The propagandists fronting for Big Ag like to tell you that the estate tax is a death tax that threatens to put family farmers out of business. Horse hockey. Rep. Earl Pomeroy from North Dakota sponsored HR 4154. We might expect a North Dakota Congressman and Ag Committee member to know a thing or two about the impact of taxes on rural America. As Rep. Pomeroy points out, HR 4154 actually eliminates the estate tax for 99.75% of Americans.
Of course in South Dakota, And a South Dakota reality check:
In 2003 when the exemption amount was $1 million, only 50 of the 7133 decedents in South Dakota had estate tax liability – 99.8 percent of decedents paid no estate tax [Coalition for America's Priorities, "Estate Tax Information: South Dakota," retrieved 2009.12.05].
The exemption in HR 4154 is $3.5 million. For couples (like the moms and pops running family farms), it's $7 million. Now if Pat can show me his slice of the real estate business is worth more than $3.5 million, then he's got a gripe. If Troy and Stacy can show me their operation is worth $7 million, then they've got a gripe (although they can make $2000 a pop just to do that griping in front of an audience).
And remember: without Congressional action, the estate tax will be replaced next year by a capital gains tax that will hit ten times as many estates.
Gee, sounds to me like SHS and the Dems are doing a lot of family farms and small businesses a favor... unless, of course, your definition of family farm and small business includes the Stips, whose machinery alone can sell at auction for over $5 million dollars.
Nice report. This amount is very reasonable (3.5M) for families to hold on to a significant portion of their estate without any tax. Of course the same old rich Republicans don't want to pay a dime.
ReplyDeleteJohn Kelley
ReplyDeleteThanks for helping set the record straight, Cory. There is no example, not one, of a farm or ranch or small business having to be sold or broken up to pay the estate tax.
Complaints about the estate tax are Tory-throwback whining of the top 1%.
This is actually a long-term tax cut, isn't it?
ReplyDeleteIf Congress had taken no action, wouldn't the estate tax threshold go back to its original, much lower level, in 2011?
Someone correct me if I am wrong.
In my opinion, SHS and the Democrats got this one right.
Now if only they could find a cure for the common cold ... sniff ... snooff ...
"sales tax on food or clothing, which is a double tax on the money we've already worked hard for and paid our fair share of income tax for."
ReplyDeleteANY tax we pay is a double tax on our earned money if we follow the line of thought in your statement above, Cory. Does that mean we shouldn't be paying any taxes at all?
Just pointing out the fallacy of the above quote. Based on that, I should not pay gas taxes, property tax, tax on repair services, county assessments, etc.
And what about the majority of people who pay NO income tax? And on top of that get a check for thousands back from the gov't for earned income credit, housing subsidies, child care subsidies so they pay nothing for child care, food stamps, heat assistance, etc? This is true double dipping - pay essentially no taxes and get money back!
"ANY tax we pay is a double tax"—well, Linda, that seemed to be the line of reasoning the DWC commenters were following. You should go point out to them their fallacious reasoning.
ReplyDeleteOh yes, and all those villainous ne'er-do-wells who get our help. We should just stop helping people. That would make America better, wouldn't it? but if we got rid of those people, whom could we scapegoat for all our problems?
Stan: thanks for not sneezing on the blog. And yes, I think you're right: HR 4154 looks a lot more like an effective tax cut, with fewer people paying taxes than would have otherwise.
ReplyDelete"There is no example, not one, of a farm or ranch or small business having to be sold or broken up to pay the estate tax."
ReplyDeleteI heard the Stip auction was to pay the estate tax. Is that true?
JohnSD:
ReplyDeleteExodus 20:17, “Thou shalt not covet thy neighbour's house, thou shalt not covet thy neighbour's wife, nor his manservant, nor his maidservant, nor his ox, nor his ass, nor any thing that is thy neighbour's."
"We should just stop helping people."
ReplyDeleteI think You and JohnSD are in favor of the rich being made to help people so you don't have to.
So what, Steve, should we impose a flat estate tax on everyone?
ReplyDeleteFor years the estate tax was $675,000, double that for married couples with a trust until these last few escalating years with no tax in 2010. As Stan said if congress doesn't come up with something it reverts to 1M in 2011.
ReplyDeleteThe gossip: Someone told me the Stips purchased all that equipment which was rarely used to offset income and avoid income tax. If true, it was their tax strategy and not a hardship sale.
Sibby: I do believe an escalating tax rate so the wealthy pay more. Left unchecked, the greedy FreedomWorks types would be happy for us to become serfs. If ever became filthy rich I probably wouldn't want to pay either, but we need to keep a middle class. No?
JOhn,
ReplyDeleteLike we learned on teh farm subsidies issue, it is the government who is creating serfs and are a danger to the middle class.
"I think You and JohnSD are in favor of the rich being made to help people so you don't have to."
ReplyDeleteSteve, how in the world would you know what kind of charitable contributions/volunteering Cory and John do?
Just like Cory implying that I and conservatives don't want gov't to help those who truly need help. He has no idea what we donate to charity. What we do not want is the gov't to make more people dependent on it under the guise of helping those same people.
ReplyDeleteNo, not just like that, Linda. I didn't ask what you donate to charity. What was your point, anyway, about folks who receive government assistance, if not to villainize them and distract from the point, that SHS did a good thing by voting for this estate tax reform bill? Or do are the nearly universal exemptions from the estate tax another bad government policy "under the guise of helping those same people"?
ReplyDeleteWasn't the estate tax originally conceived with the goal of preventing, or at least reducing, the evolution of "dynasties" where well-to-do families could accumulate obscene amounts of wealth over time?
ReplyDeleteOf course, it hasn't completely worked. Schemes exist by which those with massive estates can largely escape the intended effect of the tax.
That said, the bill still must get through the Senate. I hope they'll include a provision (if one doesn't exist already) to index the threshold amount to inflation. In a couple of generations, USD 3.5M might not amount to all that much.
As for serfdom, it seems to me rather like death. If Dick kills you or Jane kills you, does it matter much in the end? You are equally dead either way. If the corporations enslave me or the government enslaves me, does it matter much in the end?
Shouldn't society strive to prevent either corporate or government feudalism from evolving? Unfortunately, some unseen force seems continually to steer humanity in one or the other of those two unsavory directions.
At least this bill puts a damper on the one evil without building a fire under the other.
That's the idea, Stan. The estate tax seems to be the government's version of the Warren Buffet philosophy: spread the wealth, and expect the grandkids to make their own money rather than living off the estate. If you grow up in a wealthy family, you already get a leg up on the rest of society, with better education, better health care, better networking, etc. Buffet doesn't think he needs to leave his descendants millions to play with. The estate tax on the wealthiest keeps the economic pot stirred.
ReplyDelete