Is the inheritance tax just?

[Annie]

You may speak for yourself, I for myself. The post under discussion by yourself was telling Dillo that you both had a right to your opinions.

Clearly you didn't mean that.

 

[MtnBiker]

Robert Sakata is a 42-year-old vegetable farmer from Colorado. His father started their family's business in 1944, which he still owns today. Although Mr. Sakata and his father are not millionaires, the younger Mr. Sakata will be forced to pay a $200 million estate tax bill when his father passes away. He will pay this bill because of the value of the 40 acres that his father bought in 1944 for $6,000 has skyrocketed to $380 million. It is the value of the land, not Mr. Sakata's gross income, which will determine the rate at which he will be taxed. He will be forced to sell all or most of his land to foot his federal tax bill. The 350 workers he and his father employ will lose their jobs in the process.

Robert Sakata's situation is similar to that of a North Carolina farmer named Clarence who provides more than 70 jobs for members of his community on his three farms. He expects to pass his business on to his son, who is currently one of his employees. Most of the business's assets are tied up in machinery and tools. Although Clarence and his son each only gross about $31,000 per year, when Clarence dies his son will owe the government approximately $1.5 million in estate taxes. Clarence's son will have to sell the land and discharge his 70 employees.

Robert Sakata and Clarence have both purposely slowed the growth rates of their businesses to avoid some of the anticipated estate tax bill. These extreme measures harm the economy by slowing growth of the gross domestic product (GDP) and depriving the economy of new capital.

Despite such stories, proponents of the estate tax say the death tax is beneficial to the economy and would be "risky" to eliminate because it could cause a budget deficit. Studies show, however, that the repeal of the estate tax would have positive effects on the economy. A study done by The Center for the Study of Taxation shows that, if the estate tax had been repealed in 1971, by 1991:


There would have been more than 262,000 more jobs (13,000 more annually);
The GDP would have been $46.3 billion more; and
There would have been $398.6 billion more generated in capital.


Link

 

[OCA]

Originally posted by Socrates
The US wastes 250 million dollars a year paying interest on Reagan's debt. Of course I care about this. It hurts me financially since it costs me hundreds of dollars per year, every year (it has cost me thousands of dollars over the years). Clinton raised taxes on the rich, and he started paying off the debt. That was good policy. He also cut spending a lot which was also good (including more welfare reform than either Reagan or Bush have done).

To say that the debt is caused by spending is, of course, true by definition. The only way to build up debt is to spend. The question is: Exactly what spending do you want to cut? The military, social security, health care, and interest on the debt make up almost all of the budget. Which of these do you want to cut? I'd rather tax the rich their fair share than cut any of the first three. I'd like to pay off the damn debt so we could get 250 billion (!) extra dollars every year to use for whatever purpose we choose. But spending more on the military, more on social security, more on health care, and just continually increasing the debt is irresponsible and harmful. And that is exactly what Reagan did and what Bush II is doing now.

Lets be honest here, Clinton only proposed welfare reform after the Republican takeover of Congress in 1994, he was forced by Repubs to do it otherwise he would never have gone there.

 

[MtnBiker]

Arguments Against the Estate and Gift Tax


A second major argument against the estate and gift tax is that it burdens family businesses and farms and makes it more difficult to pass on these assets to the next generation who can continue the business. However, only a small portion (less than 5%) of businesses and farms are likely to be affected; many of those have sufficient liquid assets to pay the tax. In addition, extensions of time to pay the tax are allowed.3



Link

 

[OCA]

One important fact that has been ignored by Socrates: Bubba did not pay off the debt by taxing the rich he did it with the single biggest middle class tax raise in American history when he campaigned in 1992 on cutting middle class taxes.

 

[MtnBiker]

Originally posted by Socrates
The answer is that the government should not make them sell their family farm, and the government does not...

Not exactly true.

 

[Annie]

Originally posted by MtnBiker
Not exactly true.

Good call. Don't ask me why I took his answer in the first place, must have been tired.

 

[MtnBiker]

JOHN F. STURM

Estate tax is wiping out
family-owned newspapers

by John F. Sturm

The federal estate tax has many family-owned newspapers up against the ropes, and without some quick help from Congress, these vibrant voices of the community are in danger of going down for the count.

In 1910, there were 2,100 independently owned newspapers in the United States. Since then, the number has dropped to only about 300. One of the biggest contributors to their demise is a punishing estate tax that requires payment of up to 60 percent of all assets at the time of death. This can result in heirs being forced to sell the property simply to meet the tax burden.

One recent victim is The Tribune in Ames, Iowa, which was put on the market in September after the sudden death of one of its owners. With the grieving family facing a huge estate tax due Oct. 1, the two remaining partners, Pulitzer Prize winner Michael Gartner and newspaper veteran Gary Gerlach, were forced to sell The Tribune and the other community papers and assets they owned.

Family newspapers are just one of the many businesses that are being crippled by the estate tax. This scenario is repeated thousands of times a year in other industries as this crushing tax brings a wide range of family-owned businesses to their knees. It is telling that 91 percent of all businesses in America are family-owned, and 90 percent of family businesses fail shortly after the death of the founder. According to the Small Business Administration, 33 percent of grieving families must sell all or part of the family business to pay the estate tax.

Women and minorities are hit particularly hard, especially those entrepreneurs who are newly economically empowered. Following the recent death of John Sengstacke, the publisher of the Chicago Daily Defender -- one of the oldest black-owned daily newspapers in the United States -- his heirs were forced to put the newspaper up for sale. They could not afford to pay the $1 million in estate taxes. Sengstacke's granddaughter is trying to come up with the financing to pay the taxes and keep the historic newspaper in the family.

If family businesses, one of our country's greatest sources of jobs and creativity, are suffering such losses, who gains? The answer appears to be no one, with the exception of the accountants, tax attorneys and estate planners hired by families to manage their assets in ways to avoid the tax. That money could be better used investing in equipment, expanding business and creating more jobs.

The irony is that the estate tax directly contradicts the fundamental principles that the United States supports: hard work, saving for the future and fairness. Why use this onerous tax to penalize a person who works hard, pays taxes along the way and invests and saves money?

For all this, the estate tax brings in less than 1 percent of total federal tax revenues, while enforcement costs the government 65 cents for every dollar received. According to the Joint Economic Committee of Congress, in 1998, families spent more than $20 billion to prepare for and comply with the estate tax. The amount was nearly as much as the revenues the estate tax raised that year.

Suffering from the estate tax runs deep and wide, which is why, according to The Center for the Study of Taxation, 75 percent of the public believes that this tax is wrong and should be repealed. Repeal is supported by diverse business groups, including the National Black Chamber of Commerce, U.S. Hispanic Chamber of Commerce, the National Indian Business Association and the National Association of Women Business Owners.

Family-owned newspapers make a vital contribution to the diverse voice of America. Congress should act now to reduce and eventually eliminate the unfair, unproductive estate tax. These unique entrepreneurs are a community resource too valuable to lose.

http://www.deathtax.com/deathtax/sturm1199.html

 

[nbdysfu]

Originally posted by Socrates
I have no problem with spouses wealth not being taxed until both of them die since they really co-own it. But when it gets transferred to someone else- whether that be their kids, friends, or whoever- it's income for the new person and should be taxed.

How do you make that distinction? Do families mean nothing to you?

My parents' money is not my money. I have no right to any of it. If they choose to transfer it to me during their lives or after they die, it's income for me and (like everyone else) I should pay tax on my (unearned) income.

Alright, let's say your father decides to gift half his inheritance to an orphanage and a prominent stem cell research center, and the rest he gives to you.

Should the government then take a chunk out of that to replace linoleum tiling in the pentagon bathrooms, and you are forced to sell the family land you cannot afford to pay the tax for, and the land is sold to a developer who clears the forest on it to put in a Wal Mart?

The government has no right to tax your parent's money which has already been taxed. If you feel that money is not yours to keep then give to charities, help out your own community. Hell hand over the deed to your father's property to the tenants. It's your right. A developer who gets your father's land from a government auction will never do that.

 

[MtnBiker]

Luntz Research Compaines *note, pdf file*
4. The arguments against the death tax are universally positively received. The results
below explain why when politicians say it is the wrong tax and the wrong amount at the
wrong time, the public agrees.
AGREE DISAGREE
Inheritance taxes are an extreme form of taxation. 79% 17%
The tax rate, as high as 50%, is higher than even
the highest federal income tax rate – and that’s unfair.
Inheritance taxes represent double and triple taxation. 79% 18%
It is unfair for people to pay taxes on their income,
and then more taxes on what they save, and a third
time when they die.

5. The arguments in favor of maintaining the death tax have virtually no support from
virtually anyone. We tested the arguments most commonly used by advocates of
maintaining an inheritance tax and almost all of them failed to win much backing:
AGREE DISAGREE
People do not work for inherited income, so inheri- 19% 79%
tances should be taxed at a higher rate since it is
not earned income.
The inheritance tax is progressive, and it only affects the 28% 56%
wealthiest Americans. Right now, inheritances of less
than one million are not taxed. Since only the richest two
or three percent of Americans have estates that high, the
death tax should not be reduced.
Thanks to accountants and lawyers, the wealthiest families 46% 45%
are able to take advantage of tax loopholes to avoid paying
their income taxes, and the inheritance taxes make up for
some of the money that is lost.

6. Abolishing the death tax is an electoral winner. Conversely, expressing support for
maintaining the inheritance tax will cost you votes. After asking respondents six
questions about the death tax – three in favor and three opposed – we concluded by
measuring the political and electoral impact. The results were conclusive: when asked
which candidate they would support, fully 58% of the electorate (including a majority of
every subgroup) would vote for the candidate who wanted to REPEAL the death tax,
while only 32% would vote for the candidate that supported maintaining the
inheritance tax. The almost 2 to 1 ratio is striking considering the fact that respondents
now knew that the tax only impacted millionaires and the top 2% of all estates.




CONCLUSION
Even in times of economic distress and budget deficits, the Death Tax is simply one of
the most hated forms of federal taxation. No matter what you call the tax – death, estate or
inheritance – people hate it when they first hear about it. They hate it when they learn more
about it. And they oppose those politicians who want to maintain it. While it may be targeted to
collect money from the wealthy, lower income Americans are just as hostile to its existence.
While Republicans may have scored significant political advantage supporting its repeal,
registered Democrats don’t like it, either. Americans of all stripes want the death tax to die.


It seems proponets of the death tax are in the small minority.

 

[insein]

Originally posted by OCA
Here ya go, read it and weap.

Real Truth About Reaganomics

Already tried that OCA. He doesnt seem to be able to read when facts are presented to him.

 

[ajwps]

Originally posted by OCA

One important fact that has been ignored by Socrates: Bubba did not pay off the debt by taxing the rich he did it with the single biggest middle class tax raise in American history when he campaigned in 1992 on cutting middle class taxes.

Bubba and his conservatives make class warfare to get re-elected. The dems say he doesn't tax the upper class, over-taxes the middle class and kills the lower classes. All this class divisions in a country where all men who have the willingness and drive to take the opportunities available to become whoever they choose. Just listen to the democrat national committee and their single issue with which to rule over the proliteriate with class-warfare. The democrats are hoping for the eventual dictatorship of the masses by another big Bill Clinton.

Karl Marx - Father of Communism seems to agree with the US Democrat agenda.

Marx's class theory rests on the premise that "the history of all hitherto existing society is the history of class struggles."16 According to this view, ever since human society emerged from its primitive and relatively undifferentiated state it has remained fundamentally divided between classes who clash in the pursuit of class interests. In the world of capitalism, for example, the nuclear cell of the capitalist system, the factory, is the prime locus of antagonism between classes--between exploiters and exploited, between buyers and sellers of labor power--rather than of functional collaboration. Class interests and the confrontations of power that they bring in their wake are to Marx the central determinant of social and historical process.

 

[MtnBiker]

What happened to Socrates? Was his arguement so weak he couldn't come back to defend his position?

 

[dilloduck]

Either that or doing some fancy estate planning