November 21, 2017

"Only morons pay the estate tax" is a reason (if it's true) to get rid of the estate tax.

It may sound rude, but it's memorable, and it makes a point. Gary Cohn, Trump’s chief economic adviser, said it and also resaid it more politely: The estate tax is only paid by “rich people with really bad tax planning.”

The NYT has an editorial about it, in which it uses the word "loopholes" to refer to the provisions of the tax code that allow for the avoidance of the estate tax, and "windfall" for what Cohn's "morons" would get if the estate tax were repealed.

I'm tempted to ask Why doesn't the NYT care about morons? Shouldn't the law protect those who lack the intelligence to take steps to protect themselves? But I guess the NYT would say that the rich who are doing intelligent tax planning are bad people, and the rich who are exposing themselves to the estate tax are good people. No need to give a "windfall" to the good rich people who decline to use the tax avoidance provisions (the "loopholes"). Let's just give them a pat on the head and move on to denouncing the bad rich, the ones who aren't paying their fair share.

On the other side of the argument are Republicans who call the estate tax the "death tax" and stress that it hurts small businesses and farmers — including businesses owned by women and minorities.

The NYT says this characterization of who pays is wrong. It says (and see if you find this as hard to follow as I did):
So who actually does pay estate tax?... A few dozen farmers, and even fewer minority business owners. About 80 family farmers or small-business people would be subject to the estate tax this year, according to an analysis by the nonpartisan Tax Policy Center — a far cry from the “millions” Mr. Trump wrongly claims. The biggest winners in an estate tax repeal wouldn’t be struggling ranchers, minority contractors or mom-and-pop grocers. They’d be people like Mr. Trump’s kids, unless they’re …

Morons. “Only morons pay the estate tax,” Gary Cohn, Mr. Trump’s chief economic adviser, told Senate Democrats, meaning, it was later explained, “rich people with really bad tax planning.” Many of the very wealthy use loopholes, like trusts, to avoid paying inheritance tax. We don’t know where Mr. Trump’s kids would stand because Mr. Trump has never fulfilled his promise to publicly release his tax information.
First, how would "people like Mr. Trump's kids" be the "biggest winners in an estate tax repeal... unless they're morons"? Shouldn't it be the biggest winners will be people like Mr. Trump's kids only if they're morons? If they're not morons, they're already using the "loopholes." They have good tax planning. They don't need the repeal. The repeal is only needed by those who are too moronic to get tax planning. (Actually, it's not the heirs who do the tax planning. The question isn't whether Trump's kids are morons, but whether Trump is a moron.)

I guess that's just an editing screwup, where it seemed cute to connect those 2 paragraphs. The idea is: Don't think of anybody sympathetic. Exclude all the farmers and mom-and-pop people. Visualize those Trump kids. That's who you should think of the repeal as helping. Now, let's think about morons. The Trump kids, like a lot of rich kids, are probably protected by tax planning, but some of them are morons (or, really, have parents who are morons). Do you care? Trump-kid types sometimes get less money because of a moronic failure to do tax planning: Who wants to help them?! We're currently raking in revenue from these unsympathetic nitwits. Why is that a problem to be fixed? That's the argument that, I think, was intended.

Finally, let's look at the radical discrepancy between Trump's "millions" and the number 80 that the NYT used. The Times is referring (I'll assume correctly) to the number who become subject to the estate tax in a given year. Trump said he wanted "[t]o protect millions of small businesses and the American farmer." His set of persons is everyone who might ever be subject to the tax, dying over a period of many years, and including people who might not, in the end, have enough to be subject to the tax but just have to worry and make decisions under the influence of the tax and those who are under pressure to use the services of tax professionals because they've heard that to fail to do so is to be a moron. 

105 comments:

rehajm said...

The morons at NYT truly do not understand the estate tax, taxation or economics.

Laslo Spatula said...

Morons make up a large part of America, rich or poor.

Is our tax system so complex as to be unconstitutional under the 14th amendment?

Or would the Supreme Court find that having to pay an accountant is actually a 'tax'?

I am Laslo.

Cheryl said...

The windfall will be in the form of fees, currently paid by those subject to the tax, which will no longer be owed.

And also the insurance premiums which are part of the tax avoidance strategy.

So the Democrats are really protecting an income source of their donor class as far as I can see it. Shocking.

Rusty said...

Democrats despise the middle class, blacks and unborn babies. Why would anyone be a democrat?

Unknown said...

Democrats... worse than drugs.

Sebastian said...

The death tax is a form of class-warfare confiscation that results in a tax-avoidance racket. Get rid of it.

Ann Althouse said...

Some people are stingy about paying professionals to help them with their tax issues. I'd like to see tax reform that simplifies matters so that what you pay doesn't depend on whether you gave a chunk of your income to a professional to help you with your taxes. It's like a racket for the benefit of tax lawyers and accountants. It's repulsive to call people "moron" for not enlisting this help, paying this protection money, but I would like the government to collect the revenue, not these other people to make money saving people from having to pay taxes.

Treat us all as morons. That would be more fair. Make it equal as between morons and savvy connivers. It should be moron-proof, and it would be if it were simple enough.

rehajm said...

About 80 family farmers or small-business people would be subject to the estate tax this year

...repeal...would cost $239 billion in revenue over a decade.


Want a small number? Use a year. Want a big number? Use a decade.

Over the next century 8,000 family farmers will be subject to the estate tax.

Nonapod said...

nonpartisan Tax Policy Center

Always remember that just because an organization affixes the term "nonpartisan" in front of their name does not guarantee that they're not actually biased or without a political agenda or whatever.

It seems to me that the argument for not removing the death tax hinges on the supposition that the government will make economic better use of that money than the inheritors would, that the government would create more jobs or more beneficial economic activity? That seems absurd to me. Let's be honest here, this is about punishing wealthy people, nothing else.

Rusty said...

Unknown said...
Democrats... worse than drugs.


So many levels of irony in that simple statement. Lost on you because you honestly believe you're clever.

rehajm said...

It would cost $239 billion in revenue over a decade.

$24 billion against a budget of $4.1 trillion for 2018.

Lance said...

Morons are deplorable, I guess.

Laslo Spatula said...

"Treat us all as morons. That would be more fair. Make it equal as between morons and savvy connivers. It should be moron-proof, and it would be if it were simple enough."

Althouse at 9:37 aligns with my 9:30 post.

But she doesn't delve into the Fourteenth Amendment.

I think sometimes I get too scholary.

I am Laslo.

Mac McConnell said...

My experience is that most that pay to have an professional prepare their taxes is fear of the IRS.

mccullough said...

If Congress wanted to get more revenue and even the field a bit, they could limit the charitable deduction to the gift tax exclusion limit of $14,000 a year.

Michael K said...

The farmers and small business owners are the ones who get hit. The farmers, and many small business owners, have high net worth but smaller cash flow so are less able to pay for elaborate tax planning.

The inflation of the past few decades have pushed many people into the inheritance tax net. My younger son, who is a fireman,. now owns a home that is worth about a million dollars.

Only in California or New York City would such ridiculous inflation affect people who are not high income.

rehajm said...

How does New York Times feel about repeal of the New York City tax and New York State tax deduction? A: They don't like it.

Don't gore my ox.

Dust Bunny Queen said...

The morons at NYT truly do not understand the estate tax, taxation or economics

This is a true statement. Journalists, they literally know nothing!

The exemption for estate taxation (on the federal side) currently is so high that very few 'ordinary' people or even rather wealthy people will be paying estate taxes.

Current exemption For 2017, the estate and gift tax exemption is $5.49 million per individual, up from $5.45 million in 2016. That means an individual can leave $5.49 million to heirs and pay no federal estate or gift tax. A married couple will be able to shield just shy of $11 million ($10.98 million) from federal estate and gift taxes.

The use of family trusts is how you shelter the surviving spouse from paying estate taxes. An AB Trust arrangement has been common for decades.

Back when I was doing this type of business and the estate exemption was very low, so that many small business owners, farmers and people with highly appreciated real estate (in California) were getting caught in this estate tax trap. They were ordinary people who were unaware of the laws,rules and so called strategies (aka loopholes) that were available to help them out. We commonly used AB Trusts and Irrevocable Life Insurance Trusts as well as planned charitable giving in the form of Remainder or Lead Charitable Trusts...among other strategies :-)

Why shouldn't we use every tool available to save their hard earned assets from having to be liquidated to pay the government because you are DEAD.

When the exemption was about $500K or even under 1 million it was easy to be in an estate tax trick because that property you bought in 1970 for $30k is now worth several millions depending on where you live. OR the inherited ranch you got from your dead parents in 1950 is now worth millions of dollars through no fault or work of your own.

The estate tax is nothing more than robbing the dead and raping the living so the government can .....what? Get even for someone being successful or lucky?

Loopholes are not illegal. They are a part of the law. And yes. If you are not smart enough to use the law and the rules..you are pretty dumb or ignorant. Really rich people who may still be caught up in this robbery scheme, pay smart people to take care of this for them.

tim in vermont said...

Even Bernie Sanders used a real estate trust to pass on his summer home tax-free to his heirs, so they kind of have a point.

rehajm said...

The farmers and small business owners are the ones who get hit. The farmers, and many small business owners, have high net worth but smaller cash flow so are less able to pay for elaborate tax planning.

The problem is with farming all the capital is...the farm. To unlock the capital to pay the estate tax you have to sell the farm.

Kevin said...

Are you saying the NYT shades every part of an article on a topic to support its favored political position, such that those reading it believe anyone who doesn't agree with that position must be an uniformed ... moron?

Yes, this is one of the keys as to why blue staters find the rest of the country a bunch of deplorable mental midgets.

The NYT, now with IMPROVED SMUGNESS!(tm)

Dust Bunny Queen said...

Michael K: "The inflation of the past few decades have pushed many people into the inheritance tax net. My younger son, who is a fireman,. now owns a home that is worth about a million dollars"

Your son should still be just fine under the 'current' estate tax exemptions. However, if they (the morons in Congress) decide to eliminate the cost basis step up on death, his heirs may be in trouble. THIS is a bigger issue than estate taxes and affects many more people of modest means.

Example (real life, this is a relative's situation): Bought the house in CA for $40,000. This is the original cost basis. Current market value 2.5 million. Difference $2,460,000 in gain. Selling the property would be tax/cost prohibitive. Under current law her children would inherit the property at a stepped up basis meaning that their cost basis is NOW the current market value and should they decide to sell, the would only owe taxes on any gain from the 2.5 million market value.

People of modest means who inherit should be up in ARMS (literally) about Congress contemplating eliminating the cost basis step up on death.

robother said...

"Morons" are, as several here note, the folks who don't have the cash flow to pay for elaborate estate planning and all the trusts that entails: farmers and small businesses whose estates hit the estate tax levels based on fair market value that can only be tapped to pay taxes of tax avoidance upon sale. Typical of both NYTimes and a Wall Street Republican to denigrate such people as morons. Time to water the Tree of Liberty.

Mitch H. said...

The predatory class in this analysis are the estate planners, and more specifically, those who sell the products that the estate planners and tax lawyers use to hedge against the estate tax. Why is Warren Buffet so vociferously pro-estate tax, year in, year out? Because two-thirds of his empire and his fortune is built upon two of the forks with which the estate planners fend off the government on one side, and harvest their fees and windfalls on the other side. On the one side, Buffet sells the extortionately expensive business insurance policies by which mid-size family businesses protect themselves against the eventual death of their founders and/or patriarchs. On the other side, Buffet's famously voracious acquisitions division specializes in buying out stressed formerly-family-business operations who are under pressure to distribute their assets to the heirs of deceased owner-operators.

Why wouldn't Buffet be passionately defensive of the estate tax? It is the foundation of his success and his power. Likewise the 'professional class' of estate planners, tax lawyers, and accountants who likewise make their livings from this situation.

Rob said...

I've been greatly enjoying Laslo's posts over these many months, though often my reaction is, "Too scholarly."

Michael K said...

DBQ. Thanks. I was out of date on the current tax.

Robert Cook said...

Maybe what he's really saying is that no one pays the estate tax.

gilbar said...

isn't the left Always says: "To know even one life has breathed easier because you have lived. This is to have succeeded" ?

I know the left isn't great at math, but aren't '80 farmers' MORE than 'even one life'?

I guess to save one is a success, to save 80 is just a statistic

Ann Althouse said...

Laslo, the 14th Amendment doesn't apply to the federal government, but to the extent that there is an equal protection right against the federal government (under the 5th Amendment) it would not prevent the government from making classifications that allowed smarter people to do better than dumber people.

tim in vermont said...

Farmers around here drive around a lot of expensive equipment. They could set up trust for the price of a used Bobcat.

Ignorance is Bliss said...
This comment has been removed by the author.
Ignorance is Bliss said...

Only morons believe the Tax Policy Institute.

Their definition of a small business is one with less than $5 million in assets.

The government, via the SBA, defines a small business based on either annual revenue, or number of employees, and the size limits vary by industry. When based on number of employees, it is usually an upper limit of 500 to 1000 employees. I don't have a good feel for how those numbers relate to total asset value of the business.

For industries where small business is defined by revenue, the revenue cutoff can be as low as $750,000, but is usually in the $15-$30 million range. I'm no expert, but I doubt many businesses are generating $20 million in revenue on less than $5 million in assets.

(reposted to add second link)

Dust Bunny Queen said...

The problem is with farming all the capital is...the farm. To unlock the capital to pay the estate tax you have to sell the farm.

OR....they can plan ahead and set up a FLP . or FLLC Transfer assets from the elder to younger family members.

I think this is still legally an option. I haven't done this planning for about 8 years. This work requires several professionals. Lawyers, CPAs, Financial Planners and others.

Original Mike said...

"People of modest means who inherit should be up in ARMS (literally) about Congress contemplating eliminating the cost basis step up on death."

Eliminating the cost basis step up would make a horrendous tax compliance burden. What is wrong with these people? Simplification, my ass.

Pete said...

I agree with Dust Bunny's statement that the most egregious part of eliminating the Estate Tax is eliminating the stepped up basis. But without the Estate Tax, isn't there no need for the stepped up basis? The stepped basis is bringing basis to fair market value, to determine if Estate Tax is payable. No Estate Tax, no need for stepped up basis. What am I missing?

And in Dust Bunny's example, what's so cost prohibitive about paying capital gains tax - currently 15% - on the sale of inherited property? The heir doesn't have to sell to pay the tax - they can simply hold onto it - unlike another commenter's example of having to sell the farm to pay the Estate Tax.

I think taxpayers should pay as little tax as possible. But sometimes that's the price that's paid for success. Or luck.

robother said...

"They could set up trust for the price of a used Bobcat." Of course, no farmer has yet figured out how to get a trust to bust sod.

Roy Jacobsen said...

I have always believed the estate tax to be an immoral tax. Period. Nuke it from orbit.

Dust Bunny Queen said...

Seriously.....the elimination of the Cost Basis Step Up rule would be horrible for everyone!!!!

Heirs as well as the economy.

The example of the house with the gain of $2,460,000 not being stepped up would result in the heirs being unable to sell the house, unable to use the funds for other things, contribute to the velocity of money and would in essence become a stagnant asset. The property taxes issue (reassessing the property upon transfer) depends on where you live ...consult a tax attorney!)

I had other clients who inherited hugely appreciated stock portfolios with enormous gains from the original cost basis of their parents. Without the step up they would not be able to sell without losing a large amount of the gain. WITH the step up rules we were able to sell and re-position to a more balanced portfolio (instead of being over 50% of value in just one company stock) as well as use the cap-gains (untaxed)on some liquidation to buy other assets they had been wanting for years.

Money is moving through the economy instead of being trapped in stagnant assets to avoid losing 40% (or more) to the government.

Elimination of the step up would be a disaster for individuals who cannot afford it and bad for the economy.

bgates said...

As he raised estate tax rates to fund work programs during the Great Depression, Franklin Delano Roosevelt said, “The transmission from generation to generation of vast fortunes by will, inheritance or gift is not consistent with the ideals and sentiments of the American people.”

The New York Times is worth almost three billion dollars, and has been owned by the same family since 1896.

LYNNDH said...

Gotta remember most farmers and a good portion of small business holders are Rep, so screw them. If a farmer's family have to sell out to a big corp, that's good, right? The big corp's have the lobbyist so they are protected.

Kevin said...

it would not prevent the government from making classifications that allowed smarter people to do better than dumber people.

Oh come on now. Have we learned nothing these last few decades?

We all know the racial, gender, and sexual orientation makeup of the "smarter" people benefiting would not perfectly mirror the nation as a whole, and thus the classifications would be struck down on civil rights grounds.

Sydney said...

Ann Althouse said:
I'd like to see tax reform that simplifies matters so that what you pay doesn't depend on whether you gave a chunk of your income to a professional to help you with your taxes. It's like a racket for the benefit of tax lawyers and accountants.

So true! And it extends beyond taxes. Regulations result in the same racket. Small businesses have to pay "experts" to help them navigate through the regulatory mine field to avoid bankrupting penalties. It is truly maddening.

Hagar said...

I think the "morons" were weeded out long ago. That is how "Big Agriculture" assembled their farmsas well as Buffett his industrial fortune.
Howver, Republicans just naturally feel it should be possible for farms, ranches, and small business to remain individual private property. It is in their DNA and why they are Republicans to start with.
Democrats are opposed to the basic notion of any personal property at all, and insist that if you cannot be forced to give your property up to the state, you should at least be made to incorporate and accept group ownership as well as, of course, mandatory fees for lawyers and government agencies whose diktat you must follow in order to be permitted continued existence.

Dust Bunny Queen said...

I agree with Dust Bunny's statement that the most egregious part of eliminating the Estate Tax is eliminating the stepped up basis. But without the Estate Tax, isn't there no need for the stepped up basis? The stepped basis is bringing basis to fair market value, to determine if Estate Tax is payable. No Estate Tax, no need for stepped up basis. What am I missing?

The Estate is valued at current market value and then taxed at the totality of the Estate - the exemption. So while the Estate may have to pay some taxes on the 2.5 million house, the appreciated value of the asset, the heirs receive the asset at the original cost basis for purposes of 'selling' the asset.

Two different things. Estate tax on the assessed and/or real value of the assets versus Capital Gains on selling the deferred appreciation/gain of the asset AFTER you acquired/owned it.

No stepped up basis could amount to (assuming the Estate already paid taxes on the house/asset), a double taxation of the asset. Taxed once at 2.5 million at the value at death. Then the heirs who haven't owned the item until perhaps yesterday, owe tax AGAIN based on the years of the dead person's ownership from say 1950 to yesterday. Double taxation

If my relative decided to sell her $2.5 million dollar house she would owe taxes on the gain because she owned the item during the deferred appreciation phase.

Her children would have not owned the house between purchase and sale/death, but only after the appreciation occurred. Similar to if they had BOUGHT the house, their tax basis would be what it is on acquiring or buying the house. THEIR taxes would be on the appreciation over the $2.5 million value.

Your tax basis is what the assets value is when YOU bought or acquired it. Not what the original owner's was.

Clear as mud?

AZ Bob said...

I wonder what Neil Young, John Mellencamp and Willie Nelson do with the money raised by Farm Aid. I would like to think that it goes to help farmers with their estate planning. I'm sure that they have done so with their wealth, Willie not so much.

Drago said...

AZ Bob: "I wonder what Neil Young, John Mellencamp and Willie Nelson do with the money raised by Farm Aid."

Nope.

Most of it goes to "awareness" and "support" programs which "encourage" all the lefty food ideas that you an imagine.

Basically, it became just another revenue stream for progressive politics, as it does always with those guys.

Yancey Ward said...

The estate tax takes in about 20-30 billion dollars a year. This fact alone tells you that the estate tax hits very, very few estates. This fact cuts two ways politically- it means that Gary Cohn is largely correct- only idiots get hit by the tax itself, but they end up having to pay fees to financial planners and lawyers to avoid the tax- this is a dead-weight cost to society since you can reach the same endpoint with the hit to accumulated capital by eliminating the tax altogether.

As I read the NYTimes piece, it was clear to me that the editors and the writers were trying desperately to convince the readers of two almost completely contradictory points- that the tax hits almost no one, but that those no ones are significant revenue sources, but the actual tax collections argue against that last point.

Politically, I would wager the Democrats real objection to elimination is that a significant part of their funding comes from the financial planners and lawyers. It is the fees that the big money issue here, not the tax revenue.

Richard Dolan said...

So much substance-free spin in these partisan wars. When the subject is taxes, it's perfectly obvious that any change mostly impacts those who pay taxes. That will always be people with money either in the form of income or wealth -- the more money, the larger the impact (up or down). In that regard, selling the latest tax reform effort has a lot in common with the selling of the last health care reform.

In the meantime the country continues to incur massive deficits each year without any immediately obvious downside, to the point where the politicos begin to believe their own BS (it's all free! no one really has to pay! spend more, tax less!). The Reps have gotten weirdly comfortable with that free-lunch approach; the Dems have never cared about massive deficits, believe that someone else should always pay for lunch, and think of taxes mostly in terms of redistribution and class war.

Buyer beware.

California Snow said...

"My experience is that most that pay to have an professional prepare their taxes is fear of the IRS."

THIS is exactly why I have someone else do my taxes. Its also a big reason why I hesitate to go into business myself and take more of a risk.

jaydub said...

The estate tax is nothing less than legal confiscation of assets that have already been taxed, and the federal side is only part of the problem - states with their own estate taxes often have much lower thresholds than the federal, e.g., Washington's is $2Mil, or about 40% of the federal threshold. I don't consider myself to be wealthy, but I'm in the mix now, primarily due to realestate and stock market runups. The first step in the tax prevention process is to become a citizen of a state that does not have an estate tax and the second is to hire someone like DBQ to prevent the confiscation on the federal side, which I have already done. By the way, the 706 form that IRS requires be filled out to determine how much tax one owes is 31 pages, and that's just to pay the tax, not employ any "loop holes." The whole death tax concept is outrageous.

anti-de Sitter space said...

FTR,

The sentence that Althouse struggled w/ is stuff I've previously noted in these threads.

If the rich folks are ok w/ (at least on paper) giving up ownership/control before dying, the death tax becomes much easier to surmount.

And, if you don't trust your family enough to do this, maybe it's best to keep some sorta estate tax for morons AND people w/ sketchy families. Then, the House wouldn't need to work so hard w/ their tax burden shuffling, e.g., removing deductions for teachers who spend $250/y for classroom supplies. Sick. IMHO.

Bay Area Guy said...

It's easy to get lost in the weeds in tax policy.

A few simple big ticket items:

1. The Dems want higher taxes
2. The GOP say they want lower taxes, but only a handful of GOP actually push for it.
3. The poor do not pay income taxes. (But they pay payroll taxes, dammit!)
4. The top 1% pay about 24% of all income taxes.
5. The top 10% pay about 53% of all income taxes.
6. The top 20% pay about 84% of all income taxes. (So income inequality jibes with income tax payment inequality).
7. Because of 4-6, any tax cut will benefit the "rich." So, when Dems caterwaul about tax cuts favoring the rich, they are dishonest and stupid.

Because I live in California, probably I'm gonna get hosed by the tax bill. But I still support it, because it's good policy. California property values are so distorted, that anyone who bought homes in reasonably nice middle class neighborhoods and simply held onto them are rich, Squires by now.

Bay Area Guy said...

And, Yes, I would eliminate the Estate Tax out of principle, but most folks with big estates, duh, hire tax accountants to form Family Trusts.

Kevin said...

Republicans just naturally feel it should be possible for farms, ranches, and small business to remain individual private property.

If you favor a government take-over of property, it's much easier to have the corporations roll it all up for you and then have the government take over the "evil" corporations.

Why do you think the Dems resisted the "ownership society" idea so vigorously?

bgates said...

The biggest winners in an estate tax repeal [would] be people like Mr. Trump’s kids....We don’t know where Mr. Trump’s kids would stand

This reads like the editor who wrote the first paragraph was fired for sexual harassment before they found an editor to write the second paragraph.

KittyM said...

@Ann Althouse

"The idea is: Don't think of anybody sympathetic. Exclude all the farmers and mom-and-pop people. Visualize those Trump kids. That's who you should think of the repeal as helping."

This is disingenuous. The article was making a key and important point: that the key beneficiaries of this tax cut are very wealthy people. It's not so much "that's who you should think of the repeal as helping"; it is a fact that *many more* people in this category (people who inherited unimaginable wealth) will benefit from this repeal, than people who work hard for their money and have more modest means.

That is something that is interesting and true about this change. It is a reasonable point for a newspaper to make, it adds to the sum of knowledge and to my understanding of the issue.

R.J. Chatt said...

"The entire system is set up to benefit the rich already. I don't believe they need any more benefits on the backs of the majority of Americans- period." Holly Ficara Kilpatrick. This was the remark made on a friend's facebook page in a recent discussion on tax reform. So yes, the rationale underlying progressive/liberal thinking is, the rich are bad. If the rich get any tax cuts they are taking away from other Americans.

She would not care about any amount of family farmers or small family businesses, no matter how large or small is the number of people included in this group, much like the NY Times. If it's only a small number of rich people who are harmed that's OK. If you have acquired "a lot of money," no matter how hard or how long you worked for it, it doesn't belong to you. That's what is called being virtuous. If you disagree with these "values and priorities" as she called them, you are a bad person.

I wonder how does this mentality affect the motivation of a young person facing the prospect of losing everything they have worked for? Or seeing themselves being called a bad person if they want to become rich and actually succeed? How rich are you allowed to be and not be hated for it by the group? Who decides these things? Class warfare is ugly.

rehajm said...

...the Dems have never cared about massive deficits...

Dems are passionate about reducing deficits when Republicans are implementing positive changes in tax policy.

Murph said...

DBQ: question.

"If my relative decided to sell her $2.5 million dollar house she would owe taxes on the gain because she owned the item during the deferred appreciation phase."

So say that she sells her house, pays tax on the realized gain from the sale, and dies the next day. The cash proceeds from the sale are now part of her estate, yes? And (without giving any effect to exemption or exclusions that may be available) those proceeds are also subject to the estate tax? Isn't that appreciated value doubly taxed, no matter the form that the appreciated value takes on: be it "stored" in the house's increase in market value, or taken out & converted to cash?

bgates said...

it is a fact that *many more* people in this category (people who inherited unimaginable wealth) will benefit from this repeal, than people who work hard for their money and have more modest means.

I think that if even one minority-owned business benefits then it's worth it, but I've always been a very caring person.

Rigelsen said...

DBQ, I take Pete's point to be that step up basis is not necessary if there is no more estate tax. No estate tax, with no requirement to liquidate assets to pay the no estate tax, and thus no double taxation on any asset appreciation. I think it's only fair. Assets should be passable to family on death, but that passed on asset should also include a passed on appreciation, as otherwise that appreciation will never be taxed. That is, as long as capital gains taxes are a reality.

Rusty said...

"This is disingenuous. The article was making a key and important point: that the key beneficiaries of this tax cut are very wealthy people."

No. The repeal will help anybody who has worked hard to build something worth leaving their children.

Ann Althouse said...

Regardless of the facts, political opinion will flow from the initial mental picture— mom and pop or Eric and Don Jr.

Kevin said...

DBQ, I take Pete's point to be that step up basis is not necessary if there is no more estate tax.

Say the house is mortgaged so the parents can live a comfortable retirement from their appreciated asset. It's mortgaged to 80%, which is not outrageous at all. If the kids get it at no step up and owe 50% of the value in taxes, how do they pay the 80% mortgage with the remaining 50%?

If they cannot pay the mortgage, they are stuck with an asset they cannot afford to sell. If they cannot rent it at a rate high enough to pay the outstanding mortgage, the bank then repossess it, causing the family to lose the asset.

We would have created a situation where the bank can always recover its investment by selling the asset, but he heirs cannot. Does that sound fair? is that the society we're designing?

Kevin said...

Any discussion of this type goes back to Obama's famous statement: "At a certain point, you've made enough money."

You either buy into the idea of the government determining your "enough" and stepping in, or you don't.

And if you think only "rich people" can earn "enough", you're really pretty ignorant of how government power works.

Achilles said...

KittyM said...

This is disingenuous. The article was making a key and important point: that the key beneficiaries of this tax cut are very wealthy people.

Be honest here. They benefit by keeping money and property they made and earned with their own effort. They currently have to randomly give stuff to a government that did nothing to create or earn that wealth. They give it to a bunch of politicians who are corrupt thugs who hand out the ill gained wealth to their crony donors. The government takes money from people who earned it and gives it to people who didn't.

It's not so much "that's who you should think of the repeal as helping"; it is a fact that *many more* people in this category (people who inherited unimaginable wealth) will benefit from this repeal, than people who work hard for their money and have more modest means.

Socialism always fails.The very premise that the government takes things from someone to benefit other individuals is gross.

Drago said...

anti-de Sitter space: ""removing deductions for teachers who spend $250/y for classroom supplies. Sick. IMHO."

Easily handled by removing forced deductions from teacher paychecks for their union masters.

Bruce Hayden said...

“Example (real life, this is a relative's situation): Bought the house in CA for $40,000. This is the original cost basis. Current market value 2.5 million. Difference $2,460,000 in gain. Selling the property would be tax/cost prohibitive. Under current law her children would inherit the property at a stepped up basis meaning that their cost basis is now the current market value and should they decide to sell, the would only owe taxes on any gain from the $2.5 million market value.”

The importance of the stepped up basis is what happens when the assets is next transferred/sold/etc. if you inherit w/o the stepped up basis, then sell at $2.6 million a year later, you have $2.56 mill gain, but only $100k if you got the stepped up basis. Thing though is that the stepped up portion of the basis is subject to the estate tax. That $2.46M in basis step up is included in your estate for tax purposes. It isn’t free. And that is what is going on here. Let us multiply the original amounts by 10, with the current $5m exemption, and a contract to sell the house today at $25m. If the owner lives to tomorrow, they have a $24.6m gain, subject to capital gains rates, then the excess over $5m subject to estate taxes. But if they die the day before the sale, the entire $24.6m gain, less the $5m exemption, is subject to estate taxes as the step up in basis. But what happens if the estate tax is repealed (or the exemption becomes infinite, or at least above the gain)? The IRS gets capital gains taxes on the gain/step up ($2.46m) if the decedent dies the day after the sale, and gets nothing if they die the day before the sale, because the heirs would now have the stepped up basis of $25m at the time of the sale. The key is that under current law, the IRS gets a cut when an appreciated asset is sold, either through estate taxes (on the step up gain) or capital gains. But without addressing the step up issue, the IRS only gets a piece of the gain if the asset is sold before death, and nothing afterwards.

Achilles said...

Ann Althouse said...
Regardless of the facts, political opinion will flow from the initial mental picture— mom and pop or Eric and Don Jr.

Socialists/Progressives prey on emotion. They prey on envy. The envy of people who don't create wealth of the people that do create wealth.

Because Socialism/progressivism creates nothing. They are parasites on the free market.

HoodlumDoodlum said...

"This policy only fucks over a handful of people and they're not the kind of people we like anyway so that makes it ok."

That's really the heart of the argument.
I mean, when the non-Left makes something close to that when talking about, say, "transgender" issues or whatever all I hear is loud cries from nice people--the lamentations of the women--and civil rights absolutists telling me that any injustice to 1 person is worth any cost to avoid, etc.
But I guess the feelings of a handful of emotionally/mentally disturbed people matter while the personal property and feelings of a handful of rich people don't. Some animals are more equal than others, or something.

WaBlogger said...

The problem is with farming all the capital is...the farm. To unlock the capital to pay the estate tax you have to sell the farm.

So what you are saying is that when I buy the farm my children have to sell it.

HoodlumDoodlum said...

Ann Althouse said...Treat us all as morons. That would be more fair. Make it equal as between morons and savvy connivers. It should be moron-proof, and it would be if it were simple enough.

Everyone says they want simplification. Then they hear that simplification means they'll lose a bunch of special carve outs and benefits they personally use and they get angry. "How dare the Republican tax reformers punish sympathetic group X! Don't they care about these photogenic orphans (or whoever)? Outrageous!"
Then we get a bunch of special rules and categories with an ever more complicated code...and it becomes profitable for specialists to learn the code and help individuals strategically apply it/order their affairs to minimize taxes. Wash, rinse, repeat.

Then: "Loopholes!" It's dispiriting.

Amadeus 48 said...

The worst tax there is is a tax that is easily avoided, but confiscatory if paid. Right now, the government, with a 40% top rate, is on course to receive nothing from the billions of Warren Buffett and Bill Gates because they are leaving their billions to foundations, which may have a charitable purpose but will also keep future generations comfortably employed.

A better tax would be one that was at a reasonable rate (say 20%--one for Uncle Sam, four for who or whatever)after a reasonable per person exemption (say $5-10 million) with no deductions for charitable gifts. Then Buffett and Gates could leave 80% of their billions to charity or whatever with 20% to help the government pay its bills. The 20% rate would not cripple those subject to it, who would need to make arrangements to pay the tax.

Such an estate tax would actually generate revenue, which the current system does not.

Howard said...

Achilles thinks bankers and hedge funders create wealth. That's cute. This is how the repugs get people like him to think they are "one of them" instead of another useless eater. Don't get me wrong, the Demoncraps are no different, they just use an opposite psychological con job (poverty guilt instead of wealth wannabe) to achieve the same ends for the bankers and other money changers.

As long as the plebs can stay divided and fight among themselves, they can continue to rob us all blind. Drain the swamp has become golden life preservers.

Dan from Madison said...

jaydub at 11am. Every word exactly correct. I just had to do the 706 dance. It took a full year. The estate tax is double taxation plain and simple.

Amadeus 48 said...

Howard--since you use a derogatory term (plebs)to describe most of us, how do you think of yourself? A natural aristocrat?

And please tell us how you have experienced this robbery by bankers and money-changers? It sounds like an interesting story.

Personally, I feel that I have been deprived of the benefit of my property for the benefit of others without recompense and with the threat of force by governments at the federal, state, and local level on an ongoing basis, but maybe that feeling is unique to those of us living in Illinois.

Dust Bunny Queen said...

@ Bruce Hayden Thing though is that the stepped up portion of the basis is subject to the estate tax. That $2.46M in basis step up is included in your estate for tax purposes. It isn’t free. And that is what is going on here.

Exactly. The appreciation of the asset that is being inherited has already been subject to taxation....whether the estate ended up owing tax, the appreciation has been included in the taxable estate.

The key is that under current law, the IRS gets a cut when an appreciated asset is sold, either through estate taxes (on the step up gain) or capital gains. But without addressing the step up issue, the IRS only gets a piece of the gain if the asset is sold before death, and nothing afterwards.

Well, not really nothing. Just a smaller amount....assuming that there IS more appreciation. That doesn't always happen. There could be a loss.

Yes. If the owner of the asset sells before death, the appreciated gain from the original cost basis is subject to capital gains tax and the owner pays from their proceeds.

IF the asset is sold after death and the step up still exists, the seller only uses the gain between death and selling for capital gains taxation. This is because the gain has already been assessed for taxation in the estate.

The IRS wants to have it both ways. Assess the asset for the estate tax, eliminate the step up and then TAX AGAIN for capital gains on the original cost basis. You can do one or the other but to do both represents a double taxation of the asset.

The other issue is that to eliminate the step up in cost basis to the heirs may ensure that the value in the appreciated asset will become stagnant. Most people will resist selling a highly appreciated asset because of the abhorrence of paying taxes. Whereas they might be more interested in selling the multi million dollar home for a smaller tax hit and THEN using the money for other purposes which can be a stimulant to the economy. Instead of value just sitting, it becomes active.

Ignorance is Bliss said...

KittyM said...

That is something that is interesting and true about this change.

If it were true, the Tax Policy Center would not have had to come up with their own definition of small business that bears little resemblance to the official definition, and which greatly understates the number of small businesses and farms getting hit by the estate tax.

Rabel said...

"It's repulsive to call people "moron" for not enlisting this help, paying this protection money, but I would like the government to collect the revenue, not these other people to make money saving people from having to pay taxes."

I'm not clear as to whether or not this is an endorsement of the estate tax. I'm inclined to think it is not but is referring to tax preparation fees in general, but:

Let's assume for a hypothetical (if I may) that Althouse is in favor of estate taxes. Let's also assume (hypothetically) for simplicity that the venerable Meade does not exist. Since the 5.49 million dollar exclusion is in itself a complicating "loophole" would the hypothetical Althouse not be in favor of applying the estate tax to all estate assets and having the government "collect" 50% of her estate at the time of her passing rather than her children?

I think not, but I could be wrong.

Progressivity applied to income tax is a necessary evil if we are to fund the government without killing the middle class. Progressivity applied to accumulated wealth is ... something else. Envy? Communism? An anti-aristocracy mechanism we inherited from the English?

buwaya said...

The estate tax hits a certain band of property disproportionately.

That is that range of property values above the exempt and below that which justifies the mechanisms of legal evasion, such as setting up a foundation - this is a big PITB if one owns a manufacturing business for instance. These people or families are wealthy, but the "very" part is purely rhetorical. It is the case that the bulk of property inheritance is not affected because this tends to be heavily skewed to the very top.

The worst affected are what the Germans would call the Mittelstand - small (though not mom&pop storefronts) businesses. This is a major problem vs the longetivity and especially the independence of the American Mittelstand, vs Europe. It drives consolidation and benefits large corporations. It is not as easy for an American industrial business to survive a generational change without selling out to a Fortune 1000.

German law is interesting. The exemption cutoffs are much lower than in the US, and more complicated, but business assets (equity in a business) is mostly (@ 80%?) exempt, which strongly inclines keeping businesses in the family, hence a healthy Mittelstand.

And as noted above, there are also complications in accounting for debts, though the example above is I think not correct. Simple mortgages are deductible from the net estate to determine taxable value.

The arguments about this are disingenuous, on both sides, each in its own way.

traditionalguy said...
This comment has been removed by the author.
traditionalguy said...

The Estate Tax is serious as a tax can be. It started out as a 1 0r 2 % tip to the ruling Monarchy paid by heirs of the deceased. The rates became a confiscatory 70% in the New Deal days of the 1930s. And they have slowly gone down from 65% to to 45% of the inheritance over the last 20 years.

The Exemption (now called a Unified Credit on Estate and Lifetime gifts)for poor people was 50K until 77-87 era when it began a slow increase to 700K by 2001. Then it shot up to 2 million and eventually to todays 5 million area.

But 50K in 1977 meant the heirs of an old widow with a paid for 2 BR worker's house owed a tax and paid the high costs of a Return preparation.

The only serious loophole in our Code is the "stepped up basis " to FMV of assets to date of death. This eliminated the capital gain Tax that would also have been paid as if sold pre death, but not due on the sale of the family assets after inherited.

There are various other ways to pass the ownership on to the next generation with out a cut for the USA, basically by transfering appreciating assets into a trust after borrowing their value on a secured loan prior to the transfer. And the normaluse of the Credit Shelter trusts in wills, that get both of the Exemptions of mom and dad stacked.

Historically this is Feudalism. The King then owned all the realm subject to enfeofments of lands to Barons and other Aristocrats who paid the King a huge fee for them. But that expired upon the vassals death, subject to a renewal by his heirs on payment of another ssor heirs huge fee. That IS the estate tax which is owed by the heirs and successor heir, over and over, forever.

Dust Bunny Queen said...

The reason that Long Term Capital Gains taxes are (or have been generally) lower than earned income is so that assets can be sold instead of just retained. Different rates for long term holding or short term holdings are based on the owner's time of purchase or acquisition.

Grandma bought (or inherited) 1000 shares of Chevron Stock CVX in 1970 for $2.88 a share. $2880

Today her stock is worth (assuming no stock splits) $115.48 or $115,480 Gain of $112,600 IF Grandma sells

However since there was a 2 for 1 stock split on September 13, 2004 Grandma actually has 2000 shares and her position is $230,960. Almost a quarter of million dollars. Grandma was pretty smart cookie since this is just ONE of her holdings in a portfolio of $750,000

Grandma would like to sell some of her CVX and other stocks to either buy other stocks or go on a world cruise before she dies or make gifts to her Grandchildren, BUT....when looking at losing 15% or maybe 20% of her investment she basically says "Screw it" and does nothing. (Believe me, this is a real scenario and I've been there with these clients)

When the capital gains rate was lowered people tended to "realize" their deferred capital gains> Instead of selling, they sold. The money that was unrealized or just sitting as appreciation was then taxed and the government got more tax revenue (for a while see the spikes in the chart) because of the lowered rate and the human nature to avoid paying more than people think is fair. Chart

For most people when it comes to money, investing and taxation, emotion is stronger than logic.

Howard said...

Amadeus: I'm a pleb, just like everyone else not apart of the 1% club. Inflation and declining real wages by offshoring manufacturing is how the top skims more and more of the wealth out of the nation. I checked, you guys in Illinois are getting hosed on federal taxes versus expenditures... It's the price you pay for not living in a red state.

Dust Bunny Queen said...

"realize" their deferred capital gains> Instead of selling, they sold.

OOOOPS.............Instead of NOT selling, they sold. (Sorry)

southcentralpa said...

Well, the problem with how many farmers pay the death tax is that many go through pre-contortions (to coin a phrase, call it estate planning if you like) to avoid the burden. You can buy enough insurance to pay what you think it will be, or dispose of it beforehand.

(I have always been sickened by the way Warren Buffett boosts the estate tax. It's part of his business model: either you buy insurance (he sells insurance), or cash out (he buys family businesses). Pretty darn convenient, eh?)

Bruce Hayden said...

“Well, not really nothing. Just a smaller amount....assuming that there IS more appreciation. That doesn't always happen. There could be a loss.”

My simplifying assumption was that there would not be any gain in the three day span that includes the day before death, the date of sale, and the date after. Sorry if I didn’t make that explicit, but yes, gain or loss after valuation date complicates things.

“The IRS wants to have it both ways. Assess the asset for the estate tax, eliminate the step up and then TAX AGAIN for capital gains on the original cost basis. You can do one or the other but to do both represents a double taxation of the asset.”

My point is just the opposite - that if the estate tax is eliminated, if basis step up isn’t also eliminated, or at least modified, taxes could, and would be, eliminated by delaying sales of assets until they went through step up at death, because the second prong would now be missing for taxing gain - capital gains if sold before death and no taxation if sold afterwards, since there would no longer be an estate tax to tax the latter. As you noted above, this would tend to reduce liquidity by penalizing transfers during the owner’s lifetime.

Bruce Hayden said...

@DBQ - currently facing the lock in of (Sub-C) corporate taxes on 40+ year old assets, which is why I am hoping for corporate tax relief. We get offers to buy at least every month, and have to turn them down for this reason. Sub-S is problematic due to that many years of (undistributed) capital gains.

Dust Bunny Queen said...

@ Bruce. Perhaps I'm being dense today, but I'm not getting your example. Are you suggesting that the Estate Tax be eliminated and that the Cost Basis Step up at death also be eliminated?

Is this what you mean?

Using my relative with her highly appreciated property. Low cost basis $40K and high current market value $2.5M. If she sells during her lifetime she is subject to LT Cap Gains.

If she doesn't sell and her kids inherit without a step up in basis....if they sell they also pay LT Capital gains on the 2.46 million gain based on her original purchase cost? And be subject to a 20% tax Almost 50K in taxes.

If that is the case, why would you ever sell anything. Plus it doesn't seem fair that the young people also inherit the tax burden that their parent has avoided all these years. I'd rather insure and have an unfortunate accidental fire. JK..sort of.

Or are you suggesting that there not be an estate tax and that there still be a step up in cost basis. I doubt that the greedy grasping government would agree to that.

??? Thanks.

Dust Bunny Queen said...

@ Bruce. We are also S Corp. Not as long in formation though for significant undistributed capital gains to be an issue for us. However, I too am carefully looking at the proposed tax code as it relates to pass through income, and will certainly conference with our CPA to determine how this may affect our current structure for earned income and passive income from the corp.

Gah.

MadisonMan said...

The estate tax is nothing less than legal confiscation of assets that have already been taxed, and the federal side is only part of the problem - states with their own estate taxes often have much lower thresholds than the federal, e.g., Washington's is $2Mil, or about 40% of the federal threshold.

Pennsylvania takes 4.5% regardless. I wanted Dad to move, but he wouldn't.

Martin said...

That NYT stuff really was incoherent, but the canned their copy editors a couple of months ago, so... of course.

If the really rich avoid it and only some people with smallish fortunes who don't have good tax planners pay it, what's the point, taxing poortax planning?

Frankly, if it really nailed the Zuckerbergs and Buffets and Gates, to the tune of serious money, I might be for keeping it. But people at that level can easily shift assets and income geographically and in and out of various tax-benefitted structures, so the main gainers are tax accountants and attorneys who serve that rarefied market. Well, to hell with THAT!

tim in vermont said...

Achilles thinks bankers and hedge funders create wealth. That's cute.

So you think that 747s and transcontinental pipelines could be built without them? I don't even think Bill Gates could underwrite the cost of designing and producing an airliner, for example.

tim in vermont said...

Maybe Howard Hughes could in the days when they were far less sophisticated, and safe.

FleetUSA said...

As a retired tax professional (NYU LLM)I know the estate tax was always considered the stupid (or similar words) tax because rich people always know ways to avoid the major impact of the tax via charitable trusts, generation skipping trusts, partial gifts, etc.

Look at the Kennedy$, Rockefeller$, Ford$. I'm sure via charitable trusts the Gate$ and Buffett$ will follow the same rules.

So who benefits from the tax, the tax lawyers, CPAs, and bank trust officers who spend hours preparing and implementing all the loopholes.

AZ Bob said...

Bay Area guy wrote:

"Because I live in California, probably I'm gonna get hosed by the tax bill. But I still support it, because it's good policy. California property values are so distorted, that anyone who bought homes in reasonably nice middle class neighborhoods and simply held onto them are rich, Squires by now."

You are rich on paper. But selling your house to get rich only works if you move from California.

Dust Bunny Queen said...

So who benefits from the tax, the tax lawyers, CPAs, and bank trust officers who spend hours preparing and implementing all the loopholes

You guys all act like it is a bad thing that there are people who know how to do certain things like guide you through, implement, position you to avoid taxes and navagate through the morass of Federal Tax Regulations. Something BTW that if you took enough time to research it you would be able to figure this stuff out on your own. But most don't or won't. Yeah, the so called 'stupid' people who have spent their lives farming, building other types of businesses don't think about planning until it is too late. They were busy making a living doing something else.

There are many fields and occupations for which people would rather pay someone to do the work, who has the knowledge than to DIY. There are unfortunately, many situations where like it or not, the regulations from the Government make it so that you need a specialist.

Smog your car? Build a house? Rebuild your engine. Remove your appendix? Install your HVAC system? Tons of things that you can do yourself, but because of regulations, licensing, laws etc....it is just easier to get someone who has already jumped through the hoops to take care of you.

Well.....maybe not so much DIY on the appendix. You can call people stupid who don't plan or who hire someone else to do the work. I don't feel 'stupid' because I hire someone to change the oil in my car, tune up the engine and align the tires. I can do my own taxes, even the corporate ones due to my previous training, but I hire a good CPA to do this for me. I feel smart because I make good use of my time doing what I know and paying someone else to do what they know.

So. Boo Hoo...some people can make a living helping you avoid taxes. They didn't write the laws. (Although....I'm sure that many of the high powered law firms that benefit lobby hard for the retention of these convoluted tortured tax laws). However, to beat up on the guys and gals who are CPAs, CFPs, Bank Trust officers, Insurance agents selling legit products to complete your plan is a bit harsh.

If you don't like it.....figure it out yourself. Or better yet, get your Congress critters to do something about it.

Dickin'Bimbos@Home said...

Only morons think that the wealthy can get away not paying it.

buwaya said...

"You are rich on paper. But selling your house to get rich only works if you move from California"

If you move to provincial Philippines with the assets gained from selling a typical California house - well, you will be the local squire, by default. Your peers will be the few local fellows retired from the very highest range of OFW careers.

You will be invited to join the Rotary, the Bishop may call on Saturday afternoons, and you will be asked to be every newborn's godfather.

You see quite a lot of reinforced-concrete manors and palaces in ricefields and mango orchards, out there.

JimB said...

If only a few are paying the tax, then why perpetuate it?

Leora said...

Kevin, I think the carry over basis would have to be adjusted for loans secured by the property or you'd end up with untenable situations where there is a mortgage or other secured loan on appreciated appreciated property at the time of death. However, much better to pay tax when the asset is sold than on the death of the owner. The heirs can then keep the home instead of having to sell it to pay the estate tax. The current estate tax is a dead weight on small businesses.

The elimination of step up basis combined with the elimination of the estate tax does make sense though I could see an option to pay a tax at the capital gains rate at time of death to secure a step up.

James K said...

You guys all act like it is a bad thing that there are people who know how to do certain things like guide you through, implement, position you to avoid taxes and navagate through the morass of Federal Tax Regulations.

No, it's a bad thing that there is a "morass of Federal Tax Regulations." Having all those people who know how to guide us through is a complete waste of valuable resources, since those people could presumably be doing something more productive than undoing the damage the Feds inflict on us via the complexity of the tax system.

cubanbob said...

If only the government was honest enough to allow the cost basis to be adjusted for inflation.
Even the huge jump up in values for homes in places like CA would be seriously reduced just by adjusting for inflation. The state tax is a wealth tax. To say it can be avoided is just seriously stupid. It can avoided in large part by giving the wealth away like Gates did but that means that wealth doesn't go to his heirs.

tim in vermont said...

You guys all act like it is a bad thing that there are people who know how to do certain things like guide you through, implement, position you to avoid taxes and navagate through the morass of Federal Tax Regulations.

No, it's a bad thing that we have to have such people. Just like it would be a bad thing if we had to hire an armed man to ride shotgun in order to go grocery shopping.

George Spix said...

What other taxes are inherently toxic? Those that favor one class over another. Or attempt to implement social change rather than just raise money to run the government on. Mary makes more money than Sarah. Because of the difference in income Mary's work matched savings and stock purchase plans, 401K and IRA benefit Mary far more than they benefit Sarah. "But they both have access to the same deduction say some as if this is a supporting argument. Makes no d@mn difference. Ditto the State and local tax deduction benefits Mary far more than Sarah, plus it avoids having the local representatives and tax authority take the blame for shifting their taxes so someone else in another poorer state can pay for part of it. Say being a sanctuary city. In very wealthy state, say New York or California this game causes half the burden to be paid for by someone in a poorer state who had no voice, vote in the matter. When T talks about a fairer tax system that puts it to the rich this is what he's talking about, meaning you who have two homes and boat and are running your own business, the bedrock Great America was built on. Besides letting small businesses give their business to their sons and daughters rather than having to liquidate to pay their estate taxes. Yes, many thousands per year must do this, crying at their parent’s wake. Surprising how many small business owners die per year in the U.S. Good thing no other countries do this. They'll soon replace us when we find that destroying the family is the same as destroying A country, relative to others who realize that success is out competing us in Education, Free enterprise, Lack of sand in the gears of progress, culture, costs of energy strength of the family and more. Something we haven’t seen in the U.S. for too many generations to count.