Blue Mass Group

Reality-based commentary on politics.

Profiles In Courage: The Estate Tax

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Ah it’s ok for the “little people” to pay the estate tax, just not the Kennedys.  The dirty secret of the estate tax is that it disproportionately hurts the small family businesses who didn’t do proper planning, it doesn’t hurt the uberwealthy like the Kennedy’s.  Bravo YAF, bravo.

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  1. In 2011, if the Bush tax cuts are allowed to expire, the top rate for the estate tax will increase to 60 percent on January 1, 2011, and the value of an estate exempt from taxation will shrink to $1 million.

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    p>$1 million sounds pretty big, but you take the value of a house in about 3 years, plus savings, it doesn’t take long in Massachsuetts to be a millionaire.  

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    p>And the Fed gets up to 60% and of course Mass gets its share.

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    p>Unless of course, you’re smart enough and wealthy enough to set up trusts, foundations and family partnerships to transfer wealth prior to death.  Because, only the little people pay taxes.

  2. Not once, but twice, this video cites an article from June, 1977 to illustrate the Kennedys’ tax situation.  Please, Eabo, can I have my two minutes back?

      • … on the issue of the ‘death tax’ in the midwest (Kansas I think), the GOP went on and on about how the tax makes family farms particularly vulnerable.  Only problem was, when doing a frantic search for examples they could only find one, and that one would have easily avoided he tax with even a modicum of estate planning.  The truth is that very very few people actually end up paying this tax as long as they do proper estate planning.

        • opposition to eliminating it.  If a tax can be easily avoided why is it on the books at all?  Is it to protect the lawyers and accountants that give your candidates donations?

          • … for those few that it does affect, it nets a good many dollars.  This is in part due to the extreme stratification of wealth we’ve seen over the last 20 years.  Also, given the premise that graduated taxation is more fair, taxing these extreme examples of wealth (so much wealth that even estate planning can’t avoid the tax) hardly seems antithetical to the premise.

            • that those that have resources can get away without paying through the use of lawyers.  i think I have a new slogan for you guys.  ‘Save the Estate Tax, it’s for the Lawyers’.

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              p>Your argument has no basis in reality.  This is why we need to simplify the tax code.  Here’s my take.

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              p>First 20K is tax free.  Everything after that is taxed at 17%.  No loopholes, no deductions, no nothing.  The tax form is a postcard.  you with me?

              • First 20K is tax free.  Everything after that is taxed at 17%.  No loopholes, no deductions, no nothing.

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                p>Communist!  17% flat is huge.  Try 11%, or less, or 0.  You’ve paid tax on nearly every accumulated penny. What rational is there for an estate tax other than it’s an easy money grab and the guy paying it doesn’t complain.

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                p>With accumulated wealth, an individual can accomplish some great things.  I’ve seen a compelling argument that the custom of Prima Genitor, or the custom of leaving most of the wealth to the eldest child is the reason that the English were able to dominate the Spanish on the high seas in the 1700-1800s.  

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                p>The Spanish custom was to distribute wealth to all children; the English customarily left wealth to the eldest son.  These large accumulation of wealth could more easily finance mass ship building in the UK over Spain.

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                p>Accumulation of wealth of a few isn’t necessarily a bad thing.  Can you really make the argument that Bill Gates’ wealth or Warren Buffet’s or any wealthy individual would be best divided up ‘mongst 300,000,000 people, redistributing say, $10 to every person, in a population where a large portion of that population produces little  economic value but rather just produces just more of themselves.  

            • The dream of graduated taxation redistributing the wealth to the masses, comrad, is a myth.

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              p>Let’s go back to the glorious Clinton years, say 1998.  I can pick any year, and randomly chose a pre-Bush tax cut year. IRS DATA.

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              p>-47,475 taxable estate returns were filed.

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              p>-20,106, or almost 1/2 were under 1,000,000.

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              p>-Of those less than 1 million estates, 6,662 included farm assets.

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              p>-Of those less than 1 million dollar estates, 3,358 left closely held companies.  Doesn’t take much for a company to be worth $1,000,000.  Single McDonalds franchised restaurant, family owned grocery, restaurant, etc…

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              p>-Of those 6,662 farm estates, 3,423 were under 1,000,000.

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              p>-Is a 1,000,000 farm a ‘small farmer’ in your mind?  You decide, but for reference, a 50 acre farm at $20,000 per acre is $1,000,000.

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              p>- In 1998, $20 billion was collected in estate tax, and almost exactly 1/2 of that came from estates under $5,000,000.

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              p>-374 were ‘extreme examples of wealth’, or inexcess of $20,000,000 each.

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              p>P.S. it looks like Leona Helmsley’s estate will pay little if any estate tax.

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              p>P.S.S.  What the hell is a ‘modecum of estate planning’?

    • when Teddy gives up the ghost?

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      p>I have some land in Florida to sell you.

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