The Death Tax Must Die

The Death Tax is set to increase as part of the “fiscal cliff,” over which the U.S. economy will be thrown come January when tax cuts will expire, taxes will increase and irrelevant budget cuts will be made. Currently, on estates worth $5 million or more, a 35% tax is levied. Next year, that percentage is set to increase to 55% on estates worth $1 million or more. Obama’s “compromise” is a 45% tax with a $3.5 million exemption.

Farmers and ranchers will be hit the hardest even though the death tax is supposedly aimed at the “super rich.” Governments want to prevent these very wealthy individuals from amassing large fortunes which can be passed on to future generations through inheritance. The government can’t just let large estates go untaxed. That would mean that potentially, large plots of land could remain in someone’s family for generations, and the government would never get to profit from it as long as the property stayed in that person’s family. How unfair that would be. So, to make the classes more “equal,” governments tax the estates heavily upon the owner’s death and every time the estate gets passed on to the next generation.

One such rancher is Kevin Kester. Twenty years ago, he paid the IRS $2 million in estate taxes when he acquired the 22,000-acre cattle ranch from his grandfather. But he’s hardly “super rich.” He’s not even rich. He drives a 12-year-old pickup truck, lives in a modest house with his family and makes less than the average government bureaucrat. But because his job as a rancher requires a large plot of land, the government treats him like he’s a “one percenter.” If he were to die next year after the new death tax increases, his kids would be liable for $13 million in taxes. Fox News reports:

“[A]ccording to the American Farm Bureau, up to 97 percent of American farms and ranches will be subject to an estate tax where the exemption is set at $1 million. At that rate, the federal government will pocket $40 billion in 2013 and up to $86 billion in 2021. That contrasts with just $12 billion this year.”

 So, by increasing these taxes, not just on the super wealthy but on average Americans, and by letting tax cuts expire, we’re supposed to be able to avert this “fiscal cliff?” Aren’t these kinds of measures just going to hasten our fall? Raising taxes won’t increase the revenue. No matter what the tax rates have been in the last 60 or so years, the government has only managed to collect 17.7% of GDP in tax revenue. Raising taxes like the death tax won’t help to increase revenue to close the deficit. It will only further cripple the U.S. economy.







Comments

comments

Posted in Taxes Tagged with: , ,
  • colleenf

    Never saw a tax the dems didn’t like………and increase.

  • http://www.facebook.com/larrycindymx Larry Harrison

    Where is Obama going to get his food?

    • disgusted democrat

      The greaser will have to bring in offerings to our great leader of food stuffs as they ileagely happly hop, skip , and jump across our borders!!

  • Brian

    What ever happened to double taxation being illegal? This is EXACTLY what happens to families when a parent dies. Time to sell your estates to your children for pennies before you die to keep these greedy thugs in Washington from stealing it out from under you. Theft is still theft.

    • LeSellers

      Double taxation has never been illegal.

      Your antiSocial inSecurity taxes are paid out of income that’s already been taxed by the income tax. Dividends on stock investments are paid with money that has been taxed, but you will have to pay more. The money you pay a sales/use tax with was taxed, as was that you pay property taxes to keep your home.

      There are taxes buried in the purchase price of every item you buy, from Wonder Bread (soon to be defunct, if not already gone), to a Yamaha motorcycle or piano. The wood in your house was taxed (several times) before the carpenters drove the nails (also taxed), and you paid for those, then paid yet again when the county assessor sends the bill.

      Your strategy will not work. However, look into a living revocable trust. The power elite use them for precisely this purpose, and they do work. Cost a bit to set up, and finding a good estate planner/lawyer is not as easy as looking in the phone book (most are frauds), but the pay off is worth it.

      Mr. O’bama, will there ever be any Jobs?

      • tonyvetpatriot

        Why ared you whining about death taxes. There are so many legal ways around them, you’ve got to be in a coma if you pay any.

        No jobs until [1] Mr Romney and other free-market capitalists quit sending them overseas (which is their right to do…It makes fiscal sense to take advantage of slave labor as long as you can) OR the idiots in the House (translation: “Boehner’s lock-step mindless zombies) pass the job-creating infrastructure rebuilding and repair bills that Obama has proposed.

        • LeSellers

          Once again we experience the wonder of the libnoramus*: so much he knows that just ain’t so.
          * “Libnoramus” is a contraction of “liberal” and “ignoramus”. It’s redundant, since, to be a liberal/progressive, one must be ignorant.

          Romney didn’t send jobs overseas. They were already there. But, even if he had done so, the effect of international trade, even when a job that had been performed in USmerica is now done by a worker elsewhere, the whole world gets richer. Before you respond, research “comparative advantage”.

          Further, overseas labor is far from “slave labor”. Rather much the contrary: it is the best alternative those working in the factories (and other places) actually have. There are no $25/hr jobs in Sri Lanka. A $1.50/hr job is a fabulous opportunity for those lucky enough to get one. We can learn from the post-WWII or Korean War Japanese or Korean experience. Both places were impoverished, but each had such tremendous growth, based initially on those “slave labor” jobs you whine about, that, today, they are economic powerhouses, where people earn about the same as they do here. If USmerican companies had not “sent jobs overseas to those places, they’d still be in poverty. International trade made them wealthy, and, in turn, they made USmerica even more so. That’s the nature of free-market trade.

          Another thing you should understand before removing all doubt about your ignorance is “opportunity cost”.

          Finally, “jobs bills” are a scam and a fraud. It costs upwards of $250,000 per job (and, in some cases nearly half a million dollars) for the federal government to “create” a job. I suppose you refer to all those “shovel-ready jobs” that “weren’t quite as ‘shovel-ready’ as we thought.” O’bama is not much worse than most bureaucratic economists: they pick more losers than winners (and ought not be in the picking game in the first place). Of the list of his big donor/supporters who got hundreds of billions if “stimulus” money, the majority have gone bankrupt, gone with my grand children’s money.

          All the government has to do to make jobs more plentiful is to get out of the way and let private enterprise loose. As soon as an entrepreneur perceives a demand for a good or service, he’ll hire people to produce it. The jobs will come, but they will only come when that perception arrives. O’bama and his ilk are killing demand, making entrepreneurs leery about the future of their investments, and generally generating a jobs killing economy.

          As for death taxes, you are right: those who pay them do so needlessly. However, the mere threat of such taxes is offensive because that existence implies that private property is a myth, condoned, at best, by a government to which all things truly belong. (But then, I didn’t say anything about inheritance taxes, so I’m unsure why you included that rant in your libnoramus message.)

          Mr. O’bama, will there ever be any Jobs?

      • Stan

        “will there ever be any Jobs?” No, Obama is too busy making trouble for everyone to worry about jobs! Get those guns! Get rid of that coal! More taxes! More wind and solar! etc., etc. No oil pipeline, no drilling, more electric cars that dont sell and are a hazard! No need to go on.

    • wizardkar

      Try triple taxation!! We are taxed when we earn it, taxed when we save it and taxed when we die!! Get cash ONLY and screw the government, we are currently being taxed without representation. CALL CONGRESS DAILY!!! 202-224-3121

  • Carl Stevenson

    It’s past time for people to refuse to feed the beast at a, let alone any more.

  • caldude

    So instead of land staying with one family for generations (part of the American Dream, apparently being killed by the administration and those who support socialism), it is better for multinational businesses to own the land forever? Where is the incentive to produce or save anything to leave for future generations? Oh, I forgot, this kind of wrong-thinking stops people from needing/wanting to be cared for by the nanny-state which is Soros way…

  • Mudpuppy

    The government won’t be able to confiscate money from those that amass large amounts (of money and land) that THEY worked hard for to provide for their posterity if the death tax dies? Oh, the horror!! Too bad. They need to learn to live within their means just like the rest of us. Obama’s “compromise” is nothing of the sort. Typical liberal Democrat falderal. If you think it won’t affect you, you’ve got another thing coming. It doesn’t take much to have an estate over $1 million these days.

  • http://www.facebook.com/people/Bob-Marshall/100001163952013 Bob Marshall

    What we need is a revised and more simple tax code.

  • joepotato

    It’s a tyrannical tax and should be gone. That’s why this saying holds true; don’t steal, the govt hates competition.

  • http://twitter.com/Always_On_Watch Always On Watch

    A $1 million exemption is ludicrously low!

    Why is there is any death tax at all? Taxes on most assets have been paid over and over again!

    Think about it. Why should dying result in a special tax? After all, the heirs aren’t really earning one red cent.

    The real purpose of a death tax: to promote the redistribution of wealth. Milton Friedman addressed that topic years ago, and he was correct in his assessment.

  • hlk

    We have a Living Trust registered and beneficiaries are named. We pay taxes while we are living and the government should not be able to steal the money from our children.

  • http://www.survivingurbancrisis.com/ Silas Longshot

    Death tax. Wealth tax. Thumb tax. Brass tax. Those out there who are fortunate enough to have such holdings better get smart with your tax lawyer to get around this, or everything you busted hump for for all those years is all for nothing. Sell it to your kids for 10 cents on the dollar, do ‘gifts’, whatever it takes.

  • robert craft

    about the death tax and all the other tax on the American people.when will the people wake up to our politicians,they sit up there and think up any thing we haven’t been taxed on and make it a law to tax us. and they make the laws to beneficent them selves.and what do they do with our tax money?first get a big pay check and the best benefits in the world.and then give our tax money to foreign country’s that hate us and want us dead.when the people realize this maybe we will get our country back.