Saturday, December 18, 2010

The Death Tax Should Die

The Bush-era tax rates live on! Despite the very best efforts of those of the Democrat persuasion to raise tax rates on the "rich," they were unable to do so. Their rationale was that the "rich" had no right to keep the money they earned. They should forfeit it, I guess, so that those less "rich" could enjoy its redistribution. And you know what "rich" is. That's anybody who makes more money than you do. Thus, the rates that have been in effect for nearly ten years will continue without change. Notice there will be no tax cuts for anybody, including the "rich." Just a continuation of the existing rates of taxation for two more years. But fret not. Two years from now we'll get to revisit this fight when the next general election rolls around. Don't know about you, but I can't wait...

But another aspect of this tax compromise (the Mainstream Media calls it a "compromise" when the Dems had no choice but to capitulate) is that the estate tax will go from zero percent to 35% on estates valued at more than $5,000,000. The Dems wanted 55% over $3.5 Million. The Republicans wanted the estate tax to be abolished once and for all. And so the compromise was one that neither side liked. And one that will once again be rehashed in a couple of years.

Let us take a look at this estate tax deal. You earn some money and you're taxed on it. You invest a little bit of what's left and realize a return and you're taxed on it. You keep investing and earning and you're taxed still more. Yet if your investments fail and you lose, none of that money the government confiscated from you in the form of taxes over the years is returned. So why, I ask, if for no other reason than fairness (WHEN WAS THE LAST TIME YOU SAW SOME OF THAT?), should your heirs be taxed on your estate when you die? And if a little bit of taxation is good, why isn't more better? Instead of 35% or 40% over a certain amount of valuation, how about a taxation rate of 75% from the first dollar? How about 100%? Would that be fair? Would that serve to benefit society? Or would it just make those who like to engage in class warfare feel warm and fuzzy all over?

The heart of an estate may well be a family farm or a machine shop or a couple of 7-11s. They may generate an annual income but may not have liquid assets sufficient to pay off the tax man hovering over the death bed. The farmer dies and his heirs have to borrow against the farm in order to satisfy the taxes. And what if the farm cannot generate enough profits to cover the loan payment? Then the farm has to be sold to make the Democrats and the IRS happy. And the farmer's heirs now have to start all over because of the redistributionist philosophy so warmly embraced by the lefties among us. The business is destroyed for no reason other than to punish those whose forbears were able to amass an estate. Does this make sense to you? It doesn't make sense to me...

1 comment:

  1. Boy, you sure do know how to take the holiday buzz and blow it to bits! :-( Sadly, you are, once again, right on the money, so to speak, on this one. What incentive is there for those among us who have the old entrepreneurial spirit to create and build a business, make a profit, invest it and hope to eventually leave it to your heirs? Who would ever start businesses, create jobs, pay taxes on the profits with the specter of all that they've created eventually going to the government to re-distribute to others? The answer, of course, is NOBODY! And so, a big Bah Humbug to those idiots we elect to serve us. There will be lumps of coal in their stockings this year...


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