« | »

Some Rich Socialists Say: Tax My Estate!

From CNN’s Money.Com:

Super rich: Tax my estate, please

By Jeanne Sahadi, July 21, 2010

NEW YORK (CNNMoney.com) — Some high-profile, high net-worth folks on Wednesday called on Congress to impose a "strong" estate tax going forward.

"Our country is on an unsustainable fiscal path. [Revenue from an estate tax can] fund deficit reduction, additional public investment, or added assistance to those affected by the economic crisis," said Robert Rubin, who served as Treasury secretary during the Clinton administration and more recently as chairman of Citigroup.

The US government currently owns 27% of Citicorp. Which appears to be a fate Mr. Rubin wants for all of us.

Moreover, Rubin added, "our nation has always held itself out as a meritocracy and a land of opportunity, and an estate tax helps avoid accumulation of inherited economic and political power that is antithetical to this historical vision of our society."

Really? Then why did such a tax never occur to the framers of the Constitution, who surely gave such matters a lot of thought.

In fact, the US never even had an ‘estate tax’ until 1862, and then it was only temporary, to help pay for the Civil War.

It was only re-imposed ‘permanently’ as part of the Revenue Act of 1916, which introduced the modern-day income tax. Estate tax rates started at 1 percent and climbed to 10 percent on estates over $5 million – which is over $1 billion in today’s money. 

Rubin was joined by former hedge fund manager Julian Robertson, Walt Disney’s grand-niece Abigail Disney and AFL-CIO president Richard Trumka on a call organized by liberal group United for a Fair Economy.

Mr. Trumka is practically an avowed Communist. We suspect the rest are of a similar bent.

For the record, United For A Fair Economy describes its mission as “raising awareness that concentrated wealth and power undermine the economy, corrupts democracy, deepen the racial divide, and tear communities apart…supporting and helping build social movements for greater equality.”

Like a lot of other tax provisions, the ultimate fate of the estate tax is still very much in limbo on Capitol Hill.

This year, to everyone’s surprise, Congress allowed the estate tax to lapse altogether for one year. And barring further action, the estate tax will be restored in January to its 2001 levels, which no one likes — a $1 million exemption and 55% top rate

The individuals who spoke out on Wednesday are advocating for an estate tax that is equal to or stronger than what was in place in 2009.

Last year, the first $3.5 million of a person’s estate was exempt from the tax, and the rest was taxed at a top rate of 45%. President Obama has proposed making the estate tax permanent at those levels.

But there are other proposals, including some for full repeal. The most well-known is a bipartisan proposal from Sens. Blanche Lincoln, D-Ark., and Jon Kyl, R-Ariz., which calls for a $5 million exemption level and a top rate of 35%

Notice that they are talking about taking nearly half of the value of estates that could just amount to a nice house or a family farm.

The Congressional Budget Office estimates that if nothing were done and a $1 million exemption level were restored, the estate tax would raise $419 billion over 10 years. Obama’s proposal would reduce that intake by $244 billion, while full repeal would reduce revenue by $502 billion

Those who support an estate tax say, among other things, that it bolsters charitable giving, since making bequests is a tax-deductible event and reduces the size of one’s taxable estate.

Warren Buffett and Bill Gates have called on billionaires to become uber-philanthropists by giving away at least half of their net worth to charity. Doing so would substantially reduce the taxes their heirs would owe and therefore greatly reduce Uncle Sam’s take…

Somebody needs to tell Messrs Rubin and Trumka that there is a fund that anyone can voluntarily contribute to in order to help pay down the federal deficit with a ‘Gift Contributions to Reduce Debt Held by the Public.’

Oddly enough, past contributions seem to be fairly meager. For example, the entire total for the fiscal year 2009 only amounts to $3,063,057, which is the highest total on record. In 2004, there were only a total of $664,911 in contributions.

But as we know, liberals and other socialists are only generous with other people’s money.

This article was posted by Steve on Thursday, July 22nd, 2010. Comments are currently closed.

5 Responses to “Some Rich Socialists Say: Tax My Estate!”

  1. Landshark says:

    –For the record, United For A Fair Economy describes its mission as “raising awareness that concentrated wealth and power undermine the economy, corrupts democracy, deepen the racial divide, and tear communities apart…supporting and helping build social movements for greater equality.”–

    Well, except for when all that concentrated power and wealth is in government hands.

    Like most of our problems, I blame economists. They spend a lot of time talking about “externalities” and “market failure” and yet never connect these concepts to government action.

    All the estate tax does is kill the continuity of small farms and businesses. The mega-rich use all kinds of estate planning tools to avoid these pesky taxes. And liberals decry the rise of corporate farms with a straight face…

  2. NoNeoCommies says:

    I think it would be great if someone on the right paid for a national ad campaign to inform the public and the rich libs that they can give all of their money to the government if they choose while exhorting them to prove they care by doing so.

  3. Tater Salad says:

    Good bye to the Blue Skies of America! Thanks to Barack Obama and the left wing of the United States:


  4. proreason says:

    I’m in favor of a wealth tax, for estates over a very high limit, about $100M.

    People with estates of that size essentially pay 0 taxes. They hide their money, or at best, put it in non-taxable municipal bonds: in either case, very few of them invest it in the economy. Most estates of that magnitude are inherited, so the recipients didn’t earn the money. They have armies of lawyers to make sure it isn’t taxed. The tax code was written by their lawyers. They have hundreds of ways to skirt paying taxes, including bribing public officials.

    As an example, in the year before John Kerry ran for president, his wife paid less than $6 million in taxes on an estate of about $1 billion. It was probably the only year she paid ANY taxes. That is 6/10th of 1 percent of her net worth….roughly equivalent to a normal person paying $600 a year or so in income taxes (assuming $100K in income and wealth). They also get major tax breaks on their properties, because their minions write the local tax code as well.

    People with estates of that size control about 25% of the personal wealth in the country (note: it’s very difficult to pin that number down. Their armies of lawyers make sure of that). That number is probably much higher after the marxist induced meltdown of 2008, from which the mega-rich emerged relatively unscathed (since they have so much money, they don’t risk it in the stock market, low-end real estate, or risky business ventures).

    The reason I say the level needs to be so high is that at about that level of wealth, the estate becomes self-sustaining. They can live a lavish lifestyle, pay their lawyers, hide their money and still beat inflation. Below that level, it’s just about impossible to grow an estate without taking risks (business or investment risks)….and people who are taking risks are already taxed, either on their personal income, business income or investment income. Above that level, they take no risks and are not taxed.

    Also note, that when inflation is low, people at that level of wealth thrive. Basically, they just want to beat inflation after taking out a few million a year for pocket money. For most of them, they invest in rolling municipals (i.e., not taxable) and other low-risk investments (the other investments are in off-shore accounts so not visible to the tax authorities. The rolling municipals were mostly purchased at rates between 3% and 7% years ago, so they are still making a nifty return. The nifty retun is MUCH better when inflation is low. If you are making a 3% return when inflation is 3%, you are eating into your estate because you have to take out your pocket millions. But when inflation is 0, then a person with a billion dollar estate could take out $10 million a year and still grow the estate by $20 million for that year. Pretty nifty deal for the mega-rich, no?

    None of this is by chance.

    By the way, a wealth tax of about 3% on the estates of the mega-rich would generate about as much as the income tax for the whole country, and it would have the side benefit of forcing them to make higher-risk investments to sustain their estates. What higher-risk means is that they would have to invest their money in the economy, instead of hiding it and getting returns from bonds from the most inefficient entities in the country, governments. (Municipal bonds are just a scam to make it possible for rich people to pay no taxes. Remember, their lawyers wrote the tax code.).

  5. Landshark says:

    The contortions people will execute to justify theft never cease to amaze me.

    http://www.taxfoundation.org/news/show/250.html Shows total taxes paid in ’07 was >1,115,000 million, or about 1.1 TRILLION bucks.

    There is simply no way a 3% wealth tax could replace that amount.

« Front Page | To Top
« | »