Senator Bernard Sanders (I-VT) and four co-sponsors have introduced a bill that would retroactively return the estate tax to the 2009 exemption level of $3.5 million with a progressive tax rate structure starting at 45% with a 10% surcharge on billionaires.
The debate started last March following the death of Texas pipeline mogul Dan Duncan, who died at 77 with an estimated net worth of $9 billion, ranking him as the 74th wealthiest person in the world. Under the Sanders proposal, that $9 billion would generate billions of dollars in government revenue.
Lawmakers had a chance to fix the estate tax several months ago, saving Duncan and Steinbrenner’s heirs millions, in a proposal that would have given Republicans just about everything they asked for, including a $5 million exemption rising with inflation and a maximum of 35% maximum rates. But because of party bickering, lawmakers couldn’t agree—and here we are.
Public outcry over billionaire dying tax-free makes great political theater, matching the fuss created in 1995 when President Bill Clinton and Congress plugged the expatriation loophole that let billionaires like Ken Dart escape U.S. estate taxes by renouncing their citizenship and moving to Belize.
Some of the strongest outrage has come from Congress itself. When asked to summarize Senator Sanders’ position, aide Michael Briggs pointed me to a speech he made the day Steinbrenner died.
“We have a situation now where the very wealthiest people in this country are seeing that when someone in their family dies, the estate tax is zero,” the senator said, concluding with “In my view, it is immoral it is unfair that while the middle class struggles to survive, millionaires and billionaire’s get tax breaks.”
At least Sanders' position as an independent is consistent, as he was one of the 154 "nay" votes in the House of Representative against EGTRRA back in 2001. But there were 11 Democratic "yea" votes in the Senate, where the bill passed 58-33 (two Dems "present" -- cowards; and 7 "not voting" -- 5 Dems / 2 Reps -- all bigger cowards).
So while the Democrats still have control of Congress (at least until the end of the current session -- November will tell the tale for the near future), it may be that the "unlimited exemption" from estate tax in 2010 is slated for extinction.
What Congress giveth, apparently Congress can taketh it away, if it means that sour grapes can be pressed into a retroactive taxation whine.
Can the tax-free status of the Roth IRA also be in jeopardy? Probably have to wait another 30-50 years, for the day when the first Roth Billionaire wants to throw a really big, tax-free, party.
The moral of the story is, simply: Politicians . . . can't live with 'em, can't govern without 'em. Estate planning . . . can't die without it.[/b]
Posted: Mon Aug 02, 2010 04:50 pm Post Subject:
Public outcry
Excuse me, but do I hear anyone outside Congress complaining about this?
Estate taxes should have been done away with once WW I was paid for, same as it was the three previous times it had been imposed.
Today, it's just another pile of money that the politicians have said, to themselves, "You can look, but you can't touch." And they cannot control the incessant urge to touch.
Eve would probably have been a politician if she could have worked outside the home.
Posted: Tue Aug 03, 2010 12:14 pm Post Subject:
Here's the thing, and this isn't some Bernie Sanders hoorah! parade because I've never voted for the guy and have donted to campaigns run against him.
As a nation, I think we need to come to grips with this concept and how it works. We like to quote the constitution and we love to talk about the Founding Fathers, but they (at least pretended) to love the idea of being born and dying with nothing.
Remember one of the original premises behind the revolution was to live in a country where wealth and power (the aristocracy) didn't rule. So to them, one could easily argue that the estate tax is a very American thing, one need not look much further than the Federalist Papers themselves to determine the stamp of approval many of them would have placed on this idea. Take note and take heart when I say I am very aware that there were Founders who wondered quite far from these ideals and so not all where on the same page.
The problem isn't so much the tax, it's relatively easy to address Max as you and I know very well. It's the shear size of our current government and the way in which it almost acts as a profit maximizing institution through it's incessant want to collect higher tax revenues.
Why do we have a department of education at the federal level? It accomplishes nothing. Seriously, education has for every been primarily controlled at the state level. Not until the creation of No Child Left Behind have we seen such a sweeping measure at the federal level, and I don't know too many people who are in love with that piece of legislation.
If government were small and weak enough to be drowned in the bath tub I doubt it would be capable of amassing the huge debt we currently have, and it certainly wouldn't need to collect all the taxes it does.
I think step one would be ripping all of the air conditioning units out of the Congress and all Congressional offices. That's what got them to spend more time in Washington in the first place. Then we can significantly reduce their budgets for staff. When they start complaining that they can't get as much done because they don't have the resources, the answer from us will be "exactly." ;)
Posted: Tue Aug 03, 2010 05:49 pm Post Subject:
It's the shear size of our current government
And most of the states are following in the dreadful footsteps of those in DC.
California is not the only state with a financial crisis, but here, the rhetoric is a constant din of "WE NEED MORE REVENUE" (they learned some time ago that the public generally doesn't understand that REVENUE = TAXES), without the least regard for the alternative, "WE NEED LESS GOVERNMENT / SPENDING", and refuse to work in that direction.
Aside from the air conditioner suggestion (which also surfaced here last year when the Legislature was, as always, unable to create a budget on time . . . lock 'em in chambers -- no AC, no food, no showers -- and see how long it takes to come to an agreement . . . was frequently heard on a variety of talk radio programs, liberal and conservative alike), if we actually had persons with true experience as a business owner or entrepreneur in these offices, it could lead to more sound thinking and rational approaches to governing.
Your absolutely right that the Federal Government has expanded into areas, such as education, where it had absolutely no business going. But try to get them to reverse course? Impossible.
No business would operate in this manner. If a product line proves unprofitable or no longer necessary, it is cast off and the resources it once consumed are turned to more useful purposes.
We've allowed ourselves (well, not 100% of us, but collectively) to become attached to "entitlements" and when something needs to be done, rather than take personal responsibility, we expect government to do it for us. This is not just a matter of becoming couch potatoes, but becoming mashed couch potatoes.
Although I hate to even say it, sometimes I think we are on the cusp of witnessing the decline and fall of the American "empire."
Posted: Tue Aug 03, 2010 09:17 pm Post Subject:
Well, it doesn't take a nobel laureate economist to tell us that we've got problems when the average government employee earns more than the average private sector employee.
We're are headed down the path to failure, hardcore. The biggest problem we face are those who suggest we need to maintain the status quo because fixing the problem will cause other problems. It's like the cancer patient who doesn't want to undergo chemo because he doesn't want to feel tired and lose his hair, so he'd rather stay on course for doomsday.
Posted: Tue Aug 03, 2010 11:19 pm Post Subject:
those who suggest we need to maintain the status quo because fixing the problem will cause other problems
This is exactly the argument the Justice Department used in its motion for the injunction against Arizona's SB 1070, which required law enforcement agencies to use Homeland Security's E-Verify Internet-based immigration status check system. The "government's" statement in its filed motion was, according to Federal District Judge Susan Bolton:
the influx of requests for immigration status determination directed to the federal government or federally-qualified officials would “impermissibly shift the allocation of federal resources away from federal priorities.”
This is the government saying, "Uh, illegal immigration? No . . . uh . . . it's not one of our priorities."
Funny, but we don't hear any Homeland Security outcry about the 12,000,000+ E-Verify requests that have not in any way hindered the system in the first 6 months of 2010, compared to 9,800,000 E-Verify requests in all of 2009.
How many requests would Arizona law enforcement agencies have added to the system per year? 30,000 to 50,000 maybe? Hardly a dent.
Our "government", at the hands of the bleeding hearts, has lost its mind, its moral compass, and its credibility around the world.
Posted: Wed Aug 04, 2010 03:06 am Post Subject:
hahahah! Wow, Max, a topic you and I can agree on. :lol:
Posted: Wed Aug 04, 2010 06:25 am Post Subject:
BNTRS . . . I honestly believe we are much closer in opinions on most topics than you may think. Sometimes I think our "differences" are more philosophical than technical. Regardless, I enjoy the sparring when it occurs. :P
BTW . . . it looks like Obama and the Democrats are going to let the Bush-era EGTRRA income tax cuts expire "naturally." Passively reneging on his pledge not to raise taxes on families earning less than $200,000, as families with $175,000 AGI are cast into the 31% tax bracket, reducing their monthly income by as much as $400, he'll be able to say, "I didn't raise taxes on the middle class," which we all know is the coward's way of saying, "I never intended to block it from happening."
(Congress does the same thing with their pay raises. They have to vote "NO, I'm not going to accept an automatic pay increase this year (which occurs whenever they vote to increase federal judges' pay)." They get the pay raise, and can go back to their districts and say, with a straight face, "I did not vote for any pay increase for Congress." And their constituents blindly say, "Well, I knew he was a stand-up guy after all.")
I may have posted this elsewhere in the past, but my brother-in-law occasionally jokes, "I'd pay bin Laden to take out Congress when they're all in the same room listening to the President's State of the Union address. It's probably the only way we could ever get rid of them all at the same time."
But that also reminds me of a conversation I had with the Production Manager of the factory I toiled in in the '80s while working on my MA degree, when he asked me in the privacy of his office (I'd only been there about 5 months), "Do you think we have a few jerks working here?" I said, "Yeah, I think there probably are a few." He replied, "I learned a long time ago, that every time I fire one jerk, we end up hiring three as their replacements." Another one of those "status quo" concessions I didn't buy then, and I still don't buy today.
I just feel sorry for the younger generations who will inherit the mess we once-liberal baby boomers (most of whom came to our senses later on in life) allowed to happen and now can't seem to correct.
Posted: Wed Aug 04, 2010 09:31 pm Post Subject:
I think the big story on the expiration of the Bush tax cuts is going to be at the lower income levels. We will see the 10% bracket dissapear, and they all slide up slightly with the exception of the 15% bracket.
It'll likelt reduce some AMT exposure as many see their regular federal rates jump up beyond the AMT rate.
I believe you are right to suggest both he (Obama) and Democrats in the congress will blame that one the Republicans in an attempt to say they did not act appropriately for the years that they were in control. I think they are going to lose hard come this next election, and again even harder in 2012.
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