Thread: Tax deal showers billions on heirs to the largest estates

Tax deal showers billions on heirs to the largest estates

Apart from winning the lottery or finding a Rembrandt at a rummage sale, there are basically three ways to get rich. One is to become very good at something — running a large company, say, or driving quarterbacks into the turf. Another is to shrewdly invest in some kind of hugely successful enterprise.

OPPOSING VIEW: 'Death tax' is unfair

A third is to be born into a wealthy family. This is the easiest. It requires no work, fosters no innovation, and does not involve taking risks or being brilliant.

Nevertheless, for many years, a small group of people in this third category has been waging a surprisingly effective campaign to convince Congress that government should tax skilled labor and investment returns at a higher rate than wealth acquired by birth. They've showered lawmakers with campaign contributions. They've run advertisements. They've come up with clever expressions, such as the "death tax," in an effort to kill the levy on large estates.

The situation reached the ultimate point of absurdity in 2010. The tax, formerly 45% on estates larger than $3.5 million for an individual or $7 million for a couple, disappeared entirely for this year. That provided a windfall for, among others, the heirs of George Steinbrenner, the billionaire owner of the New York Yankees who died in July.

For 2011, the compromise tax deal worked out between President Obama and congressional Republicans, and approved by the Senate on Wednesday, sets the estate tax at 35% after an exemption of the first $5 million for an individual and $10 million for a couple. That is the lowest level since Herbert Hoover was in the White House, angering House Democrats who want to restore the 45% rate with a $2 million/$4 million exemption.

However they proceed with the overall tax compromise, they're right to be miffed about the estate tax. At a time of soaring deficits, why dig an additional $62 billion hole from now through 2013, when the proposed deal would expire? At a time of increased wealth concentration, why add to the problem by making dynastic wealth so easy to sustain?

Of all the taxes collected, the estate tax is the least harmful. It does not punish people for their labor. It does not discourage innovation or risk-taking. And whatever revenue is not collected from it means higher taxes elsewhere, or greater government borrowing.

Opponents of the tax argue that it hits small businesses. Given the generous exemptions and the many ways families can reduce taxes through trusts, the opponents must have a pretty expansive definition of small. They also argue that people who pay taxes all their lives should not have to pay again at death.

They don't. Dead people don't pay taxes any more than they attend concerts or take showers. They are dead. When they lived, they were unaffected by the tax. When they died, they were made unaware of it.

It is their living heirs who feel the consequences of the tax. Therefore, they are the ones who, in essence, pay it. These fortunate sons and daughters — while maybe are not deserving of the scorn they sometimes receive — also don't deserve preferential treatment.

http://www.usatoday.com/news/opinion/ed ... 6_ST_N.htm

How about we end this argument by ending the income tax for all and make it up by cutting spending and increasing import taxes?

Originally Posted by Bowman

How about we end this argument by ending the income tax for all and make it up by cutting spending and increasing import taxes?

Gee that would be to easy don't ya think???? Cutting spending??? Import tax increase? We can also end the Fed!!!!


Kathyet

Originally Posted by Bowman

How about we end this argument by ending the income tax for all and make it up by cutting spending and increasing import taxes?

Yeah!!! I agree. That's what the FairTax does. It taxes all imports at the final point of sale at the retail level for new product and services at the same rate as domestic products and services, plus any additional tariffs that may be needed and charged at the time and point of entry.

www.fairtax.org

Originally Posted by kathyet

Originally Posted by Bowman

How about we end this argument by ending the income tax for all and make it up by cutting spending and increasing import taxes?

Gee that would be to easy don't ya think???? Cutting spending??? Import tax increase? We can also end the Fed!!!!


Kathyet

Yeah!!! I agree with all of the above plus passing the FairTax.

Originally Posted by Judy

Originally Posted by kathyet

Originally Posted by Bowman

How about we end this argument by ending the income tax for all and make it up by cutting spending and increasing import taxes?

Gee that would be to easy don't ya think???? Cutting spending??? Import tax increase? We can also end the Fed!!!!


Kathyet

Yeah!!! I agree with all of the above plus passing the FairTax.

That too!!!!!


Kathyet