The “death tax” won’t die
Today's Financial News - Posted January 12, 2009
The inauguration may be next week, but the campaigning for a second term has already begun. Reading the headlines may make Obama look like he is fighting for you and I. But dig a little deeper and you may be surprised by what you learn.
By Andrew Snyder, TodaysFinancialNews.com
Baltimore—(TFN): As the nation’s economy is driven deeper and deeper into a throat-crushing recession, Obama’s campaign promises are looking like the empty vows the Right painted them to be.
In October, the senator pitched budget and deficit reform. In January, he tells us to expect record, trillion-dollar deficits for years to come.
In October, he promised to cut wasteful spending. In January, he tells us he wants to toss nearly a trillion dollars in taxpayer money into the economy.
In October, he promised to fight to keep the burdensome federal estate tax. In January, he tells us he will keep his word and take 45% of all estates worth $3.5 million and higher.
Remaining true to his beliefs
In an effort to appear to be “fixing” the economy, Obama is willing to unravel scores of campaign promises. After campaigning furiously against upper-income tax reductions, increasing taxes on the nation’s top earners, Obama now feels, would pull precious cash out of the economy.
He is right, but I guess dead people’s money does not count.
Imagine owning a family farm valued at $5 million. When you die, your heirs will be stuck with a bill due to Uncle Sam of over $2 million. Chances are, the inheritors will be forced to sell the property just to pay the tax.
It is the same deal if you own the small business down the street. You had better hope it is worth less than the estate-tax threshold. If it isn’t, your beneficiaries could be writing the government one heck of a check, even though you already paid countless amounts of money over the years in taxes.
The value of the nation’s economy is plunging at a tear-jerking rate while Washington’s debt soars by record amounts. There is no questioning why Congress wants to keep the estate or “death” tax in the law books, even though it is set to expire next year. The high-percentage tax adds valuable dollars to the Treasury’s coffers.
More harm than good
What our elected official are too blind to realize is the benefits of the overly zealous tax are a far cry from the burden put on the folks expected to fund it. If allowed to sunset, tax experts estimate the estate tax would take $500 billion out of the government’s tax accounts over ten years.
The revenue is a small fraction of the trillion-dollars or more annual deficits we will be forced to endure over the next decade. Even worse, the estate tax will steal that money from the hardest-working and most successful class of people in the nation.
We are not taking from the rich and giving to the poor. We are stealing from the nation’s best and the brightest and using the money to buy food stamps.
When scores of small businesses are forced to close their doors and fire their workers to pay a tax, the economic ramifications are far worse than the federal government not receiving a pittance of its annual revenue stream.
Some estate-tax proponents say the measure is designed to ensure the nation remains a meritocracy and does not evolve to an incestuous aristocracy. The law may prevent such money channeling a tiny fraction of the time, but in the majority of instances, hardworking, small-town businessmen are slammed by the government’s greed.
Obama’s latest speeches and campaign-promise withdrawals may appear as concessions to the Right, but dig just a bit deeper and his “spread-the-wealth” ideology is blatantly obvious.
He may be putting his hand on a bible next week, but Obama’s top priority remains racking up as many votes as possible. The nation’s economic success comes a distant second.
Do not believe anything different.
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