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December 31, 2003
Drat

I thought I was done yakking for the day. Honestly I did. I shouldn't have gone blogging around to see what others were talking about.

The problem with articles like this one (Via Avedon Carol) is that it doesn't distinguish between different kinds of "wealth." It's all money, you see. All stuff owned by rich people who are worthless parasites and whose family estates should be taxed at 90% or something, so down with 'em all and let 'em get real jobs!

That attitude drives me nuts.

An "estate" just isn't that easy to define and pigeonhole.

Among that tiny 5% or 2% or whatever it is of USofA citizens whose estates get hit by "estate taxes" are a lot of people that readers of this blog would consider "poor" or at least "average," okay? Owners of farms where the price of real estate has pushed the value of their land to millions and millions of dollars, but who owe corresponding millions to banks and equipment manufacturers. People struggling to live off of land that's been in their family for generations and who are still, year after year, teetering on the edge of bankruptcy - saved or doomed by a 5 cent or 10 cent difference in the price of corn from one season to the next.

Some of those family "estates" are ranches, too. (I don't want to hear horror-mongering about BSE and how the ranchers want to loosen regulations so they can feed us all diseased meat, okay? Don't be stupid. If we all get sick, no one eats beef, and they go out of business, so it's counterintuitive to believe they're deliberately sabotaging the food supply. Besides, owning a ranch is not a pathway to wealth. Again, they have a lot of land that's ostensibly worth a lot of money, but they owe millions and something like the current BSE problem can push the price of meat down to where, no matter how honest and upright the rancher is in his dealings, he goes bankrupt.) They have the same problems. Five or ten cents difference in the price of meat from one year to the next can put them on the streets. Ditto an estate tax. If the primary "owner" of the land dies, the family has to go into debt to pay the tax or lose the ranch. (Remember, their "wealth" is in land. They don't have money in the bank.)

Anyhow. There are a few Rockefellers and some Bushes and the like. So what? So what if they have millions inherited from the profits of manufacturing or something?

It's the freaking American dream, right? Do we want to tax these people because we think inherited wealth is iniquitous or because we're jealous that our ancestors weren't that successful?

It's not that I am against an estate tax. I just think the term is too broad. I can sympathize with wanting to keep the bad guys of the world from inheriting enough money to do damage with, but what about the guy you never heard of who comes from a family with the same amount of money as, for instance, the Cheney family, but who spends 20% or more of his annual income on charitable concerns? Would you rather let him send money to the Red Cross and donate some to libraries and museums, or would you like take the money and give it to the government who will use it to build another bomb?

Not all inherited wealth is misused, not all people who inherit wealth are unworthy, and the idea of taxing someone just because they didn't spend everything they made while they were alive annoys me.

(Of course, I'm not necessarily against an estate tax. Okay, mostly I am. But I could support the concept if there were some way of distinguishing between a character-sapping, morality-erasing amount of loose bills and "wealth" that's tied up in real property and consequently not available to spend funding recall elections in ways I don't personally approve.)

Posted by AnneZook at 09:49 AM


Comments

Got any evidence of this? Because as far as I can tell, this is simply not true.

The defenders of estate tax repeal always SAY that the tax affects working farms and small(ish) businesses, but they NEVER cite even a single example of one. Why? because there simply AREN'T any real world examples.

There are already provisions in the existing estate tax code that effectively exempt family owned farms and businesses, and there are certainly ways of fixing the holes in those provisions if needed.

You need to cite real people, who really were affected by the estate tax, to be taken seriously. Handwaving about the way you think the law works just ain't gonna cut it, because the law doesn't work the way you think it does.

Posted by: Bones at February 2, 2004 05:51 PM

Do I know people who have nearly lost family farms because of estate taxation? I do.

Am I going to give you their names to prove there are 'real world' examples behind my opinions? I am not. I don't have their permission to advertise their names or their personal situations on the internet.

Posted by: Anne at February 3, 2004 08:39 AM

Sorry, Anne. Your recitation is not based on fact. Any farm worth millions that was encumbered with big mortgages would pass to the new generation with the mortgages taken into account. In other words, only the equity would be taxed.

In addition, the estate tax is purely voluntary, because it is so easy to get around. Based on the normal mechanisms known to any local lawyer, any estate that pays the estate tax most likely belonged to a dead person who simply chose to pay it. Moreover, no estate worth less than $1 million has to pay any estate tax. And, estate tax is owed only on any amounts over $1 million.

See: http://www.irs.gov/businesses/small/article/0,,id=98968,00.html#unified

Anne, you've fallen for a line here.

--LB

Posted by: Lead Balloons at February 3, 2004 10:17 AM