Time to kill the Death Tax
Today's Washington Times has an interesting Op-ed piece on the Political battle over getting the death or estate tax repealed permanently. Right now the exemption is being increased every year till 2010 when the tax then goes back to its 2001 level.
The article is mostly about the political aspect of getting this stupid tax repealed. In 1997 my father passed away. He was survived by me and four other children. He left money in his will to all of us, plus one sister, eight grandchildren and some nieces and nephews. I was the largest beneficiary of my father's estate, but none of us got rich from my father's passing.
I was my father's co-executor along with my Uncle Bobby. My father's whole estate was worth about 725,000. The exemption was 600,000 then. The tax on the last 125,000 was approximately 80,000 dollars. That is a combined 60-70 percent federal and state tax
My father works all his life and has to toss 100,000 down the toilet to attorneys and the government. The tax is sick. It's meant to tax the rich, but who among my father's heirs is rich? None of us.
Now its all well and good to repeal the Federal tax, but that still leaves the state taxes. I may be wrong, if I recall correctly the state estate tax is based on the federal return in most instances. I think it was in Florida. So if the Federal tax is eliminated, the state tax could well go too. Unless state legislators pass new legislation. A true repeal may not even happen if the federal tax is alleviated. State governments are counting on this money.
The entire op-ed can be found at- http://washingtontimes.com/commentary/20050621-085511-1442r.htm
Death tax diagnosis
By James L. Martin/Lewis K. Uhler
June 22, 2005
Senate Minority Leader Harry Reid's designation of Sen. Charles Schumer, New York Democrat, to be his chief negotiator on the Death Tax issue is extraordinarily revealing.
The Democrats are scared to death of the issue which provided the margin of defeat for Tom Daschle and has become a powerful issue in other states, as well. The marching orders to Mr. Schumer, the Democratic Senatorial Campaign Committee chief, are to defuse the issue before it takes down other small red-state Democrats up for re-election in 2006.
Apparently Mr. Reid and company have been reviewing the polls that portend disasters in certain states for votes to keep the death tax. Recently, Frank Luntz polled in Maine, North and South Dakota, Indiana, Colorado and Arkansas and found 85 percent support for killing the death tax outright or significantly reducing it.
These are states in which small family businesses, ranches and farms dominate the landscape. Hence, the Schumer proposal for a "compromise" solution, exempting "small family businesses." They have the lingo down pat on the death tax, but not the solution.
Only one problem. Neither the "fix" nor the politics work -- unless, of course, Senate Republicans fall for the Democrat line there aren't 60 votes to "Kill the Death Tax."
(1) The "fix" is a retread of Arkansas Democratic Sen. Blanche Lincoln's S. 34, which seeks to re-enact IRS Code 2057, repealed in 2004, possibly the most complex estate section in the code. Recent analyses have demonstrated the proposal would provide relief to only about 5 percent of small businesses. And it perpetuates the need to value small businesses upon the death of the owner, always the most protracted and unfair part of the dance with the tax collector.
(2) The votes. There are at least 52 Republicans -- and possibly more -- who will vote to "Kill the Death Tax" both permanently and immediately. (Some older folks can't wait until 2011 to "Kill the Death Tax.") This was the objective of the "Kill the Death Tax" coalition's Senate campaign last fall, endorsed by Sens. William Frist of Tennessee and George Allen of Virginia and other Republicans leaders.