Howard County Blog

A Blog on what is going on in Howard County

Wednesday, June 07, 2006

The Morality of Republican Values

The Republican controlled Senate is at it again. They are moving forward
with huge tax cuts for the wealthiest families in America. The party of
“values” seems to value only one thing and that is paying off their wealthy
contributors with tax cut upon tax cut. Paul Krugman has a great editorial
about this situation in Monday’s New York Times.

The Senate almost voted to repeal the estate tax last fall, but
Republican leaders postponed the vote after Hurricane Katrina. It's easy to see why: the public might have made the connection between scenes of Americans abandoned in the Superdome and scenes of well-heeled senators voting huge tax breaks for their even wealthier campaign contributors. . .

But memories of Katrina have faded, and they're about to try again.
The Senate will probably vote this week. So it's important to realize that there's still a clear connection between tax breaks for the rich and failure to help Americans in need. . .

Who would benefit from this largess? The estate tax is overwhelmingly a tax on the very, very wealthy; only about one estate in 200 pays any tax at all. The campaign for estate tax repeal has largely been financed by just 18 powerful business dynasties, including the family that owns Wal-Mart.

The estate tax issue is a moral issue. Are we as a society going to give more money to the most wealthy among us while all the needs of America are neglected, for example, infrastructure security or health care or environmental protection or education? And bequeathing the debt for this irresponsible tax cut to our children and grandchildren so that billionaires can have more “capital” to invest in China or buy a nice Monet is just obscene.

Krugman concurs with the moral dimensions of this issue.

Let me remind senators that this isn't just a fiscal issue, it's also a moral issue. Congress has already declared that the budget deficit is serious enough to warrant depriving children of health care; how can it now say that it's worth enlarging the deficit to give Paris Hilton a tax break?
If this upsets you, as it does me, do something! Contact your Senators and tell them how you feel.


Anonymous Anonymous said...

"Are we as a society going to give more money to the most wealthy among us while all the needs of America are neglected...:

Um, its not giving them money - it's about not taking (and redistributing in a socialist manner) their money in the first place after it has already been taxed.

Stay with me on this one:
I know Bill Gates has tried to dispel the "supposed myth" of the family farm that gets taxed beyond its cash on hand and has to be sold to meet the estate tax requirement.

I have no idea where he (and others) gets his nerve about this not really affecting middle americans - only those as wealthy as himself, but our family almost lost our farm when my grandparents passed away. Many peices of equipment had to be sold off to meet the tax, which in turned further burdened the farm with decreased crops (read here: profits) for nearly 2 years. (I suggest those with conventional desk jobs cut their take home pay by 60%+ for several years to see how it feels.) We are then given the only option of selling the property to get out of debt - something that just doesn't sit right with a farmer since you just know the next crop is right around the corner...

When a non-farmer is forced to change jobs, it doesn't necessarily alter his way of life - it does for a farmer...

Anyway - if you keep talking about estate taxes - recognize that not all assets being taxed are liquid and can't be taxed without destroying that very asset. It's frustrating to hear your broadbased and seemingly naive comments on other people's money.

12:10 AM  
Anonymous James Williams said...

I was going to comment on the same thing when I first read the line: "Are we as a society going to give more money to the most wealthy among us..."

The last time I checked, society does not "give" people money.

Just my own family's ancedote. When I was young, my great-grandfather passed away. The family owned a Bakery since the mid 1960's. The bakery itself had become a family business and was located basically as part of their house. However, when he died and tried to pass it down to my grandmother, the value of the business was so much that the family was forced to sell off the business just to pay the taxes for the value of the business.

Keep in mind my grandmother was not rich at all. In fact, so much oney was spent keeping the bakery in business that house was kept up just enough to make it livable. Unfortunately, instead of being able to keep the business going and allowing my grandmother and others in family who worked there to continue to do what they love, they were forced to get rid of the business to pay the estate taxes.

So demos, your suggestion that this tax only affects "rich people" is completely off base and, to my family, offensive. Trust me, society did not "give" that money to my grandmother. My grandmother and other members of the family worked hard in that bakery to earn the money to make that business profitable. Tthe family tried everything they could to keep that bakery within the family, including the possibility of going deep into debt. But unfortunately they had to give it up because of the estate tax. That was yet another "mom-andpop" shop that went nuder due to an estate tax that you claim only affects "rich people".

8:12 AM  
Anonymous Anonymous said...

James - Thanks for your comments. I see this from the small farm operation, but you are correct: It truly affects small business owners of all types. Thanks for broadening my thoughts on the issue.

I'm sorry your family couldn't end up keeping the business. That is something I can't get people who work "conventional" jobs to understand: We'd rather have our life and business than the money. Maybe that's counter-intuitive to most people but that's the reality!

Thanks again.

10:39 AM  
Anonymous David W. Keelan said...

I was going to comment on similiar lines, but you folks said it all. It doesn't stop with farmers. Dentists in private practice is another good example. How about the family who owns and operates a restaraunt that produces $1M in revenue which despite their expenses makes them look rich.

5:26 PM  
Anonymous Anonymous said...

The IRS, Wikipedia and all have more thorough explanations of the estate tax and gift tax and ways those who plan to encounter it or are suddenly faced with it can considerably lessen its effect.

You'd be amazed what financial/estate planners can do. Maybe someday I'll call one.

The first $2 million is excluded altogether from estate taxes for 2006-2008 and then the first $3.5 million starting in 2009. Combine that with the ($12,000 per year tax free that one person can give anyone else) x (as many people as you want to give it to) x (2 spouses each able to give $12,000 away like that) and that adds up to a whole lot of estate that can be transferred beforehand to further avoid estate tax. And that's just a start.

10:25 PM  
Anonymous Anonymous said...

You say "starting in 2009." Actually as written the tax goes away in 2010 for that year only and then the limits go back to 1M. The provisions sunset because it was the only way to get it passed.

So, if you die in 2010, you're good to go and can pass everything on tax free, regardless of how much. But if you die Jan 1, 2011, you go back to the inital old limits.

*That's our government* Arbitrary standards not based on any rationalization of need - just taxing for the sake of taxing...

11:39 PM  
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