COMensarations
Tuesday, August 28, 2007
If You’ve Got a Last Will
The poor you will always have with you,… Matthew 26:11 (New International Version)
There was an interesting piece in the Ideas section of the August 26 Sunday Chieftain. Jessie Ulibarri is “director of the Campaign for Economic Justice with Colorado Progressive Coalition in Denver. (progressive coalition.org)”
His article sounds reasonable at first glance, but funny things start occurring in the first paragraph.
Ken Salazar co-introduced legislation to modify the estate tax by exempting farms. As a rancher himself, and as an elected official who strongly represents the interests of rural Colorado, his interest in this matter is understandable. Unfortunately, this legislation is based on misinformation and fear of one of the most important sources of revenue we have as a country.
Fear of an important source of revenue for the country? It took me quite a while to figure out that the writer assumes that Salazar is afraid of the estate tax decreasing his own or his heirs inheritances.
The estate tax was enacted in 1916 to restrain the wealth inequality in the United States by taxing the estates of the richest 1 percent when wealth is transferred at death.
“Restrain the wealth inequality.” Wow. Is someone’s red underwear showing here? My brief researches on the web did not give me the history of the reasons for the estate tax, but I don’t think “restraining” the wealth “inequality” had anything to do with it. Finding a source of revenue that few people would complain about sounds more like it.
Notice how it’s implied that there’s something wrong with “wealth inequality.” It has to be “restrained.” In case you’re in doubt, read the rest of the paragraph:
Did you know that, even with the estate tax, 5 percent of Americans owned 55.5 percent of the nation’s wealth in 2004? Imagine how much more of the wealth would be in their hands if there were no estate tax.
And it’s wrong for these folks, the 5 percent, to own what they, or their progenitors, bought and paid for because...? And just how are we defining “wealth?” One man’s trash is another man’s treasure. Are we talking real estate, buildings, art, the means of production, milking goats, what? And where are these figures coming from? Does it count the federal government as an “American?” (Care to guess how much of the real estate in Colorado is owned by Uncle Sam?)
“Imagine how much more of the wealth would be in their hands if there were no estate tax.” Again, this is wrong because...? And do we really prefer that this money be in the hands of federal bureaucrats and politicians, instead of people who are trying to create more wealth by investing it or using it to produce goods and services?
Let’s take a closer look at this number, 5%. It doesn’t sound like much. Unless you consider that it’s one out every twenty people. In Pueblo County, if you figure a population of 150,000, it’s 7,500. You probably know a few of these people. Every twentieth person you see in the Mall is one of them. Maybe more than that, because the poorest people don’t go to the Mall. Doesn’t look like such a small number any more, does it? And we’re just talking about Pueblo County. Also notice how we go from talking about the 1 percent in 1916, to talking about the 5 percent in 2004. Why did this number grow? Because the wealth is spread amongst a larger percentage of people now?
Ulibarri goes on:
The revenue from the estate tax provides billions to fund the critical needs of our country,…
Where are we getting this figure “billions?” What is his source? How does it compare to other sources of revenue for the federal government, like income tax?
Sen. Salazar has stated that this bill would help actual farmers and ranchers, and not big business developers or wealthy heiresses. But hardly any farm estates pay the estate tax now, so they don’t need this help.
If hardly any pay them, then it doesn’t make much sense to single them out and make them pay, does it? Just what portion of the “billions” do estate farms contribute? We’re not told.
“Restrain the wealth inequality.” Wow. Is someone’s red underwear showing here? My brief researches on the web did not give me the history of the reasons for the estate tax, but I don’t think “restraining” the wealth “inequality” had anything to do with it. Finding a source of revenue that few people would complain about sounds more like it.
Notice how it’s implied that there’s something wrong with “wealth inequality.” It has to be “restrained.” In case you’re in doubt, read the rest of the paragraph:
Did you know that, even with the estate tax, 5 percent of Americans owned 55.5 percent of the nation’s wealth in 2004? Imagine how much more of the wealth would be in their hands if there were no estate tax.
And it’s wrong for these folks, the 5 percent, to own what they, or their progenitors, bought and paid for because...? And just how are we defining “wealth?” One man’s trash is another man’s treasure. Are we talking real estate, buildings, art, the means of production, milking goats, what? And where are these figures coming from? Does it count the federal government as an “American?” (Care to guess how much of the real estate in Colorado is owned by Uncle Sam?)
“Imagine how much more of the wealth would be in their hands if there were no estate tax.” Again, this is wrong because...? And do we really prefer that this money be in the hands of federal bureaucrats and politicians, instead of people who are trying to create more wealth by investing it or using it to produce goods and services?
Let’s take a closer look at this number, 5%. It doesn’t sound like much. Unless you consider that it’s one out every twenty people. In Pueblo County, if you figure a population of 150,000, it’s 7,500. You probably know a few of these people. Every twentieth person you see in the Mall is one of them. Maybe more than that, because the poorest people don’t go to the Mall. Doesn’t look like such a small number any more, does it? And we’re just talking about Pueblo County.
Also notice how we go from talking about the 1 percent in 1916, to talking about the 5 percent in 2004. Why did this number grow? Because the wealth is spread amongst a larger percentage of people now?
Ulibarri goes on:
The revenue from the estate tax provides billions to fund the critical needs of our country,…
Where are we getting this figure “billions?” What is his source? How does it compare to other sources of revenue for the federal government, like income tax?
Sen. Salazar has stated that this bill would help actual farmers and ranchers, and not big business developers or wealthy heiresses. But hardly any farm estates pay the estate tax now, so they don’t need this help.
If hardly any pay them, then it doesn’t make much sense to single them out and make them pay, does it? Just what portion of the “billions” do estate farms contribute? We’re not told.
Later on we’re told:
The Congressional Budget Office studied the number of farm estates that pay the estate tax. At the current exemption, CBO estimates that each year, out of the millions of people who die, only about 123 farms in the entire country would owe estate taxes.
Each year, only 15 of those farms - about .003 percent of American farms - would not have enough liquid assets to pay the tax.
More fun with numbers. 15 of 123 is well over 10%. We go from talking about the 123 farms which are part of large estates, to talking about ALL American farms, even ones which aren’t part of any estate.
Despite the misconception that the estate tax impacts family farms, only the wealthiest people pay the tax.
What? The wealthiest people don’t have families and therefore can’t have “family farms?”
This legislation provides loopholes so that the wealthiest in this country can evade this important tax by buying and keeping farmland. In other words, if Paris Hilton’s family decided to raise and sell Shetland ponies, the family could avoid paying the tax and Paris could buy herself another yacht, or maybe a herd of Chihuahuas in diamond studded collars.
And what’s wrong with Shetland ponies? Plenty of people raise them. Maybe Mr. Ulibarri got kicked by one during his formative years.
Now I have a question for a tax attorney or accountant: Isn’t it true that a wealthy family would only avoid paying the tax if the farm put them over the limit required before the tax kicks in? In other words, a $6 million estate is not going to be saved from the estate tax because of a $200,000 farm on the books. (And isn’t it true that Paris Hilton will probably need the money to pay for criminal defense attorneys, not chihuahuas?)
Instead of more exemptions, we need an estate tax that provides reasonable revenue for important programs that benefit everyone, like children’s health care, and for programs that benefit farmers, like disaster relief. Sen. Salazar should drop these new tax loopholes for the wealthy and special interests and instead look to real reform that could help farming families and all other Coloradans.
“We need an estate tax that provides reasonable revenue...” Mr. Ulibarri, you have not made a case for “need” for an estate tax at all. You have not told us what percentage of the total federal revenue comes from it, you have not told us what percentage of the federal budget is paid for from it, and you have not told us how many Americans (heirs) are affected by it.
You want real reform? How about we cut the budget so that we don’t need as much tax revenue? How about collecting more taxes in Colorado, and keeping the money here, and collecting fewer taxes at the federal level, and save money on all the bureaucrats who handle the taxes in between the feds getting them and giving some of them back to states and lower levels of government?
“Restrain the wealth inequality.” Wow. Is someone’s red underwear showing here? My brief researches on the web did not give me the history of the reasons for the estate tax, but I don’t think “restraining” the wealth “inequality” had anything to do with it. Finding a source of revenue that few people would complain about sounds more like it.
Notice how it’s implied that there’s something wrong with “wealth inequality.” It has to be “restrained.” In case you’re in doubt, read the rest of the paragraph:
Did you know that, even with the estate tax, 5 percent of Americans owned 55.5 percent of the nation’s wealth in 2004? Imagine how much more of the wealth would be in their hands if there were no estate tax.
And it’s wrong for these folks, the 5 percent, to own what they, or their progenitors, bought and paid for because...? And just how are we defining “wealth?” One man’s trash is another man’s treasure. Are we talking real estate, buildings, art, the means of production, milking goats, what? And where are these figures coming from? Does it count the federal government as an “American?” (Care to guess how much of the real estate in Colorado is owned by Uncle Sam?)
“Imagine how much more of the wealth would be in their hands if there were no estate tax.” Again, this is wrong because...? And do we really prefer that this money be in the hands of federal bureaucrats and politicians, instead of people who are trying to create more wealth by investing it or using it to produce goods and services?
Let’s take a closer look at this number, 5%. It doesn’t sound like much. Unless you consider that it’s one out every twenty people. In Pueblo County, if you figure a population of 150,000, it’s 7,500. You probably know a few of these people. Every twentieth person you see in the Mall is one of them. Maybe more than that, because the poorest people don’t go to the Mall. Doesn’t look like such a small number any more, does it? And we’re just talking about Pueblo County.
Also notice how we go from talking about the 1 percent in 1916, to talking about the 5 percent in 2004. Why did this number grow? Because the wealth is spread amongst a larger percentage of people now?
Ulibarri goes on:
The revenue from the estate tax provides billions to fund the critical needs of our country,…
Where are we getting this figure “billions?” What is his source? How does it compare to other sources of revenue for the federal government, like income tax?
Sen. Salazar has stated that this bill would help actual farmers and ranchers, and not big business developers or wealthy heiresses. But hardly any farm estates pay the estate tax now, so they don’t need this help.
If hardly any pay them, then it doesn’t make much sense to single them out and make them pay, does it? Just what portion of the “billions” do estate farms contribute? We’re not told.
Later on we’re told:
The Congressional Budget Office studied the number of farm estates that pay the estate tax. At the current exemption, CBO estimates that each year, out of the millions of people who die, only about 123 farms in the entire country would owe estate taxes.
Each year, only 15 of those farms - about .003 percent of American farms - would not have enough liquid assets to pay the tax.
More fun with numbers. 15 of 123 is well over 10%. We go from talking about the 123 farms which are part of large estates, to talking about ALL American farms, even ones which aren’t part of any estate.
Despite the misconception that the estate tax impacts family farms, only the wealthiest people pay the tax.
What? The wealthiest people don’t have families and therefore can’t have “family farms?”
This legislation provides loopholes so that the wealthiest in this country can evade this important tax by buying and keeping farmland. In other words, if Paris Hilton’s family decided to raise and sell Shetland ponies, the family could avoid paying the tax and Paris could buy herself another yacht, or maybe a herd of Chihuahuas in diamond studded collars.
And what’s wrong with Shetland ponies? Plenty of people raise them. Maybe Mr. Ulibarri got kicked by one during his formative years.
Now I have a question for a tax attorney or accountant: Isn’t it true that a wealthy family would only avoid paying the tax if the farm put them over the limit required before the tax kicks in? In other words, a $6 million estate is not going to be saved from the estate tax because of a $200,000 farm on the books. (And isn’t it true that Paris Hilton will probably need the money to pay for criminal defense attorneys, not chihuahuas?)
Instead of more exemptions, we need an estate tax that provides reasonable revenue for important programs that benefit everyone, like children’s health care, and for programs that benefit farmers, like disaster relief. Sen. Salazar should drop these new tax loopholes for the wealthy and special interests and instead look to real reform that could help farming families and all other Coloradans.
“We need an estate tax that provides reasonable revenue...” Mr. Ulibarri, you have not made a case for “need” for an estate tax at all. You have not told us what percentage of the total federal revenue comes from it, you have not told us what percentage of the federal budget is paid for from it, and you have not told us how many Americans (heirs) are affected by it.
You want real reform? How about we cut the budget so that we don’t need as much tax revenue? How about collecting more taxes in Colorado, and keeping the money here, and collecting fewer taxes at the federal level, and save money on all the bureaucrats who handle the taxes in between the feds getting them and giving some of them back to states and lower levels of government?
You seem concerned about fairness and that it’s not fair that some people have more material wealth than others. What’s not fair is the double tax the estate tax is. If it’s real estate, property taxes are already being collected. If it’s investments, income tax is already being paid. Income tax was paid when the money was earned in the first place. Sales tax was paid when the good was purchased. What, exactly, is fair about estate property being taxed again when someone dies?
And, quite frankly, the idea that “wealth inequality” needs to be corrected by the government who will use it for things “that benefit everyone like children’s health care, and for programs that benefit farmers, like disaster relief” is leftist thinking. I’m not a child, I don’t have children, and I’m not a farmer. Guess I’m not part of “everyone.” Further, I think children’s health care and disaster relief are both the responsibility of individuals (parents) and charities, not government. And after the notorious examples of waste that constituted government disaster relief after hurricane Katrina I don’t want government involved.
Quit coveting your neighbor’s goods, Mr. Ulibarri. It’s a sin.
Through deeds which bring praise a man shall prosper in every country. --Beowulf
Note: for a brief description of the difference between inheritance tax and estate tax, look here.
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