Estate Tax

[Editor's note: The original writer is finally back!]

The estate tax is a tricky subject. So many valid points can be made for both sides of the issue. As a freedom loving kind of guy, I don't like the idea of monied aristocracy, with great amounts of wealth held by a small group of people (i.e. Vanderbilt's, Carniges, Fords, etc). But as a freedom loving kind of guy, it is a tax, which means the government is saying pay it or you will go to jail (or we'll take it anyway, and you will still go to jail). When you get a pay check you pay taxes (usually, not always. Some careers don't withhold taxes, so they get the fun of sending out tax checks on a regular basis. They also tend to be in careers where they make more money. Funny how people in that position tend to be the ones that complain most about taxes. I wonder if there's a connection there? Note: I'm not one of them). When that money is spent, its taxed again. When the money is invested to produce more wealth, any gain is taxed again. And if that's not enough, when you're dead, the government is taking one last dig at it. When is enough?

When determining whether or not I think a tax is fair, I ask myself does it apply to me? The next question is, will I fairly judge it, if it doesn't? If your answer to that question is "I don't care, it doesn't effect me", then you are not being academically honest. Though I'm not going to be affected by the estate tax, lets draw an analogy. Let's take a look at Larry, our average guy. Suppose Larry's house and stuff is equal to $100,000. Larry hits the lottery, wins $50,000,000,000,000! (Yeah Larry!). Running out of his house jumping up and down, he gets hit by a car, and the ticket is never turned in (so Larry's stuff still totals $100,000, I just added the part about him winning the lottery so that in this example, Larry died happy). Now his heirs will inherit his $100,000 worth of stuff. But say, an estate tax is in effect. The Feds want 30% ($30,000) and the state wants a sum equal to 1/2 that (another $15,000 - yes, New York is in on this too). That means they demand checks totalling $45,000. And lets say, $90,000 of his wealth is in his house, so the heirs only have $10,000 in cash. They must sell the property for at least $35,000 and send all the wealth to the government. There are other options available, loans, liens, etc, but my point is, if his heirs can't come up with the $45,000 check, the government will take the house and keep what ever it gets from the house including anything over and above $35,000. The heirs get $10,000. Now I ask you, is that fair?

Lastly, the editorial makes reference to how much ending the estate tax will cost the government. And this is something that really bugs me. It won't cost the government a cent. Three hundred dollar Army hammers, computers (check out how the IRS and CIA are doing on system upgrades), and public works (hear anything in the news recently on Boston's "Big Dig"?) are costs to the government. What we pay the government in taxes is not the government's income. Its taxes. Politicians and their lap dogs love to change the terms of a debate depending upon which side of a argument a group is on. If you want to raise taxes for more government spending, then you're enhancing revenue because everyone needs to "pay their fare share" (that's an actual quote from Hillary Clinton). After all, who could be against every one paying their fare share for all the great and good services governments supply (that hammer may cost $300, but you have to admit, it is really, really nice). We the people, must do our best to ensure that governmental issues are debated in the arena of free ideas, in real and honest terms. George Orwell wrote some great stuff on this very subject, I highly recommend it. If we allow politicians on either side to define the terms of the debate in words of their choice, then the debate is no longer fair. Just as it's not fair to be in favor of a tax just because it doesn't affect you. Just as We The People have both a right and a responsibility to act collectively at the ballot box to hold government accountable for when enough is enough.


The estate tax, also known as the death tax, is the share Uncle Sam takes from what the dearly departed has left behind. That is in addition to what he takes before the dearly has departed. But the real problem occurs when much of what has been left behind is in the form of land, buildings, livestock and equipment instead of cold, hard cash. And since the IRS prefers greenbacks to combines, many farm families and other small businesses have to sell off what makes the operation run in order to gain the liquid assets needed for the tax man. This can result in either a much-reduced operation or no operation at all.
http://www.fb.org/views/focus/fo97/fo0310.html

"Farmers and ranchers work long, hard hours over a lifetime to build their businesses," said Charles Kruse, a member of the American Farm Bureau Federation board of directors and president of the Missouri Farm Bureau Federation. "Often, farm heirs must sell business assets to pay estate taxes. When taxes drain capital from a farm business, the profit-making ability of the farm is destroyed and the farm business dies."
http://www.fb.org/news/nr/nr97/nr0319a.html

Although only about four percent of all farmers owe federal estate taxes, repeal of the tax would affect a much broader group of farmers, according to USDA Economic Research Service Senior Economists Ron Durst and James Monke.

"A significant benefit would be relieving farmers of the administrative burden of filing the tax returns, since many of those required to file now do not actually
have to pay any taxes, they said at the Agricultural Outlook Conference in Washington."

The number of farm estates that must file tax returns, but owe no tax as a result of special provisions in the law, is nearly double the number of farm estates that actually owe taxes.
http://southeastfarmpress.com/mag/farming_farm_families/