First, everybody reading this column who expects to die, raise your right hand. Okay, right away I have bad news for those of you who didn't raise your hand. Then, those of you who expect to leave an estate worth at least $1.35 million, put your hands down. All of you poor people with your hands still in the air can relax; you will pay no "Death Tax".
Oh, there will be hands out when you begone to the great beyond even if you die flat broke. But according to the IRS in 1999 fewer than fifty thousand estates had to pay the tax and half of the money collected came from the 3,000 estates worth $5 million and more.
The estate tax rates are steep. They start out at 43% and top out at 55%. But not to worry for the terminally wealthy, or the wealthy terminals; there are lawyers who handle these things so that the average taxable estate pays only a 25% rate. Our villain in reality doesn't seem quite so evil, does it.
But what about the hero's brave battle to save the family farm? Well, in reality those who have looked the hardest, The Iowa based American Farm Bureau Federation, can't name a single farming family threatened by the Death Tax. The average farm estate is only worth $400,000, well below the $1.3 million threshold. And the tax code allows a farming couple to leave their heirs $4.1 million in agricultural land, equipment and animals without paying any tax as long as the land is farmed by the heirs for ten years. If they sell out during that decade they pay tax only on the value over the threshold. If they keep farming, they pay no tax.
So who is our hero really defending in the "Death Tax" docudrama? Well in 1999, according to the IRS, in the 1,222 estates that had farm assets valued above $1.3 million, farm properties made up only 10% of those estates. In other words, we're not talking about rich, farming families. We're talking about rich families who own farms, the way Marie Antoinette owned her little cake farm at Versailles. And make no mistake, these are people determined to take their farm tax breaks with them when they go.
Now I have hopes of being filthy rich some day and when I am I plan on complaining loudly about all the taxes my army of accountants can't help me to avoid. But in reality for 99% of all Americans the "Death Tax" simply does not exist.
So why have it at all? Well, the estate tax was created by people who were just as smart as we are; our great-great-grandparents. They created it because they saw what happened when a nation's wealth was concentrated into a few very large family fortunes.
Wealth like that protects itself. It buys lawyers and politicians to prevent taxes and laws it doesn't like. What some call entrepreneur spirit it considers risk and avoids it. What some would call healthy competition it considers a threat and destroys it. And it marries within its own "class", thus combing with other fortunes, concentrating wealth even further.
This was not a theory to those who created the estate tax. It was a fact. They saw it with their own eyes. If you want to see who would benefit by repealing the "Death Tax" visit the summer palaces of the idle rich in Newport, Rhode Island. Those are the people oppressed by the "Death Tax." And nobody else.
But the public doesn't want to see a play about poor rich families, so the script changes them to poor family farmers. Very few people want to reduce government to the size it was when Thomas Jefferson was president, so you don't mention that is your intention. And, of course, you leave out the donations the wealthy have made to you because that just make you, the hero, seem less heroic.
It's just another political farce reported as presented by the press because it's such a good story, which means the news these days is often more fiction than non.
Curtain up.
Kimit Muston is a writer living in the San Fernando Valley. If you have any comments regarding his columns he may be reached at inditer.com
If you haven't used the 'Vox Populi', get started!
Send in your comments and critique on the work of Kimit Muston. Inditer.com is a community of like minded writers. Each wants and deserves the help of the other. Do it! It won't cost a dime! You'll be glad you helped!
email Kimit Muston - - - Visit Kimit' Main Page
- - -
