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Sun 18 Sep, 2005 10:41 am
TIME Magazine
Saturday, Sep. 17, 2005
Looking for a Corpse to Make a Case
Senators look for a wealthy casualty of Katrina as evidence against the estate tax
By MASSIMO CALABRESI
with reporting by Amanda Ripley/Washington
Federal troops aren't the only ones looking for bodies on the Gulf Coast. On Sept. 9, Alabama Senator Jeff Sessions called his old law professor Harold Apolinsky, co-author of Sessions' legislation repealing the federal estate tax, which was encountering sudden resistance on the Hill. Sessions had an idea to revitalize their cause, which he left on Apolinsky's voice mail: "[Arizona Sen.] Jon Kyl and I were talking about the estate tax. If we knew anybody that owned a business that lost life in the storm, that would be something we could push back with."
If legislative ambulance chasing looks like a desperate measure, for the backers of repealing the estate tax, these are desperate times. Just three weeks ago, their long-sought goal of repeal seemed within reach, but Katrina dashed their hopes when Republican leaders put off an expected vote. After hearing from Sessions, Apolinsky, an estate tax lawyer who says his firm includes three multi-billionaires among its clients, mobilized the American Family Business Institute, a Washington-based group devoted to estate tax repeal. They reached out to members along the Gulf Coast to hunt for the dead.
It's been hard. Only a tiny percentage of people are affected by the estate tax?-in 2001 only 534 Alabamans were subject to it. And for Hill backers of repeal, that's only part of the problem. Last year, the tax brought in $24.8 billion to the federal government. With Katrina's cost soaring, estate tax opponents need to find a way to make up the potential lost income. For now, getting repeal back on the agenda may depend on Apolinsky and his team of estate-sniffing sleuths, who are searching Internet obituaries among other places. Has he found any victims of both the hurricane and the estate tax? "Not yet," Apolinsky says. "But I'm still looking."
This is disgraceful.
Are they Democrats unable to make a very simple argument for keeping the Estate TAx that they have to take this route?
woiyo wrote:This is disgraceful.
Are they Democrats unable to make a very simple argument for keeping the Estate TAx that they have to take this route?
I don't think there are simple arguments to be made for keeping
any tax. The simple arguments are made by the people who want to eliminate them.
I've got a great solution for the Estate Tax. Talk about simple!!!
Make it optional. That way, all the democrats who think taxing a person's estate is an excellent way to raise money can pay the tax, and those of us who think it is a crime to tax an estate (since the vast majority of the value has already been taxed once) can opt out.
See, there is always a solution if you think about it.
CoastalRat wrote:I've got a great solution for the Estate Tax. Talk about simple!!!
Make it optional. That way, all the democrats who think taxing a person's estate is an excellent way to raise money can pay the tax, and those of us who think it is a crime to tax an estate (since the vast majority of the value has already been taxed once) can opt out.
See, there is always a solution if you think about it.
Excellent solution! I'm sure you'd also propose that we make paying for reckless foreign wars optional as well.
As for the myth of "double taxation," that's about as simplistic as arguments get. Although the bulk of a person's estate may have been taxed before, it wasn't a tax paid by the
recipient. Estate taxes, after all, aren't paid by the estate, they're paid by the heirs, so estate taxes are pretty much like taxes on ordinary income: paid when transferred. My employer pays taxes on its income, and I pay taxes when I receive wages from my employer. Does that mean that I'm being "double taxed?" Hardly. The same goes for estate taxes: just because the deceased paid taxes on income doesn't mean that the heir shouldn't have to pay taxes on it when it is transferred in an estate.
How about this: Estate taxes keep things simple, because you don't have to know the cost value of every asset that is passed on; you only have to know the cost value at the time of transfer.
Otherwise, you have to know the cost value of every purchase of every asset that one inherits.
Unless, of course, you want to cheat the federal government.
I believe your analogy is incorrect since your employer does not pay taxes on wages paid to you. That is a deductable item for the employer as far as corporate taxes go. (Now admittedly, the employer does pay social security tax on wages paid, but that is a different animal than the one we are discussing)
Didn't the GOP recently go looking for a corpse in order to push through one of their agendas? Terri I think her name was.....
Oh, I forgot, as far as your question about paying for a war being voluntary, you are simply trying to throw out another red herring. We were not talking about what is to be paid for with validly collected taxes, only what taxes should be valid. Try to keep on just one argument. It makes things so much easier.
joefromchicago wrote:woiyo wrote:This is disgraceful.
Are they Democrats unable to make a very simple argument for keeping the Estate TAx that they have to take this route?
I don't think there are simple arguments to be made for keeping
any tax. The simple arguments are made by the people who want to eliminate them.
If you understood the history of the Estate TAx, when it was enacted, and more importantly WHY it was enacted,you would understand why it is a very simple argument to make and once made, 99% of the people would support keeping the tax.
The estate tax rewards investing since it resets the cost value of assets. A few people pay taxes, so the rest of society has an easier time with the transferred assets.
Alternately, everyone could just pay capital-gains tax at the time the assets are transferred in order to reset the cost value, but again that requires knowing the original cost value of the assets.
woiyo wrote:joefromchicago wrote:woiyo wrote:This is disgraceful.
Are they Democrats unable to make a very simple argument for keeping the Estate TAx that they have to take this route?
I don't think there are simple arguments to be made for keeping
any tax. The simple arguments are made by the people who want to eliminate them.
If you understood the history of the Estate TAx, when it was enacted, and more importantly WHY it was enacted,you would understand why it is a very simple argument to make and once made, 99% of the people would support keeping the tax.
So why don't you educate us? Or are you so partisan that you can't break from the party line on any issue?
CoastalRat wrote:I believe your analogy is incorrect since your employer does not pay taxes on wages paid to you. That is a deductable item for the employer as far as corporate taxes go. (Now admittedly, the employer does pay social security tax on wages paid, but that is a different animal than the one we are discussing)
Let's say that Fred Millionaire hires his nephew, Carl, to do yard work around the palatial summer home. Fred pays income tax on the money that he earns, and part of the money that he keeps goes to pay Carl, who, in turn, also pays taxes on his wages. Fred then dies and bequeaths his entire estate to Carl. Now, how is the transfer of money to Carl in the form of an estate any different from the transfer of money to Carl in the form of wages, except for the circumstances of the transfer? In both cases Fred initially paid taxes on his money, and in both cases Carl paid taxes on whatever he received from Fred at the time of the transfer. Carl didn't pay taxes twice on his wages any more than he would pay taxes twice on the estate: in both cases he would pay taxes just once, when he received the money. So why should estates be treated differently from wages?
CoastalRat wrote:Oh, I forgot, as far as your question about paying for a war being voluntary, you are simply trying to throw out another red herring. We were not talking about what is to be paid for with validly collected taxes, only what taxes should be valid. Try to keep on just one argument. It makes things so much easier.
Sorry, I thought you could understand that I was focusing on the
voluntariness aspect of your proposal. I'm well aware that you were talking about revenue raising while I was talking about expenditures, but I see no reason why, if one is voluntary, both shouldn't be.
woiyo wrote:If you understood the history of the Estate TAx, when it was enacted, and more importantly WHY it was enacted,you would understand why it is a very simple argument to make and once made, 99% of the people would support keeping the tax.
I don't know the history of the tax and I
still support it.
Quote:I've got a great solution for the Estate Tax. Talk about simple!!!
Make it optional. That way, all the democrats who think taxing a person's estate is an excellent way to raise money can pay the tax, and those of us who think it is a crime to tax an estate (since the vast majority of the value has already been taxed once) can opt out.
See, there is always a solution if you think about it.
We've had the Estate tax for a long, long time, for a very good reason; it is the greatest defense against the creation of a permanently noble class here in America.
The concept of passing an estate, untaxed, along to one's descendants is the definition of the noble class; and do you really think that we need that here in America?
I have zero pity for those who have to pay estate taxes, even if they are considered to be double taxes; we're talking about the extremely affluent, after all. They don't need the money as badly as the society who allows them to reach such heights of financial success needs the money in order to keep functioning in a responsible manner.
The idea of cutting taxes to increase revenue, is, of course, a false canard; every year since 2000 revenues have dropped....
Cycloptichorn
DrewDad wrote:woiyo wrote:joefromchicago wrote:woiyo wrote:This is disgraceful.
Are they Democrats unable to make a very simple argument for keeping the Estate TAx that they have to take this route?
I don't think there are simple arguments to be made for keeping
any tax. The simple arguments are made by the people who want to eliminate them.
If you understood the history of the Estate TAx, when it was enacted, and more importantly WHY it was enacted,you would understand why it is a very simple argument to make and once made, 99% of the people would support keeping the tax.
So why don't you educate us? Or are you so partisan that you can't break from the party line on any issue?
http://www.ncpa.org/oped/bartlett/jul1900.html
While the above does a faily good job at explaining how the tax evolved over time, it is clearly a social tax to avoid the risk of concentrated power and wealth in the hands of a few, something the founding fathers wanted to avoid, which is why they wealthy were selected to fund the first tax ever assesed in this nation.
It is for this reason that I would never support a repeal of the Estate Tax stystem.
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