Question about Estate Tax (RW rebuttle)

[fencesitter]

On a talk show this morning, there was a guy who wanted the absolute repeal of the dreaded "Death Tax" Although it's been shelved in the Senate, his lobbying group will try to bring it up in the fall. When asked to give an example of the "family farm or business" folding to pay the tax (which in fact has never happened), he said Yes, especially in the south around wetlands and large tracts of land that had to be sold off to pay the estate tax opening up protected areas to development. He went on to say environmental groups backed the elimination of the estate tax for this very reason. Is this true?

[mrreowwr_kittty]

1. I seriously doubt it.

If the lands were protected before, then why would they suddenly become "unprotected"? Sounds like a deliberate RW shill caller.

[Bridget Burke]

2. The burden of proof is upon enemies of the "Death Tax"

They haven't managed to find any real examples of "family farms" lost because of Estate Tax. Because of his "special" argument, he also needs to find environmental groups who oppose the Estate Tax.

What about family farmers forced out of business because they can't compete with Corporate Agriculture?

[larrysh]

3. death tax

I don't know about family farms, etc., but my sister and I just paid
$287,000 in estate taxes....which used up all the cash that was
available in my father's estate. That $287,000, split equally between
my sister and I, would have gone for the expansion of our businesses,
which would have resulted in the hiring of at least 2 more people
at my business, and 4 more people at hers.....

[dysfunctional press]

5. i gotta call bullshit on this one.

and not just because of the ridiculously low post count...

question #1:
what was the total value of your father's "estate", that you had to pay $287,000 in estate taxes...?

[Tansy_Gold]

6. So you paid $287,000 IN CASH on an estate how big???

Yeah, I'm gonna call you on this one.

You and your sister each have your own businesses employing a number of other people. You got a windfall of $XX valuation when your father died, and he had $287,000 IN CASH to allow you to pay the estate taxes. Everything else he left is now yours free and clear.

Allow me NOT to feel sorry for you. :nopity:


Tansy Gold

[larrysh]

30. On my Father's Estate

The rest is invested in tax free municlpal bonds. designated for the educations of my 4 childrens and my sisters two. Yes, there will be some left over, but "social insecurity" doesn't pay squat and neither my sister, nor I, plan on working as greeters at Wal-Mart. By the way, both sides of my family have been Democrats all the way back to the Civil War, where my great-great grandfather fought for the South. He rode with Stand Watie's Cherokee Mounted Rifles and fought at Pea Ridge,
Fort Gibson. and along the Missouri, Kansas border!

[Tansy_Gold]

31. I'm willing to risk having this post pulled because

I still think there is a lot here that either isn't quite up to snuff or is just plain, um, not true at all.

Larry, you (and your sister) still received the surplus of your father's estate, which other posters have variously estimated at between $800,000 and something over $4,000,000. THE ESTATE paid the taxes, not you. You didn't have to cough up any cash, or mortgage your house, or empty your savings account. And even if you did, wouldn't just about any of us take on a $250,000 mortgage in order to pay the taxes on a $4 million estate, especially an estate in tax-free municipal bonds?

You claim that you and your sister each have businesses and that these businesses are apparently financially strong enough for you to have employees. If this is true, shouldn't you be putting something away so that "social insecurity" isn't the only thing you have to fall back on when you're too old or too frail (or too tired of working)? Wouldn't your businesses provide you with sufficient income so that upon reaching retirement age you wouldn't have to be a Wal-Mart greeter?

It's nice that your dad was able to leave a generous college fund for his grandchildren. You should be damn glad to have it, regardless how old your kids are. My daughter is paying off about $60,000 in school loans; my son-in-law, who got some GI benefits, will still be paying off about $30,000. They didn't have grandparents well enough off to set up funds for them.

The vast majority of Americans DO NOT LEAVE HUGE ESTATES. Some small businesses (including farms) do have valuations above the exemption level, and any businessperson with brains will make arrangements through insurance policies or transfers of ownership to make sure her/his heirs are able to maintain the business if they wish to do so.

Therefore, I still don't have one freakin' ounce of pity for you, Larry. My husband worked all his adult life and wasn't able to leave me an "estate" consisting of anything other than a couple of small insurance policies and a paid-up mortgage on a house worth a hell of a lot less than the pre-boooosh exemption. You and your sister are fortunate enough to be able to sit back and enjoy a small fortune; you ought to be glad you had the cash to pay the taxes on your inheritance.

And just so you know: Civil War era Democrats were the party of the South, and they morphed into Dixie-crats and then into today's Republicans, so bragging about your "Democratic" roots don't hold no water with this lady (bad grammar intentional).

Oh, and I see you removed your obviously right-wing sig line.

Where's the :thumbsnose: smiley?


Tansy Gold, mildly disgusted

[gratuitous]

10. In order to pay $287,000 in estate taxes . . .

The estate would have had to have been worth in excess of $4 million. $287,000 in taxes would represent 46% of the amount over $4 million in the estate. Assuming no other sheltered money, gifts, charitable bequests, the minimum value of the estate would have been $4,623,913, an effective tax rate on the totality of the value of the estate of 6.2%, leaving a total residue more than $4.3 million.

Sounds like you should sue the shit out of your inept accountant or bookkeeper if you couldn't do any better than that with your split of $4.3 million.

[Yupster]

13. We paid $ 180,000 estate tax

when my aunt died 6-8 years ago. The allowance back then was only $ 600,000 which was too low.

It bugs me when newspapers say the estate tax only effects the top 1 % because it sure hit me and I'm not in the top 1 % of anything. You can see that written every single day on DU too.

If my aunt died today, we wouldn't have had to pay any. Those who say we need to roll back all of Bush's tax cuts, do you mean go back to the $ 600,000 estate tax limit? That's just too low. Lots of regular middle class people die with over $ 600,000 in assets. Hell, today a house in a big city could easily be worth that alone. Then if there's any life insurance too.

I'd be happy with a compromise of around $ 5 million.

[clmbohdem]

15. GOP refused to raise the exemption level

The Dems wanted to raise the exemption level, but the GOP said no.

[lumberjack_jeff]

19. You inherited $820,000 after tax.

Using the $600,000 limit, $180,000 in tax indicates approximately a $1m estate. That's a tax rate of 18%. Compared to the tax rate on work, I don't consider that unreasonable.

Why do we accept the basic premise that a "middle class" estate should be tax free? Middle class wages are not exempt. Taxing an estate, unlike every other kind of tax, is a hardship to no one.

[Romberry]

25. Actually, it did NOT hit you

The tax comes from the estate. The estate pays it, not you. That isn't a subtle distinction. And you also have the issue of the "top 1 percent" wrong. It's the estates in the top 1 percent that pay the estate tax. That's what the 1 percent refers to, not the recipients.

[lapfog_1]

16. You and your sister "just" inherited $2.7 million (or more)

based on the current estate tax rate (which, for 2006, is 46 percent on the amount over $2M)...

And that doesn't include the annual gifts and one time gifts your father could have set up for the two of you.

At the least, you just received $1.2 Million tax free dollars.

I don't think you'll find a lot of sympathy from people in this forum, most of whom work and make honest livings earning something like $25,000 to $75,000 BEFORE income tax.

start thinking on how long the rest of us have to work to earn $1.2 M after tax dollars...

BTW, if you have a business that can profitably use 2 more employees, why can't you hire them anyway??? Simple economics says that you can and will do so, and if you needed capital expenses to do so, you have sufficient.

[lumberjack_jeff]

21. "I'd'a hired more people if I had more money in the bank"

Businesses don't hire people because they have money. They hire people because they have profitable work for 'em to do. If he'd hire people solely because he has extra cash, he's a shitty businessman.

Rich people who armtwist tax concessions from the public on the basis that they would give that money away are the worst kind of extortionists - dishonest ones.

[Tansy_Gold]

27. Good point, Jeff

:thumbsup:

[wicket]

18. Bullshit.

:nopity:

[LSK]

20. what did you do with the other $2million?

[Hamlette]

4. most family business assets are exempt

notice the guy says wetlands not farmland. Daddy owns 500 acres of beachfront as a vacation home, not exempt. Daddy owns 500 acres farmland which is actually being farmed,...exempt.

[fencesitter]

29. Aha. That's a good example!

[seasat]

7. It's a lie.

An economist addresses this misinformation at this blog. (LINK) It's based on an assumption by the Keystone center based on 1995 estate tax laws that some estates with a large property component will be broken up to pay for estate taxes. There are no studies that indicate that it will involve wetland, forests ect. Another study that I read found that the vast majority of estate properties that were sold were not to pay estate taxes but because the heirs wanted the cash instead of the property.

IMHO, the estate tax possibly preserves wildlife habitat. A study I read pointed out that because of the estate tax many estates reduce their taxable size by donating to charity. That donation can be for land preservation. I'd love to see an actual study on this since it apparently has become a winger talking point.

[Yollam]

8. If the right says it, you can bet it's a lie or distortion.

And it's spelled "rebuttal".

[grytpype]

9. rebuttal

and no it's not true

[Norquist Nemesis]

11. Names, dates, locations

Give me names, dates, and locations. Till then, I'm taking it with a grain of salt.

[1932]

12. People who don't care how polarized wealth is so long as wetlands are

protected have their priorities totally mixed up.

However, I suspect this isn't even true.

The thing that's really forcing family farmers to sell is the inability to compete with corporate farms and that pressure to sell occurs all time and not just at the death of the owner.

[LSK]

23. if they cared about wetlands, they can donate the land

Im sure lots of groups would be willing to take it over and preserve it.

[Tansy_Gold]

28. My in-laws sold the family farm four years ago because

none of the three kids could make a living farming it without having a full-time job on the side, too.

A midwest "family farm" of 300-400 acres that used to support an extended family no longer can because of the competition from agricorps and imports.

IIRC, even the right-leaning American Farm Bureau has never been able to produce a single instance of a family farm being lost to estate taxes AS LONG AS THE HEIRS CONTINUE FARMING. If they choose to sell out, that's their choice and then they pay the taxes. But if they continue the farming operation, there's never been a loss to taxes.

[lumberjack_jeff]

14. Farms are developed because it's lucrative

not because of estate taxes.

Farming's hard work. I don't blame em, really. If I inherited a farm and it were in any way a candidate for development, I'd bring in the bulldozers too. Getting up at 03:30 to milk the cows is for the birds.

But I wouldn't blame that decision on estate taxes.

[LSK]

17. basically they are coming up with new ways to spin it

Like I keep saying, IF theres a problem with family farms being lost, FIX THAT PART OF IT. Instead thou, they want to KILL THE WHOLE THING and they are not explaining how they are going to make up the $1trillion loss of tax revenue in the next 10 years.

In addition, if the kids have to sell the family farm, they are walking away with AT LEAST $2million without paying taxes on. Id love to have that kind of problem, I could retire on that.

[zbdent]

22. About the only "family farm" that is in danger of being lost due to the

inheritance tax is the family who owns thousands of acres on the Big Island Hawai'i . . . which they use for "cattle" raising . . . the patriarch passed away, and it's still in court battles (all these do-nothing kids want the biggest piece of the $$$$$) . . .

[sutz12]

24. I don't have any facts to back this, but

I believe most family farms or businesses that are sold after death of the owner happens because the inheritors, for whatever reason, do not wish to continue in the business in question, including farming.

That and the whole 'division' question. If heirs cannot decide how to divide the responsibilities involved in the inheritence, it becomes easy to just sell it and split the cash.

Again, the real backers of this measure are the very uber-rich, which includes less than 2 dozen families in the country.

As a liberal, I ask myself a question whenever a RWer proposes a tax cut. I always want to know how many times a person, family, or entity is forced into poverty by the tax they want to cut. If the answer is "none," which it inevitably is, then there is no reason for the tax cut. "Fairness" be damned, when "fairness" means money is flowing UP the socio-economic ladder.

[Hidden Stillness]

26. How These Routines are Conducted

There are several techniques that corporate Republicans use when trying to push this dismantling of our political system, by de-funding it, and one of the main ones currently is this, "Hey, I heard this today--is it true?" Just trying to plant a seed...

It is not a "death tax"--no one is taxed at death, as if that were what was being taxed; more stupid "framing" just to make people ignorant--and lowering it, would not be a tax cut. You can only actually cut taxes when there is a surplus, and this is the un-needed extra amount. If the inheritance tax were lowered. it would not just be a cut, it would be a tax-shift onto all the other citizens of America, who do not have connections. Republicans have us so colosally in debt, that it has to be paid somehow, and so rich people escaping their share only put it on us. It does not just go away. Things are so bad this time, though, that they could not accomplish it, even as heavily funded as the effort was. This benefits a miniscule number of hugely wealthy families, and no one else. Anybody so rich that they have to pay an estate tax, who then has money problems paying it, deserves it.

The propaganda, though, is that all of us will have to pay it, all of us are threatened by it, you will not be able to pay the heavy tax that will suddenly be put on you, they will take your small, middle class house, etc.--all lies, with no facts about the estate tax and who pays it, explained. Rich people whine and cry that 30% of this, or 17% of that will have to be paid, yet all the rest of us pay taxes on 100% of our income, and have taxes deducted for payroll taxes before you even get your check. Reagan, the evil bastard, introduced a tax on the tips of underpaid waitresses, which had never existed before, and killed the middle class deduction for non-cash charitable giving. I don't remember any rich people crying for us, and trying to get it removed.

Any appearance of "support" for rich people's whining and trying to shift their taxes onto us, can only be maintained by lying and pretending that this somehow applied to middle class people. This tactic is not new. I remember, during the '70s I think it was, when George McGovern tried to help the tax burden on the middle class by increasing the percentage taxed by the inheritacne tax, and was shocked by middle class people afraid of it and opposing it. "They must think they're going to win a lottery!" McGovern said, as these silly people fought their own best interests, because they were so ignorant about what it would do. I remember a comment about it, something like, McGovern wanted to "pass laws against inheriting money"! I remember the fascist Chamber of Commerce, during the '90s I think it was, referring to an unsuccessful attempt then to tax capital gains at the same rate as earned income, as "communist"! If the corporate media can continue to censor even the most basic real desriptions of these laws, then they can fabricate a phony "uprising of support" for all these things they are not revealing at all, as no one in the real world of 100%-taxed work would ever support Republicans, if they knew.