2013
As regular readers know, the estate tax is my favorite pet peeve. It was enacted more than once intended to be temporary, to pay Civil War debt and then WWI bills; it never stayed temporary but instead has been accepted simply as another tax to be absorbed into federal coffers. The billionaire hypocrites who say they favor paying the tax have all set up charitable trusts to avoid it, which is fine by the way because that is far more productive than giving it to the Feds.
It seems to me there is a big difference between the guy with a few billion and the one with a few million. Below is a quote from Bill Gates father. I have one question; who the heck is he to impose his “value” on everyone else in America? How does he know the children have done nothing to support the parents? (Oops, two questions) He is so out of touch; he thinks in billions of dollars, what about the guy who wants to leave a couple of million to each child, a couple of million he earned and paid taxes on – probably more than once?
Let’s say a person was successful starting a business, saving, investing, etc. and as a result after a lifetime of effort accumulated a total estate worth $10 million. Under the estate tax there is no tax on $5.25 million, but the other $5 million is taxed at 40%. Ten million divided among say four children is $2.5 million each, or the price of a good apartment in New York. Instead, Uncle Sam gets $2 million of the ten million for which he has, as Mr Gates says, “done nothing” and will redistribute it to people who have done even less.
“We shouldn’t have a situation where gimmicks allow rich people to avoid estate taxation,” Gates’s father, William Gates Sr., the author of a 2004 book that advocated for the estate tax, said in an interview. “A value in our lives is having children who make their own way to some extent. It’s unfortunate to have people who, when Mom and Dad pass on, they leave you a billion dollars for which you’d done nothing.”
via How Wal-Mart’s Waltons Maintain Their Billionaire Fortune – Bloomberg.
To most Americans a few million dollars is a lot of money, in some cases equal to a lifetime of earnings, but when honestly earned it should not be subject to double or triple taxation just because some politicians decided passing it along to ones children is unfair to everyone else in America. The estate tax is an abomination.
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In the interest of disclosure, I will never be subject to the estate unless I win the lottery.
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