned, regardless of how much or how little it had been taxed before.