Repeal the death tax

[Beefman]

The info below was emailed out last night by the MO Cattlemen's Assn. I would also encourage you to read an excellent article on this subject in the 4/13/06 edition of the Beef Business Bulletin....which was authored by Maxine Jones.

NCBA Encourages Producers to Take Action on Death Tax Legislation

A vote on repeal of the devastating Death Tax is scheduled in the Senate before Memorial Day recess. Cattlemen can assist with this effort by contacting Senators and reminding them that the Death Tax forces real farming and ranching out of business when a family member dies.

- Senators will be at home on recess until April 24. This is the perfect time to contact them at their local offices. Are they holding town hall meetings or attending other events in your community? Talk to them about this issue in person!

- Mark your calendar for the "National Cattle Call to Kill the Death Tax" on Tuesday, May 9! NCBA is coordinating a national call-in day for cattle producers to call their Senators to voice support for full and permanent repeal of the Death Tax. Any Senator can be reached via the Capitol Hill switchboard at (202) 224-3121, or individual office numbers can be found at http://hill.beef.org/pdfs/109thSenateContacts.pdf. For more information, contact Jenni Beck at [email protected] or (202) 347-0228. Stay tuned for more information!

- Send letters to Senators by clicking on http://capwiz.com/beefusa. Detailed information and analysis on the issue is available as well.

- Producers are asked to submit their story to NCBA and take our 2006 Death Tax Survey at http://hill.beef.org/tax. Nothing is more effective or memorable than hearing cattlemen's personal stories about how the Death Tax has affected their family and their businesses!

 

[Tommy]

Devils advocate....According to the latest data from the Internal Revenue Service, out of the approximately 2.3 million deaths per year, only 1.9 % of estates pay estate tax (and only 4.3 % file a return). These numbers can be contrasted with the income tax where about 70 % of families and single individuals owe tax. In addition, in 1997 about 56 % of those paying an estate tax had gross estates valued at more than $1 million. Because the exclusion is rising to $1 million by 2006, the share of decedents' estates paying estate taxes will fall somewhat; the fall would be greater but for the growth in wealth that has been fueled bya rising stock market. Progressivity in the tax system, however, could also be altered through changes in the income 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

 

[Econ101]

Good points Tommy. It seems like what you are saying is that Beefman is trying to get everyone to exempt taxes on wealth transferred when almost all taxpayers who die do not have wealth transferred.

An exemption on a working family farm should not extend to protect some of the wealth amassed in this country. Most of the super rich have loopholes that allow an estate's assets to get out of the estate before death anyway. It is a huge business protecting the wealth of the rich from taxes the rest of us have to pay.

The "death tax" in many instances, is a delayed capital gains tax. Why should we exempt taxes for the rich just because of death? Maybe they should pay their fair share for being able to live in a country as prosperous and civil as ours.

You can always find examples that sound outrageous to protect the outrageous tax exemption for the rich.

It seems to me, we need to find better ways to tax the rich than to continually provide loopholes that make the rest of us pay taxes for them based on the exceptional examples rather than the rule.

I will remind everyone that social security taxes are paid on less than the first 100k in earnings. The social security tax surplus is being used to finance the current spending of the govt. and has been for years. It is the working man and woman that are paying for the govt.'s functioning while those who earn over the 100k or recieve their money from stock options etc (non earned income) that is not SS taxed get a free ride that the rest of us are providing. The working men and women are essentially acting as a free piggy bank for the govt. while those earning over 100k or recieving compensation in other ways are allowed to buy the govt. debt or invest that money and actually own those assets. Social Security IOUs are held in the "trust" fund. It hasn't been too trustworthy of a system and actuarily it will be bankrupt soon.

Why keep giving the free ride to the rich? Shouldn't they pay their fair share to get the benefits the govt. provides to us all?

 

[Cowpuncher]

The proposed repeal of the Death Tax assumes that the decedents property would be passed on to heirs at the decedents cost.

This is basically fair since the appreciation in the property would never otherwise be taxed (It wasn't taxed during the decedents lifetime, either.)

As long as we have a government with an insatiable appetite for spending money, it has to come from somewhere - the people who have it.

The drawback to the death tax repeal is that someone with property less that the exclusion - whatever that may be - would also pass their cost basis on to heirs and they would have to pay tax on the sale of the property.

You can't have it both ways - no death tax and pass property on to heirs at some value much higher than cost.

 

[Econ101]

The proposed repeal of the Death Tax assumes that the decedents property would be passed on to heirs at the decedents cost.

This is basically fair since the appreciation in the property would never otherwise be taxed (It wasn't taxed during the decedents lifetime, either.)

As long as we have a government with an insatiable appetite for spending money, it has to come from somewhere - the people who have it.

The drawback to the death tax repeal is that someone with property less that the exclusion - whatever that may be - would also pass their cost basis on to heirs and they would have to pay tax on the sale of the property.

You can't have it both ways - no death tax and pass property on to heirs at some value much higher than cost.

You make a very good point there, Cowpuncher but we also have to look at the reason there is an inheritance tax in the first place.

One is to get more tax revenue to run the government--schools, roads, armies, civil structure, etc. That is the same reason all of us have to pay taxes so it should not be discounted for spurious reasons for the benefit of the rich. As Tommy stated, the percent that actually have to pay it is very very small.

Here is a site with a little background info. on the implications of the inheritance tax:

http://www.cnie.org/nle/crsreports/economics/econ-92.cfm

The second is to make sure that for whatever reason, the wealth is not used to make the rest of the people in society work for those who have inherited wealth by whatever means for generations to come. Without a rollover of wealth in society, we form dynasties of individuals that have amassed wealth for themselves and their families. Our society becomes more stratified with more resources going to make sure the rich remain rich for generations to come.

One of the outrageous things we are beginning to see in our society is the good old boys club at the top management level of our corporations that control the assets in the U.S. The recent 400 million dollar severance pay to Exxon's retiring Chairman Lee Raymond is an example of this. Eisner's Disney is another.

If we expect Americans to work and to innovate and to save and invest to be able to get rich, why can't we expect it from the richest and most powerful americans? Why couldn't Lee Raymond invest his salary into Exxon and make money that way instead of a good old boys board of the company handing him the earnings of investors?

A lot of the recent earnings of companies have happened despite what the companies and their leadership have done. One example is the lowering of interest rates in the U.S. economy. Because lower interest rates mean that earnings multiples can be higher, the stock of a company can go up higher. Crediting the leaders of companies with this phenomena and paying them bonuses for higher stock prices for this is just a little much.

Exxon's recent high profits are another example. Exxon did not "find" another large oil patch with their investments in energy, they benefited off of the scarcity of oil. It led to record profits. Why credit Exxon with not finding more oil? Why pay Lee Raymond 400 million for this?

Sorry cowpuncher, one thing led to another. The problem is there are just too many things.

 

[TSR]

The proposed repeal of the Death Tax assumes that the decedents property would be passed on to heirs at the decedents cost.

This is basically fair since the appreciation in the property would never otherwise be taxed (It wasn't taxed during the decedents lifetime, either.)

As long as we have a government with an insatiable appetite for spending money, it has to come from somewhere - the people who have it.

The drawback to the death tax repeal is that someone with property less that the exclusion - whatever that may be - would also pass their cost basis on to heirs and they would have to pay tax on the sale of the property.

You can't have it both ways - no death tax and pass property on to heirs at some value much higher than cost.

You make a very good point there, Cowpuncher but we also have to look at the reason there is an inheritance tax in the first place.

One is to get more tax revenue to run the government--schools, roads, armies, civil structure, etc. That is the same reason all of us have to pay taxes so it should not be discounted for spurious reasons for the benefit of the rich. As Tommy stated, the percent that actually have to pay it is very very small.

Here is a site with a little background info. on the implications of the inheritance tax:

http://www.cnie.org/nle/crsreports/economics/econ-92.cfm

The second is to make sure that for whatever reason, the wealth is not used to make the rest of the people in society work for those who have inherited wealth by whatever means for generations to come. Without a rollover of wealth in society, we form dynasties of individuals that have amassed wealth for themselves and their families. Our society becomes more stratified with more resources going to make sure the rich remain rich for generations to come.

One of the outrageous things we are beginning to see in our society is the good old boys club at the top management level of our corporations that control the assets in the U.S. The recent 400 million dollar severance pay to Exxon's retiring Chairman Lee Raymond is an example of this. Eisner's Disney is another.

If we expect Americans to work and to innovate and to save and invest to be able to get rich, why can't we expect it from the richest and most powerful americans? Why couldn't Lee Raymond invest his salary into Exxon and make money that way instead of a good old boys board of the company handing him the earnings of investors?

A lot of the recent earnings of companies have happened despite what the companies and their leadership have done. One example is the lowering of interest rates in the U.S. economy. Because lower interest rates mean that earnings multiples can be higher, the stock of a company can go up higher. Crediting the leaders of companies with this phenomena and paying them bonuses for higher stock prices for this is just a little much.

Exxon's recent high profits are another example. Exxon did not "find" another large oil patch with their investments in energy, they benefited off of the scarcity of oil. It led to record profits. Why credit Exxon with not finding more oil? Why pay Lee Raymond 400 million for this?

Sorry cowpuncher, one thing led to another. The problem is there are just too many things.

This subject has been argued on this site more than once. At least some of the super rich (the ones who will have to pay the Death tax Bill Gates,Warren Buffet) are against repeal of the tax. As it fosters charitable donations-give to charity or pay the tax. If Congress does do away with the tax,guess who will make up the lost revenues. Oh no surely not the middle class working man! But boy what a pr campaign slogan, "Let's repeal that Death tax,You shouldn't have to pay taxes twice, Once while you're alive and then when you die". I wish every middle class working person would research this tax and see who it actually affects. This is just another Republican gimmick for the super rich imo.

 

[Econ101]

Bill Gates and other really rich people can put their money in living trusts and things like that to protect the money. The really rich can always hide their money and still get the benefits that we are all paying and working for. Politicians haven't done their job on that one.

There is a documentary coming out, and I think the name of it is The One Percent. It is about how wealth in the U.S. is handled and how it is passed on. It is by one of the heirs to the Johnson and Johnson family fortune.

When we have politicians and judges that bend over backwards to the desires of this money or the threat from it, we lose a part of our freedom and justice. It does a disservice to all of our soldiers who fight for our country also. This is what it seems Tyson's money has done.

I find it funny that beefman posted this.

 

[Cowpuncher]

There are ways to circumvent the estate tax which has been used by the Kenndys and Rockefellers of the world. If we really want a level playing field, get rid of the trusts, etc. and insurance schemes that have been used to preserve family fortunes.

 

[Sandhusker]

There are ways to circumvent the estate tax which has been used by the Kenndys and Rockefellers of the world. If we really want a level playing field, get rid of the trusts, etc. and insurance schemes that have been used to preserve family fortunes.

The way out is called life insurance. Any estate planning generally has life insurance at the core of it.

 

[Econ101]

There are ways to circumvent the estate tax which has been used by the Kenndys and Rockefellers of the world. If we really want a level playing field, get rid of the trusts, etc. and insurance schemes that have been used to preserve family fortunes.

The way out is called life insurance. Any estate planning generally has life insurance at the core of it.

That is one way Sandhusker. Isn't life insurance is not taxed at a person's death and that is the loophole there. If all your fortune is used to buy life insurance and then your hiers get the life insurance instead of your fortune, then bingo, you have just avoided the death tax on your fortune. Nothing really changes but a piece of paper a little legal work and some nice fees to accountants and lawyers setting up the deal.

Those living trusts are another. Since the living trusts go on forever, there is never any "death tax".

I would avoid making any judgements on your NE man of Berkshire Hathaway or of Bill Gates. We really don't know what or how either one of them will handle their estates. It shouldn't matter. They should not be able to escape the death tax by choice. Some escape these taxes by renouncing their citizenship and moving money and assets overseas. It is all a big game.

 

[Sandhusker]

Why is NCBA worried about estate taxes? Seems to me that is putting the horse before the cart. If they keep rubber-stamping approval on whatever Tyson and Cargill want, there won't be any estate taxes because there won't be any money in ranching.

 

[Econ101]

Why is NCBA worried about estate taxes? Seems to me that is putting the horse before the cart. If they keep rubber-stamping approval on whatever Tyson and Cargill want, there won't be any estate taxes because there won't be any money in ranching.

It is all about appearance of working for producers, not the reality itself. Doesn't someone on this board call that an "illusion"?

SH comes up with the best adjectives. It is too bad he misuses them all the time.