• If you are having problems logging in please use the Contact Us in the lower right hand corner of the forum page for assistance.

Ranchers.net

Family farmers and ranchers are being used as pawns in this big transfer of wealth under the proposed killing of the "death tax" for the very wealthy.

Family farmers/ranchers want to pass on their farms/ranches to the next generation but the death taxes could destroy that dream because land values have way outstripped the income that can be produced by those farms and ranches.

The very wealthy are using this as an opportunity to transfer taxes from themselves to the middle class.

Here is how it works:

The Wealth Distribution

In the United States, wealth is highly concentrated in a relatively few hands. As of 2001, the top 1% of households (the upper class) owned 33.4% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 51%, which means that just 20% of the people owned a remarkable 84%, leaving only 16% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth, the top 1% of households had an even greater share: 39.7%. Table 1 and Figure 1 present further details drawn from the careful work of economist Edward N. Wolff at New York University (2004).

source:

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

The top 20% want to transfer, without taxes, their wealth to the next generation.

Much of the wealth is tied up in stocks and businesses that did not have personal taxes paid yet.

For example, if Bill Gates owns 100% of microsoft and sells off 50% of that stock to grow his business, he still has 50% of the business. He did not pay taxes on that ownership because he has not sold the assets yet. When he does sell that business, he will have to pay the 20% in capital gains taxes unless he shelters that gain in some other way.

If he dies and has not tied it up in a trust, with no "death tax" his heirs would pay nothing, not even the 20% of capital gains.

That means he could grow his wealth tax free as long as he doesn't sell the assets and have to pay the capital gains taxes. Capital gains taxes are less than the income tax rate and therefore are a boon to large investors. To see how this works, look at this website:

http://www.moneychimp.com/features/capgain.htm

While average wage earners also get a capital gains tax break if they sell assets after 1 year, the majority of the benefit goes to those who have the majority of money they want to pass on.

The death tax is the great equalizer.

Under the death tax, the 50% of the business that Bill Gates owns, if not sheltered (there are way too many shelters for the super rich) would be paid to the U.S. treasury. Without it, there would be a huge transfer of wealth and accumulated taxes that would never have to be paid.

If that money is not paid to the treasury, guess who gets to pay the taxes that money would have paid?


YOU!!!!
Top