quote:Originally posted by Raymond Arnold: How is one tax "clearly defined" and the other tax not? They both exist because the government has programs it needs to pay for and it needs money to pay for them. The rationale is exactly the same.
If you want lower taxes, tell the government which programs to cut.
I think the point is that there's better and worse ways to implement taxes. If we agree that, say 2 trillion is going to the government this and we need to collect that in taxes (because we finally got our head out of our ... ummm ... butts and decided to balance the budget) that doesn't mean that anyway we get that 2 trillion is the same as any other. Collecting taxes does more than just funnel money into government programs. It strikes me there are three main reasons people have addressed here for determining tax law. The one you're most concerned with is making sure there's enough money for the government to function. Obviously an essential component. However, there's also the consideration of "fairness" or proportionality that Orincoro was talking about. That we implement taxes to try to accurately represent the use of the taxes. In this case that income is the result of living in a free and protected society (etc... etc...) and thus it gets taxed. Gas goes along with driving on the roads so there's a tax there and so on. The third consideration being most efficient means of extracting money in terms of the impact on the economy.
We all agree the government needs to money to run, but the fact that a tax is fulfilling that purpose doesn't make it a good tax by definition. What if we just picked a percentage of the population and decided that we'd use all their money to pay for programs and leave everyone else untouched? It fulfills the first requirement of paying for the government programs yet we all agree it's ludicrous. And of course that's because it doesn't meet the second requirement of fair (or the third for that matter). I can see how you can think the estate tax is fair, but arguing that "we need to get the money somehow and this way gets money" isn't really a complete argument for the estate tax.
posted
Except part of my point was that A) I consider an Estate tax to be MORE fair than an income tax, B) I think preventing generational accumulation of wealth is a necessary goal by itself.
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quote:Originally posted by Raymond Arnold: How is one tax "clearly defined" and the other tax not? They both exist because the government has programs it needs to pay for and it needs money to pay for them. The rationale is exactly the same.
It is not "exactly" the same. They are different types of taxes. They are taxes on different kinds of money. If they have "exactly the same" kind of rationale behind them, then there is indeed something wrong. Taxes are not a cookie jar or a biggie bank- different taxes have different uses and different purposes. Those purposes and uses should be clear.
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quote:Originally posted by Raymond Arnold: Except part of my point was that A) I consider an Estate tax to be MORE fair than an income tax, B) I think preventing generational accumulation of wealth is a necessary goal by itself.
quote:Except part of my point was that A) I consider an Estate tax to be MORE fair than an income tax, B) I think preventing generational accumulation of wealth is a necessary goal by itself.
I guess I just didn't get that from your posts, my apologies. I read it as: we need a tax, I guess I could come up with some rational if you wanted but mostly this is a tax and the government needs money so this tax is justified by that alone. Misunderstanding then.
I have to admit I side with those who find the estate tax to be "unfair" (whatever that means), but I'm not that interested in it as compared to other economic needs. I was close friends with a family which it ended up destroying so that doesn't really make me partial in its favor but I recognize that's anecdotal and not proof of anything.
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Yeah, but it's relevant. The facts are that a climbing marginal tax rate is not an adverse penalty on wealth. You make more, you pay a higher percentage of it in your taxes on a rising scale- as fair as such a thing can possibly be to both the poor and the rich. But penalizing the accumulation of wealth through inheritance has consequences outside of this, and those are not fair consequences- especially when considering that we are not just talking about cash, but other things such as possessions, property, etc. Suppose my parents had bought and maintained a number of paintings which increased in value exponentially until they died? What am I supposed to do if that collection, which is a possession of my family, is subject to an inheritance tax? I'm supposed to give them away, to sell them because I need to pay the government? They're mine. They don't belong to anyone else. It gets worse if it's a single property, like a family home. That kind of tax can be destructive.
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quote: I was close friends with a family which it ended up destroying so that doesn't really make me partial in its favor but I recognize that's anecdotal and not proof of anything.
Can you elaborate on that at all? Right now my position is based on a theoretically model revolving around "I'd rather have money taken from me after I die than while I'm still alive."
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quote:Originally posted by Raymond Arnold: [QUOTE] Right now my position is based on a theoretically model revolving around "I'd rather have money taken from me after I die than while I'm still alive."
That is not a helpful model because it doesn't fit the current reality, nor is it the one anyone else is working from here. Perhaps this is why we are in disagreement. There are also logistical concerns which complicate that view much more than you have allowed in your argument.
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quote:Originally posted by Raymond Arnold: Starting your life off with millions of dollars that you didn't earn is not beneficial, either to your personal happiness or to the world in general. It lets the wealthy get wealthier and stay wealthier, accumulating increasingly disproportionate power over society. People like to IMAGINE themselves being part of the wealthy side, and they associate the extreme wealth end of the spectrum as the epitome of the American dream, but that comes at the expense of hundreds of other people not achieving theirs.
And who are you (or the government) to decide who is worthy of money or not? If the people are irresponsible with the money, then they will waste it, which will benefit the economy. If they are responsible and they grow their wealth, well then they may be able to hire people, which benefits the economy as well.
I don't understand the mentality of demonizing the rich. I'm sure some of them are shady and got their money in less than honest ways, but most of them worked hard for it.
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"Democrats at least pretend to have a spine, it's a Christmas miracle! "
I think they are just trying to prevent themselves from being taxed on their million dollar estates and such.
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quote: I was close friends with a family which it ended up destroying so that doesn't really make me partial in its favor but I recognize that's anecdotal and not proof of anything.
Can you elaborate on that at all? Right now my position is based on a theoretically model revolving around "I'd rather have money taken from me after I die than while I'm still alive."
I knew a couple, they were in their late 60s I think, maybe early 70s (but still very active) where the wife's father died. She had grown up on, and her father still owned, a very large ranch in NM. The plan had been to pass it down to her brother who was the only sibling that stayed on the ranch (which was fine with everyone else apparently). However he killed himself shortly before his Father's death so whatever they had had in place did not work out and the ranch transfered to the widow. The ET took every penny of the savings they had collected over the decades they had worked the ranch but they managed not to have to sell it. However the widow wasn't in great health and they knew that she'd go soon too and there was no more cash to payoff the ET when that happened. So they attempted to put it in a trust but the bickering and fighting that caused (working out the details) destroyed most of the relationships between the siblings and did not end up in a trust. Then the daughter that I knew moved down there to help out on the project which ended up putting enough stress on the marriage of 50 years that they divorced. I don't know what ended up happening with the ranch, I think they were beginning to go down the road of defeat and decide to just sell the land when it passed again, but the whole thing left a pretty bad taste in my mouth as an observer.
quote:Originally posted by Geraine: I don't understand the mentality of demonizing the rich.... most of them worked hard for it.
I'm not sure that anyone here is demonizing the rich. In any case, this argument would work better for me if wealth were more strongly correlated with working hard.
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quote:Originally posted by Geraine: I don't understand the mentality of demonizing the rich.... most of them worked hard for it.
I'm not sure that anyone here is demonizing the rich. In any case, this argument would work better for me if wealth were more strongly correlated with working hard.
Not all rich people work hard for it, in fact some rich people don't have to work at all, consider Rockefellers (quite possibly the worst rich people I could even think of) none of them have to work at all because all of them are just sitting on John Rockefellers original fortune... Basically all of them work their whole lives solely to do what they want.
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quote:Originally posted by Hobbes: ... In this case that income is the result of living in a free and protected society (etc... etc...) and thus it gets taxed.
*shrug* Of course it can be pointed out that if you say that income is a result of living in a free and protected society, that is just as true, if not more for wealth.
There are two contrasting ideas here:
quote:Originally posted by Geraine: ... I'm sure some of them are shady and got their money in less than honest ways, but most of them worked hard for it.
quote:Originally posted by Orincoro: ... Suppose my parents had bought and maintained a number of paintings which increased in value exponentially until they died?
The view that seems more correct is that the majority of wealth accumulation when it comes to the very rich isn't through working hard for earned income but from unearned income such as in the latter scenario (capital gains on investments in general).
Knowing this actually actually has consequences because in a system where there is no inheritance tax (such as in Canada), we just treat it as a transfer of wealth which counts as realizing capital gains, which can result in having to pay capital gains tax anyway.
So I'm not particularly excited about this one way or another.
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Here is a great lesson in how political groups have taken control of the debate by taking control of the terms. Welcome to the Info-Wars.
What is the "Estate Tax"?
Its a tax on generational transfer of funds.
Who is taxed? Not the person who generated the money. That person is dead. It is the person who receives the money who is taxed.
But powers who don't want this tax have fought hard to phrase the argument into one about the rights of the wealth creator to use that wealth as they wish. It became a Tax of the Dead Person. If I make $10,000,000 I should have the right to give it all to whoever I please, not have to give any of it the government.
In reality, I don't think there is a religion or philosophy in existence that says a dead person should or could be thinking about their earthly wealth after they die.
The tax is on the recipient of the wealth. If someone were to leave me $10,000,000 I'd be happy. The question is, what did I do to deserve that $10,000,000? Since the majority of such inheritances are from parents to children--all I had to do was be born.
I did not work hard for that money.
I did not earn it.
Now, some folks do work hard for their inheritance. Some folk work hard with their inherited money.
Some folks don't.
So what is the problem with inherited money? Money can be used to attract money. It is a tool that can be used to make even more money. If I am left $10,000,000 and hire people who can invest it well for me, then when I die I may have Hundreds of Millions, or perhaps billions. And by the third generation, Billions and maybe Trillions. And by the fourth generation--well-- a majority of the wealth in the country end up in the hands of fewer and fewer people.
Sure, some will waste it. Some will toss it away. But it would be hard to toss away $100,000,000.
And mean while, others working hard and helping society have less and less wealth that they can earn, and see less and less reason to work hard. Why should I work hard for company X when the daughter of the company X never did anything more strenuous than call her maid. Last month she inherited more money than me and all the rest of us on my shift will ever earn working 60 hours a week for the next 40 years?
Are there problems with ET? Sure. There are questions about small businesses and farms that may over pass the base limits and folks will "lose the farm." But these problems can be fixed without throwing the whole ET out.
But its these small businesses and farms that those against the ET parade out.
Its a brilliant move, not as obvious as labeling it a "Death Tax", but more powerful. Poor rich guys getting their hard earned wealth taxed after they are dead and can't defend themselves. Makes me almost want to cry for them.
Instead of poor working class who see wealthy folks earning their wealth the old fashioned way. They inherit it free and clear.
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quote:Originally posted by Raymond Arnold: How is one tax "clearly defined" and the other tax not? They both exist because the government has programs it needs to pay for and it needs money to pay for them. The rationale is exactly the same.
It is not "exactly" the same. They are different types of taxes. They are taxes on different kinds of money. If they have "exactly the same" kind of rationale behind them, then there is indeed something wrong. Taxes are not a cookie jar or a biggie bank- different taxes have different uses and different purposes. Those purposes and uses should be clear.
Maybe you've addressed this, and if so I apologize, but what is the purpose of income tax? Or sales tax? Or property tax?
It seems to me that requiring that each and every type of tax be paired with some corresponding benefit related to that tax (as with gas taxes/road maintenance) would be unworkably complicated.
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quote:And who are you (or the government) to decide who is worthy of money or not? If the people are irresponsible with the money, then they will waste it, which will benefit the economy. If they are responsible and they grow their wealth, well then they may be able to hire people, which benefits the economy as well.
Well, obviously no one or at least many fewer people would get rich if civilization didn't exist in order to provide the infrastructure to make it possible. That's just a given, for all that some folks on the fringe like to argue otherwise. Therefore government, both as a practical and as a moral matter have some basis for determining who is 'worthy' of money, Geraine. Again, the problem becomes deciding just when they get to make that determination and how much they determine. There's tons of room for discussion on those points, but in my opinion there's none at all on the notion of whether or not government has a stake in that one at all.
Anyway, next point: if people are irresponsible with their money, they'll waste it, which will benefit the economy. Well, no. It will benefit someone is the only certainty. If some trust fund baby turns up their trust and goes crazy spending it and throws money out like tic tacs, well, sure, the economy at large will likely benefit, but that's not always what happens. Sometimes what happens is that they're irresponsible and only very few people benefit, and those few people spend elsewhere, for example. I'm not saying that's always what happens, but again you're using a conservative talking point as a given when it really isn't.
Next point, if they're responsible they may grow their wealth and hire more people. Again, if they're responsible, they may grow their wealth, and that wealth will (if they're responsible) ultimately be invested somewhere and be used to hire someone, but where? It's certainly by no means a given that it will be done here. So whose economy is benefited? Your rhetoric is geared towards the point that if you largely leave the wealthy alone to accrue more wealth, that will benefit the domestic economy, but the fact is it just isn't true. What is true is that if you largely leave the wealthy alone to accrue more wealth, what'll mostly happen is that they'll be able to accrue more wealth...and sometimes, incidentally, our economy will be benefited.
quote:I don't understand the mentality of demonizing the rich. I'm sure some of them are shady and got their money in less than honest ways, but most of them worked hard for it.
What's that got to do with the estate tax? In fact, this statement would seem to support the estate tax.
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quote:Originally posted by Geraine: And who are you (or the government) to decide who is worthy of money or not?
All governments in the entire world can and will do this to a pretty reliable extent. There's already plenty of arguments that are fairly persuasive to all but those of a hyperlibertarian/anarcho-capitalist bent.
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I pointed this out before but since it seems everyone missed it I'm going to say it again. The majority of wealth that gets hit with an estate tax has never been taxed and never will be if the estate tax is removed. This is not evident to most people because for ordinary folks most of what we own is stuff we worked hard for an paid for with out of an income that was taxed as we earned it.
But look at someone like Bill Gates. Bill Gates didn't get his multibillion dollar fortune one pay check at a time. The overwhelming majority of that fortune is in Microsoft Stock, whose value has increase thousands of times since he started the company. Since appreciation on stocks isn't taxed until the stocks are sold, Bill Gates hasn't paid any taxes on those billions of dollars. If the estate tax were completely eliminated, he could leave all of those billions to his son having never paid a dime of taxes on the money.
The estate tax is an essential companion to the laws that exempt us from paying taxes on appreciating assets until they are sold. Would you prefer to pay income tax each year on the appreciation of your home and mutual funds or wait until you sell them? If you die before you sell them, why should you pay less in tax than the person who sold them before they died?
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Perhaps I'm missing something, but aren't those assets taxed when they are sold by your heirs or your estate?
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MattP, No, at least not as I understand it. If you sell a property or stocks you inherited, you will only pay capital gains taxes on the sale value minus its fair market value at the time you inherited the property.
[ December 10, 2010, 05:59 PM: Message edited by: The Rabbit ]
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I don't know how the estate tax was structured historically, but it seems to me that you could have separate taxes that apply to different inherited assets differently.
As it is, there is an exemption in the capital gains tax for a home that you sell which has gained value. You could just as easily make an exemption for family items, such as collectibles like the paintings previously mentioned, or a classic car that has gained value, or the family home or family farm below a certain value, but still tax financial assets for their full value. Or you could just call inherited financial assets "income."
From what I can tell, at this point, Rabbit's point about Bill Gates is true. If he were to die right now (with the Estate Tax suspended) his heirs could receive all his financial assets absolutely tax free. I think Gates has other arrangements, however, so maybe he's not the best example. But I don't think George Steinbrenner left any of his estate to pay down the national debt.
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it'll sure be nice when the republicans succeed against the estate tax and I get to be mr. moneybags for doing absolutely dick-all but just be born into the right family.
anyway, i'm watching sanders filibuster all day. it's depressing hearing him talk about the chinese infrastructural plan versus our own because he's right. I can't wait till we're sitting on top of crusty has-been economic framework and wondering why we're still leaking power to a country smart enough to lay down high speed rail everywhere.
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quote:Originally posted by The Rabbit: MattP, No, at least not as I understand it. If you sell a property or stocks you inherited, you will only pay capital gains taxes on the sale value minus its fair market value at the time you inherited the property.
As I said, I don't think this is true. An estate tax resets the cost base when you pay estate tax to avoid *real* double taxation. Repeal the estate tax and the cost base will simply be inherited and you pay the full capital gains tax at sale.
American example:
quote:A sole heir who sells inherited assets valued at more than $1.3 million must account for their original cost. So if Grandpa bequeaths 100 shares of Google Inc. he bought in 2004’s initial public offering at $85 a share to a granddaughter and those shares were worth $600 each in January when he died, the granddaughter would pay a 15 percent capital-gains tax on $51,500 if she sells the stock, or $7,725.
Last year, the granddaughter might have paid nothing because the old estate-tax law effectively reset the securities’ worth to fair market value on the day they were inherited.
quote:Originally posted by The Rabbit: Since appreciation on stocks isn't taxed until the stocks are sold, Bill Gates hasn't paid any taxes on those billions of dollars.
We would be having this discussion a few months before I get my tax statements.
I'm pretty sure my mutual fund end of year tax form comes with a capital gains box that I plug into Turbo Tax. So that's only the money that I owe from rebalancing my portfolio? The rest of the appreciation isn't in there?
So why do I need a 401k? The whole point is that my money grows tax free. Why do I need a special account if I can just not rebalance my regular investment?
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AR, Mutual funds are not individual stocks. They are a changing group of stocks, bonds, and other investments. Capital gains come in when an investment is sold. If you get capital gains on your mutual fund, that means that it sold some of what it was holding during the past year and made a net gain from all it's selling transactions.
If you buy a stock, you pay no capital gains on it until you sell it. So, yes, Bill Gates doesn't pay any taxes on his Microsoft stock. But, if he wants to use that wealth for anything other than what you can do with stock, he'd have to sell it and thus would pay a 15% tax on the gains on it.
401k's are ways to package investment vehicles like mutual funds for a specific purpose (i.e. providing for retirement) that has been judged important to support and encourage, so you don't pay for the capital gains incurred by the things grouped into the 401k.
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quote:Originally posted by The Rabbit: If the estate tax were completely eliminated, he could leave all of those billions to his son having never paid a dime of taxes on the money.
Your analogy doesn't work for a number of reasons, the biggest being that estate tax is *not a proxy for gains tax in the event of death. Estate tax is based on the entire value of the estate, not just the gains.
As for the earlier debate on having a more clearly defined "reason" for the estate tax, it's really a non starter. The reason, clearly, is to redistribute wealth back into the citizenry via government programs. The programs can be debated but the motive/reason behind estate tax is indisputable.
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quote: As for the earlier debate on having a more clearly defined "reason" for the estate tax, it's really a non starter. The reason, clearly, is to redistribute wealth back into the citizenry via government programs. The programs can be debated but the motive/reason behind estate tax is indisputable.
Well, no, it's not so clear as that. It's not like taxes go straight from the wealthy to the rest of the population via the estate tax and that's it. They also go to programs that benefit everyone, such as infrastructure, military, emergency services, etc.
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I don't know that I'd call it redistributing wealth - the person who had the wealth before is dead, but I completely agree that one of the major reasons for the estate tax is to prevent the massive generational accumulation of wealth that would likely result otherwise.
This accumulation would be a direct threat to the middle class that is the backbone of modern liberal democracy. I think the estate tax is also justified as a special case of taxes on wealth transfer, but that's a secondary justification.
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I think we need to focus on infrastructure, both physical and intellectual, but I think high speed rail just isn't going to happen.
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quote:Originally posted by Rakeesh: Well, no, it's not so clear as that. It's not like taxes go straight from the wealthy to the rest of the population via the estate tax and that's it. They also go to programs that benefit everyone, such as infrastructure, military, emergency services, etc. [/QB]
Its exactly that clear. I didn't mention anything about which programs or who benefits, merely that the money is redistributed via government programs, which you echo above.
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quote:Originally posted by MrSquicky: I don't know that I'd call it redistributing wealth - the person who had the wealth before is dead, but I completely agree that one of the major reasons for the estate tax is to prevent the massive generational accumulation of wealth that would likely result otherwise.
This accumulation would be a direct threat to the middle class that is the backbone of modern liberal democracy. I think the estate tax is also justified as a special case of taxes on wealth transfer, but that's a secondary justification.
There's not a lot of semantic parsing needed; the government takes the wealth accumulated by one individual (in this case,deceased) and redistributes it to others. As I said, you can argue about the how and why, but not the fact itself.
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By that definition, anything that happens to someone's estate - other then it being destroyed or otherwise made not usable by anyone else - would be wealth redistribution. That's fine if you're clear that's what you are talking about, but I don't believe that this is the common usage of the term.
Rakeesh's point is also important here. In general, wealth redistribution involves money going from one person to other people. When the government takes money and uses it for things like infrastructure or supporting things that the whole society benefits from, this doesn't fit into the general usage of wealth redistribution. It's fine if you are clear, but without specifying this, I think you run the risk of people thinking you're talking about something other than you are.
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Wealth redistribution definitely does include things like spending money on services (such as infrastructure) to help the general populace, and taking it disproportionately from the wealthiest.
The sorts of things you seem to be talking about, MrSquicky, are wealth transfers.
And yeah, high speed rail is almost entirely a boondoggle here (and a lot of the high speed rail lines in China might be boondoggles, too). Though, since our 'high speed rail' isn't going to be terribly high speed, it might just turn out to be a back door way into getting some basic train routes set up (though I'd prefer seeing more local trains in major cities).
quote:As for the earlier debate on having a more clearly defined "reason" for the estate tax, it's really a non starter. The reason, clearly, is to redistribute wealth back into the citizenry via government programs. The programs can be debated but the motive/reason behind estate tax is indisputable.
It is quite disputable. Most of the wealth that would be taxed by the estate tax is not taxed, and a large chunk of that is because of the existence of the estate tax: the holders of the wealth donate it to charitable purposes, instead (and far more than would if there were no estate tax). That's the biggest part of the estate tax's purpose.
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quote:Originally posted by Darth_Mauve: So what is the problem with inherited money? Money can be used to attract money. It is a tool that can be used to make even more money. If I am left $10,000,000 and hire people who can invest it well for me, then when I die I may have Hundreds of Millions, or perhaps billions. And by the third generation, Billions and maybe Trillions. And by the fourth generation--well-- a majority of the wealth in the country end up in the hands of fewer and fewer people.
The problem with this idea is you ignore the fact that by investing that money you are making things better, and making other people wealthier, as a result. The concept of wealth as a finite commodity that gets passed around form person to person, and could theoretically all end up getting transfered to one guy, is flawed. Wealth is infinite.
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You're arguing it's justification, which is disputable. I was referring to it's ultimate purpose, (maybe poorly worded on my part) which is not.
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Estate taxes would really hurt small businesses under ten million dollars (which is most of the job producers in this country), including family farms. All their equipment, facilities, and land are taxed in estate taxes. If the taxes go as high as 50%, or even just 35%, most businesses would have to sell off their equipment, lay off their workers, and close when the original owner dies. Family farms would have to sell some of their land, and maybe their animals, tractors, combines, hay balers, etc., to pay their tax bill. As usual the class-warfare demagogues of the fanatical left have failed to think things through, and failed to appreciate the wide-reaching and immense harm their policies would do to the country.
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First, I'm not sure how the estate tax is levied if we're talking about only one person dying in a marriage. If something is a marital asset, how can it be taxed? That's confusing to me, partially because I KNOW that no "estate tax" was paid when my grandmother died. Maybe we just evaded taxes???
Anyway, my grandfather died just a little over a year after that. He owned a family farm (actually two separate plots of land), a rental home, and 1/5 of a small business. He also had a few hundred thousand in investments, annuities, etc. The estate tax didn't cause my family any particularly undo hardship, but maybe that is because everyone prepared for it ahead of time.
It seems like the same could be done for most small businesses/family farms that are valued above the limit. For instance, couldn't you take out a mortgage on the property and use that to pay the tax? If the property itself is really worth so much to the family, then that seems like a reasonable way of paying the tax without destroying the property.
I honestly don't see why having assets tied up in real property should exempt those assets from the tax. I don't really understand how generational transfer of extreme wealth does the country much good. I'm not against putting a minimum value on estates that are taxed (even as high as $10mil and possibly with increases tied to the CPI), but getting rid of it altogether seems foolhardy.
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quote:ONE OF THE chief arguments of those seeking permanent repeal of the estate tax is that it cruelly penalizes farmers and owners of small businesses whose heirs are forced to sell off their holdings to pay the tax. "In order to make sure our farms stay within our farming families, we need to get rid of the death tax once and for all," President Bush proclaimed in a speech last month to the Future Farmers of America.
This assertion, though, is more convenient myth than fact -- something that senators might consider when they're called on, perhaps as soon as this week, to vote on abolishing the tax. A new study by the Congressional Budget Office examined estate tax returns filed by farmers and owners of small businesses in 1999 and 2000. The numbers that owed estate tax, the CBO found, were paltry, and the number without enough cash on hand to pay the bill even punier: In 2000, for example, just 1,659 farm estates had taxes due, of which 138 didn't report enough liquid assets to cover their tax liability.
But at that time the amount of money that could be passed on to heirs free of taxes was just half what it is now. With the current exemption level of $1.5 million, the CBO analysis found, only 300 farm estates in 2000 would have owed any tax at all -- and of those, just 27 would have a tax bill in excess of their liquid assets. At the even more generous exemption scheduled to take effect in 2009, $3.5 million, the ranks of those potentially hit hard by the tax would have dwindled even further; 65 farm estates would owe taxes and 13 would not have enough cash to cover the bill.
posted
Most small businesses and family farms have been able to deal with estate taxes upon the death of the founder/original owner, because the rates have been lower and exemptions have been allowed, and those who could have spread the ownership to other family members. But raise the estate tax rate to 50%, as some democrats are advocating, and do away with the exemptions, as those who hate the "wealthy" would prefer to do, and the result would not just be a massive theft from the wealthy of the assets they have accummulated through a lifetime of work, it would swell the ranks of the unemployed. Anyone who would deny this is just being deliberately obtuse. The rest of the nation cannot afford to see them learn their lesson the hard way yet again. (And in the past, their leftist dogma has blinded them from learning the lessons they should have learned, no matter how many people they hurt.)
Lest the ignorant leftist mental dwarves in the typical mainstream media seem intelligent to anyone, it should be noted that almost all businesses leverage their cash flow continually using just about all the credit they can manage. Mortgaging the company, the factory, the equipment, to pay estate taxes would probably exceed their already stretched capacity to raise money. This is especially true of family farms, which typically borrow heavily each year to finance the next year--and if there is a crop failure, or a significant downturn in their market (especially more than one year running), such family farms run a serious risk of bankruptcy and loss of everything. They can't raise any more money. Their farms are already mortgaged!
[ December 12, 2010, 11:52 AM: Message edited by: Ron Lambert ]
Posts: 3742 | Registered: Dec 2001
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posted
Do you even know what percentage of family owned farms are mortgaged, or are you just essentially making all of this up in order to rail on those rascally leftists in your head?
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Blayne Bradley
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You know if I can't say Tea Bagger than you shouldn't be allowed to use the word "leftist" the same way McCarthy says "Communist".
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Blayne are you saying this because this point really means a great deal to you, or just to stick it to your opposition?
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Blayne Bradley
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posted
Everytime he goes into a thread he shouts the same rhetoric, never backs up his claims, never listens to refutations always shifts the goalposts around always claims evolution is a myth taught by satan, will always without fail state, claim, or imply that 'leftists' are all godless eldritch abominations out to destroy america and that we're all damned to hell and he's been doing this for years and yeeeeeeeeaaaars and goes into every thread even if only remotely tangentially related to "The Left", or "Science" to spout his irrelevant discredited irredeemable pseudoscience crap and will never at any point budge from that positions except on the few exceptions where he phrases it in such a way as to infuriatingly imply that he had that belief all along and pretends that he just guided you to that conclusion nodding along in his sublime ignorance.
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