John Robb's Radio Weblog is reporting about Dan Gillmor's article about the Inheritance Tax. Class warfare, Bush style. I agree with Dan on inhertance tax debate. It's shameless to push for a repeal. Instead, a moderate increase of the gift limit to $3m from its current $1m level would be a good thing. Further, it should also be indexed to inflation so we don't need to revisit this again. I am certainly not for repealing the tax for the 3,000 people a year that would be above this revised limit. It's worth $10b or more in tax revenues. It also represents a chance to reclaim some of the money Eisner, Lay, Winnick, and others pilfered from their companies over the last five years.
Class warfare my ass! Excuse me guys while I peek my head out from my self imposed rock recently to give you another point of view.
The US Federal Inheritance Tax is a very unfair. Not everyone inheriting a sizable estate is a Gates or Eisner. The bulk are families of small to mid-sized businesses and farms who are left to pay. Also nearly everyone forgets that many states also tax inheritance as well. So not only do you get hit once by the State and Federal Government when your family made the income, you get hit again by the Fed's and the State at death. The sum total due-- once you, your attorney and accountants finally figure the final tally can be staggering, especially if you are the one left to write and sign the checks. [NOTE: Pay lawyer, accountant, funeral expenses, court costs, appraisers, bank and transfer fees, and then pay the State and IRS.]
Trust me, it is a real g*d damn Zantac moment!
A majority of the crap written about it being a bill for only the rich is nothing but total bullshit. Plain and simple. How would I know? I've seen it happen more times than I care to mention. And oh yes-- no one paying is really rich. What they accumulated is valuable. But it isn't liquid.
Take for example the value of a Midwestern family owned farm. 2500 acres valued at $3500-4000 an acre = $1 Million. Add to that the value of feeder cattle, hogs, grain, tractors and other equipment can be in excess of another $1-1.5 Million. Add to that the value of the buildings, barns, silos and home, and you can add another $1 Million real fast. So a quick total is over $3-3.5 Million, and you've only got $20,000-30,000 in the bank. Unless there is life insurance to cover the taxes, which most farmers can't afford, the surviving members in the family are faced with having to sell all or a major portion of the family farm just to settle the tax bill. Is this what you really want?
Oh yes and by the way-- the buyer ends up being some damn corporate farming/food company who wants to be the supermarket to the world by gobbling up the land to expand their food/farming operation inwhich they gain a larger and larger portions of the land and eventually deeper control of the food costs you will pay. Is this what you really want?
Most of the pro-inheritance tax people do not understand the Inheritance Tax is double taxation. Most family businesses and farms aren't flush with cash in the first place. They paid taxes the first time when they made their money. The owners and families are normally busting the collective butts to make ends meet, pay employees, benefits, taxes, insurance, loans and other costs of business. They all ready donate to good causes and local churches/charities, especially if they are in small to mid-sized towns as part of being a good citizen. So don't even go there on that subject.
Inheritance is something given to heirs to allow the hard work and good fortune of one generation to be passed on to another generation. Most of the children of these estates continue on working the businesses or farms they inherit. They try to normally emulate their parents by continuing the family traditions by building more business and paying more taxes. And yes, they donate to good causes. The kids aren't instantly flush with cash, nor are they going to endow a chair at a major ivy league university, but they will give to the causes that fit their idea of what is going to do the most good.
So what the hell's the problem with that?
