Re: Re: Re: Death tax gasps

On Tue, 26 Jul 2005 12:59:53 GMT, "Archmedes" <me@xxxxxxxxxxx> wrote:

>"VRWC4" <nospam@xxxxxxxx> wrote:
>
>>> 'DEATH TAX' - are you people insane, or just dumb? You pay tax if
>>> you inherited an estate of a certain size that only .1% of americans
>>> have, not because someone died!
>
>> False. The death tax (euphemistically known as "Estate Tax") is a
>> direct attack on Property Rights. It is an arrogant means of
>> inhibiting the very family economic momentum that family patriarchs
>> worked so hard to achieve during their lifetime. There is only ONE
>> motive behind the death tax -- the politics of envy. It is a
>> Communist inspired idea that continues because those who impose it are
>> utterly out of control and have proven that they are unworthy of the
>> trust and power that our society has foolishly given them.
>
>What an idiot!!
>_________________
>
>FactCheck.org
>Estate Tax Malarkey
>Misleading ads exaggerate what the tax costs farmers, small businesses and "your family."
>June 6, 2005
>
>
>Summary
>
>In TV and radio ads two conservative groups greatly overstate the burden that the federal estate tax puts on heirs to a family farm or business.

This acknowledges that the burden exists. If it exists for ANYONE,
it's too many.

>One ad claims the federal estate tax "can bury your family in crippling tax bills," which is untrue for nearly all of those who will see

The key word in this incompetently posted article sentence above is
"nearly". Even if that were true (it's not), that means that SOMEONE
is not being treated equally under the law.

>the ad, including the large majority of farm and business owners. Both ads claim the estate tax is a "double tax," which is only partly true, and mostly false when it comes to very wealthy families.

LOL! At least these looters admit that the problem exists with snide
little code words like "partly true" and "mostly false".

>We take no position on whether the estate tax should or should not be repealed permanently.

How incredibly noble of them. Must be nice to go through life being
neutral on all the moral issues that have a minute to minute affect on
human happiness and prosperity. Their courage is underwhelming.

>The claims made in these one-sided ads, however, present a misleading picture of who is actually affected by the tax.

I PERSONALLY know eleven families in California who experienced family
wrecking trauma over the death tax crisis with their
multi-generational family farms in just the last 20 years. 7 of the
11 lost their farms -- a total of almost 3000 acres, as a direct
result of being unable to pay the death tax on their deliberately and
preposterously over assessed property. The other four were able to
get their land properly structured so the death of the owner did not
trigger the death tax. They should NOT have been forced to do that.
But then, what else is new in the People's "Republic" of California?

>Analysis

(IOW -- unsubstantiated opinion)

>
>The American Family Business Institute and Free Enterprise Fund launched a TV and radio ad campaign May 10 that targets potential swing votes in the Senate for full repeal of the estate tax. The group said it will run different versions of the 30-second and 60-second ads in Montana, South Dakota, North Dakota, Maine, Arkansas, Louisiana, Nevada and New York as part of a $15 million campaign leading up to a Senate vote expected before the August recess.
>
>Contrary to ad's claim that "your family" might be crippled, the vast majority of families actually are not affected by the estate tax. In fact, less than 3 percent of deceased adults in 2002 had estates subject to the tax, according to the nonpartisan Urban-Brookings Tax Policy Center and figures from the IRS.

So, at least they admit that there ARE some hapless souls out there
who are NOT being treated "equally under the law" for no other reason
than the fact that they had the unmitigated audacity to own and build
a substantial family estate. It's a national disgrace. People who
support it are looters. Eventually, the looters will need to be dealt
with in the streets.

>And though the ad focuses on family farms and businesses, the truth is that very few actually pay the estate tax. The Tax Policy Center projects that roughly 440 taxable estates were primarily made up of farm and business assets in 2004.
>
>And even considering estates for which farming or business was a sideline, the Center found only 7,090 taxable estates for 2004 that included any farm or business income. That's still just 38 percent of all taxable estates. The fact is that repealing the estate tax entirely, as the ad advocates, would benefit mostly non-farmers and non-business-owners.

So what? Who has a RIGHT (or even a duty) to give a *** who gets to
keep what they earn?

So, looter -- tell us: What portion of what YOU earn and own belongs
to me and why?

[Remaining propaganda graciously ignored]


>The ad would have been accurate had it said that "some families" are affected.
>
>"Cost Them Everything?"
>
>Far from imposing tax bills on farms and businesses that "cost them everything," the average estate tax paid by all farm and business estates in 2004 was just under 20 percent of the value of the estate, according to calculations by the Tax Policy Center.
>
>The effective rate was far less for smaller estates. Of the 440 taxable family farm and business estates in 2004, two out of five paid an average rate of only 1.6 percent. These were taxable estates valued at less than $2 million.Very large estates valued at over $20 million paid at an average effective rate of just over 22 percent, a hefty tax bite but well short of "everything."
>
>These effective rates are not to be confused with the top rate, which is currently 47 percent. But that marginal rate applies only to what is taxed, and currently the first $1.5 million of an estate is exempt. The Tax Policy Center's figures are an average effective rate on the entire estate, including any proceeds of life insurance. The taxable portion is often reduced further through charitable contributions or special provisions that allow most farms to reduce the taxable value of their real property by 40 to 70 percent of market value.
>
>The following table shows how many taxable farm or business estates fell into various size categories, the average amount of tax and the effective tax rate they paid, according to the center's calculations:
>
>Taxable Farm or Business Estates, 2004
>
>Number of Returns
>Average Tax (thousands)
>Average Rate
>
>
>Under $1 million 0 $0 0.0%
>$1 - $2 million 190 $26 1.6%
>$2 - $3.5 million 60 $190 7.5%
>$3.5 - $5 million 40 $449 12.0%
>$5 - $10 million 80 $1,322 19.3%
>$10 - $20 million 50 $2,832 22.9%
>More than $20 million 30 $23,442 22.2%
>All 440 $2,238 19.9%
>
>Source: Tax Policy Center, Table T04-0163
>
>These 440 taxable estates are those for which farm or business assets made up at least half the total value of the estate. They represent only 2 percent of all 18,800 taxable estates in 2004.
>
>Worth noting is that family-owned farms and closely held businesses already receive special treatment under current law. Heirs who agree to keep the farm or business assets within the family for 10 years after death can reduce the taxable amount of the estate by 40 percent to 70 percent. And if the farm or business is at least 35 percent of the gross value of the estate, payments can be spread out over 14 years.
>
> AFBI TV Ad "Generations"
>
> Announcer: They freed the world from tyranny, then came home to build family businesses and farms. Heroes in war and peace. They paid taxes all their lives, but not the IRS hits this "Greatest Generation" with an unjust double tax, the death tax.
>
> Don Malarkey (WWII Vet): In war and peace, my generation stood up for what's right. Join us now and help us end the unfair death tax.
>
> Announcer: Tell Max Baucus to side with family business, not the IRS.
>
>"Double Tax?"
>
>Both the radio and TV ads call the estate tax a "double tax," which is only partly accurate. It is true that some portion of a taxable estate might be made up of cash that was taxed before, when it was earned as income. But many estates are made up of stocks, bonds, real estate or other holdings that have appreciated greatly in value over the lifetime of the person who owned them. The owner didn't pay taxes on that profit during his or her lifetime because they weren't sold and the profits weren't turned into cash, or "realized." Furthermore, heirs who inherit such appreciated assets won't have to pay tax on that unrealized profit either. The estate tax is the only tax that applies to such unrealized capital gains.
>
>Furthermore, such unrealized, untaxed capital gains make up more than one-third of the average estate, according to a study by economists James Poterba of the Massachusetts Institute of Technology and James Weisbenner, who was on the staff of the Federal Reserve Board when the study was published in 2000. Weisbenner is currently at the University of Illinois at Urbana-Champaign.
>
>Their study estimated that unrealized capital gains made up 36.3 percent of the value of all estates in 1998. That would make the "double tax" claim 63.7 percent true, and just over one-third false.
>
>For very large estates it is mostly false. The study also found that estates worth more than $10 million were 56.4 percent made up of unrealized, untaxed capital gains.
>
>The Poterba-Weisbenner study was first released as a working paper by the National Bureau of Economic Research, a nonpartisan organization of mostly academic economists, and later published by the Brookings Institution. We have found no study disputing these findings. In fact, they may be understated. For one thing the authors couldn't find any way to estimate the unrealized capital gains on art work or other collectibles, which can make up a sizeable part of some estates. More importantly, the very richest Americans aren't covered by this study, because the Federal Reserve Board survey on which the study is based doesn't include them. It is quite likely the averages are even higher for billionaires, whose fortunes are often built on appreciated stock or real estate that would go untaxed at their death but for the estate tax.
>
>Emotional Appeals
>
>The ads make some emotional appeals worth noting. The TV ad feature World War II veterans from the popular HBO series "Band of Brothers," while an announcer tells viewers that these men "paid taxes all their lives" and are now being subjected to a "nightmare" tax. Actually, of course, WWII vets are no more likely than anyone else to be subject to the estate tax when they die. The estates of veterans and non-veterans alike owe tax only on amounts exceeding $1.5 million. That goes up to $2 million next year.
>
>The radio ad also characterizes the tax as the "IRS death tax." Opponents of the estate tax have long used the term "death tax" even though it is wealth, and not death, that is being taxed. Adding "IRS" to the mix makes it sound as though the unpopular tax collectors were responsible for enacting it, and not elected members of Congress.
>
>Sources
>
>Leonard Burman, William Gale, and Jeffrey Rohaly, "Options to Reform the Estate Tax," Urban-Brookings Tax Policy Center, Tax Policy Issues and Options No. 10, March 2005.
>
>Tax Policy Center, Table T04-0164, "Current-Law Distribution of Gross Estate and Net Estate Tax By Size of Gross Estate, 2004: Returns With Any Farm or Business Assets."
>
>Tax Policy Center, Table T04-0163 , "Current-Law Distribution of Gross Estate and Net Estate Tax By Size of Gross Estate, 2004: Farms and Businesses."
>
>Leonard Burman and William Gale, "The Estate Tax is Down, But Not Out." Urban-Brookings Tax Policy Center, Tax Policy Issues and Options No. 2, December 2001.
>
>Scott Weisbenner and James Poterba, "The Distributional Burden of Taxing Estates and Unrealized Capital Gains at Death," Rethinking Estate and Gift Taxation, eds. W.G. Gale, J.R. Hines, and J. Slemrod (Washington: Brookings Institution, 2001) 422-449.

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