Estate Tax -- YES! Repeal -- NO!
We've been tossing around some themes lately, to come up with ones that are applicable on both the state and federal levels. Try this one on for size:
Democrats are fiscally responsible, Republicans are not.
It's not hard to demonstrate. At the federal level, a Republican President and a Republican majority in both houses of Congress have managed to take a budget surplus built up by Democratic President Bill Clinton and within five years have turned it into the worst federal deficit in our nation's history.
September 17, 2005 - Death and taxes
Hurricane Katrina caused massive destruction and hundreds of deaths on our own beloved Gulf Coast. President Bush on Friday promised that the federal government would make things right, at a cost estimated to be more than $200 billion.
But, according to President Bush, that does not mean a rollback on the tax cuts for the wealthy. They should not be the ones to suffer in any way from the hurricane's carnage and devastation. Neither should the Republicans stop in their tracks their attempt to separate death and taxes, to repeal the Estate Tax on multi-million-dollar estates that pass from one generation to another, despite the healthy and much-needed boost to the federal budget that the once-in-a-lifetime tax brings in each year.
No, Bush says, to pay for making things right in New Orleans, more "unnecessary government spending" would be cut from the deficit-ridden federal budget.
Just where is this "unnecessary government spending"? Does he mean further cuts, beyond the $10 billion already cut, in the Medicaid program? How about more cuts for the Army Corps of Engineers? What exactly is the "unnecessary government spending" that Bush is talking about?
I wish with all my heart that the Iraq War was on his list of "unnecessary government spending," but I know it is not.
September 9, 2005
The estate tax is a tax that only applies to the very wealthy. That is a good thing, not a bad thing. People with more money should pay more in taxes, to keep the society that allowed them to accumulate their wealth operating on an even keel. Fairness is the operative concept.
A repeal of the estate tax would give yet another tax cut to those people in America who can most afford to pay taxes, and further put the burden of the federal budget on the backs of working and middle-class people. The deepening debt of the federal budget over the past five years has been due in large part to two factors -- the mounting costs for the illegal war in Iraq, plus the excessive income tax cuts for the wealthy which were voted in when the budget was actually balanced, pre-Bush.
Overview: Taxes are usually paid when money or assets change hands. Income taxes are paid on wages or salaries. Sales taxes, gasoline taxes, etc. are paid on assets purchased with after-income-tax money. Capital gains taxes are paid on the profits when investment assets (stocks, bonds, real estate) are sold. The same concept applies, and should apply, to assets which change hands upon the death of the owner of those assets. In actuality, capital gains taxes should rightfully be paid on all assets which have increased in value since the now-deceased owner bought them. But, particularly for larger estates, that would involve keeping detailed records of purchase prices for all sorts of assets (diamond rings, gold watches, paintings, silverware, etc.) over a long period of time. That's where the standard exemption comes in, as a substitute, an assumed basis if you will, in place of all that record-keeping. Only if the value of an estate exceeds that relatively high benchmark (compared to the assets of ordinary people) will a tax be paid.
The estate tax exemption, like the alternate minimum income tax which has crept up the last few years on middle-income earners, may need adjustment from time to time. But an outright repeal would over-burden the working people in this country, who will have to make up for the shortfall a repeal would create, and who will find it even harder to work their way into that exalted category where estate taxes are even a consideration.