death tax

Arguing the Estate Tax

One of the more interesting taxation discussions out there regards the estate tax, which is also occasionally called a “death tax”. This tax is a tax for a percentage of a deceased persons estate if it’s above a certain amount. In all fairness, this isn’t typically assessed on Grandma’s china or Grandpa’s old Chevy Corvair types of estates. This typically impacts the wealthier members of our society, which also tends to make it popular.

That doesn’t change the fact that it’s wrong.

Picture that you’ve worked hard all your life. You have amassed a sizable estate so that when your time comes, your family won’t have to worry about to much at all. Then, when that moment comes, you family learns that more than half of what you left them belongs to Uncle Sam.

This only make sense if you believe that money inherently belongs to the government and that they should have right of first ownership. They don’t. You see, the people create the wealth and should be entitled to keep it. I say this as a guy who will most likely not have an estate anywhere near that level. Right is right and wrong is wrong, so I don’t care where my estate is. This just isn’t right.

It’s easy to pick on the rich. Hell, the rich pick on themselves from time to time. However, it doesn’t matter. Progressives can trot out a whole pile of stuff that won’t be paid for if we don’t have the estate tax, but I point to all the crap that is paid for that has done nothing at all. I’m realistic to know that our government won’t return to any 1790’s levels. Ever. But if you’re going to have programs that have to be paid for, I have zero problems with them minimal and requiring them to actually work.

Today in Liberty: House Republican Leadership elections are today, terrible bipartisan idea to hike the gas tax on the horizon

“The more the state ‘plans,’ the more difficult planning becomes for the individual.” — F.A. Hayek

— Raul Labrador makes his case for Majority Leader: Rep. Raul Labrador (R-ID) pitched his candidacy on Wednesday for House Majority Leader to his fellow Republicans. “If you have an idea, I want to empower you to take it through committee. You will not always succeed, but I want you to feel like you had a fair shot. I want members of Congress to be more relevant than the staff. Why are we even here if the leadership staff is going to make all decisions any way?” Labrador asked, according to prepared remarks. “I want the process to work. If bills pass, they must pass on their merits. I don’t want any more SGR bills passing on voice votes, Transportation/Postal Reform deals that nobody has heard of, NSA reform bills that pass a committee unanimously and are changed and watered down in the Rules committee.” He also said that he wants bill text posted online for at least 72 hours before the House votes and for the Republicans to keep their pledge to “reform Congress and restore trust,” asking his colleagues if they believed that they’d followed through on that promise. “If you vote for the status quo [on Thursday], you will prove that we are still not listening,” said Labrador. “We will break our pledge and with that we may lose the ability to regain control of the Senate and eventually win the Presidency.” The vote is schedule for today. We’ll have the results posted as soon as they’re available. Courtsey of Rep. Justin Amash (R-MI), you can get an idea of how some House Republicans plan to vote.

Today in Liberty: Senate Dems outline Obamacare “fixes,” growth not keeping up with projections

“The American founders often referred to a ‘Liberty Tree.’ Our generation didn’t plant that tree - we didn’t grow that tree - we were simply handed it by the generations of Americans who came before us….Let us highly resolve not to rest until we have delivered to our sons and daughters a Liberty Tree that is just as healthy, a Constitution that is just as strong; and a nation that is just as free as those that our fathers and mothers gave to us.” — Rep. Tom McClintock (R-CA)

— Senate Dems finally rollout Obamacare fixes: After months of talking about the need for fixes to the law, six Senate Democrats have finally offered some specifics on how they plan to address at least some of Americans’ concerns. The biggest proposal is the introduction of a “Copper Plan,” which, they write at Politico Magazine, “will give consumers more control over their own coverage, spur competition and, most importantly, increase affordability.” Two of the Democrats, Sens. Mary Landrieu (D-LA) and Mark Begich (D-AK), are up for reelection this year and are thought to be among the chamber’s most vulnerable members. Despite the push for fixes, the Heritage Foundation notes that most of the six “didn’t have strong initial reservations about the massive bill when Obama signed it into law in March 2010.”

Top Ten Tax Hikes in the Obama Budget

Written by Ryan Ellis, Tax Policy Director at Americans for Tax Reform. Posted with permission from Americans for Tax Reform.

What are the top ten tax hikes in President Obama’s new budget?

There are literally dozens of new tax increases in the FY 2014 Obama budget.  In total, they increase taxes by nearly $1 trillion over the next decade.  They would permanently bring the federal tax burden to 20 percent of economic output, a level only reached in one year since World War II (FY 2000, when the economy was roaring and tax revenues were pouring into Washington as a result).

Below are the top ten tax increases in President Obama’s budget (all numbers are over a decade):

1. Chained CPI. The budget would change the definition of inflation for all federal budget purposes, including federal tax provisions.  Because tax brackets and other tax items are indexed to inflation, slowing down their growth is an income tax increase.  This is a tax increase for all Americans who pay income tax, including middle class Americans.  In the past, Congress’ Joint Committee on Taxation has estimated that enacted “chained CPI” would be a $100 billion tax increase

Louisiana Democrat Dares Republicans to Challenge Her in 2014

Mary Landrieu and Barack Obama

While they face tough odds to take control of the Senate next year, Republicans will no doubt set their sights on Sen. Mary Landrieu (D-LA) and she’s giving them plenty of ammunition to use in what could be an expensive, heated campaign.

In an interview with Politico, Landrieu stood behind her record and even suggested that she could support President Barack Obama’s gun control proposals, which will come before the Senate next month:

The Louisianian confidently voted last week for the Democratic budget with its $1 trillion in tax hikes. She was one of only 20 Democrats who favored keeping the medical device tax, an element of Obamacare that some Democrats have worked to abolish. Along with other Democrats, she backed a handful of amendments opposed by senators from conservative states restricting health care for immigrants and politically charged language to curb a cellphone assistance program.

“I do not scare easily,” Landrieu told POLITICO. “I think it’s in my DNA. I come from a family that feels very passionately and very strongly about public service and about trying to always find a balance and keep our eyes focused on representing the people and not getting too caught up in the politics of the day.”

Senate Passes Its First Budget in Nearly Four Years

United States Senate

For the first time since April 29, 2009, the United States Senate has passed a budget. Early this morning, the Senate finished voting on dozens of amendments and gave final passage to its version of the budget — which never balances and raises taxes by $1 trillion — by a vote of 50 to 49.

It was mostly a party-line vote, 48 Democrats and two Independents, both of whom caucus with the party in power, voted for passage. Four Democrats — Sens. Max Baucus (D-MT), Mark Begich (D-AK), Kay Hagan (D-NC), and Mark Pryor (D-AR) — joined all 45 Republicans in opposition. It just so happens that every Democrat who voted against the budget is up for re-election next year.

Sens. Tim Johnson (D-SD), Mary Landrieu (D-LA), Jeanne Shaheen (D-NH), Mark Udall (D-CO), and Mark Warner (D-ND) are also up for re-election next year. Their votes in favor of the budget will no doubt be brought up by their opponents.

Negotiators from the House, which passed its budget proposal on Thursday, and Senate will soon meet in a conference committee to try to reconcile their vast differences. Because they’re so far apart — with the House wanting a balanced budget in 10 years, tax reform, and entitlement reform and the Senate pushing $1 trillion in tax hikes and an perpetually unbalanced budget — agreement on a budget for FY 2014 looks unlikely.

Immorality of the Death Tax

We noted here during while Congress debating extending current tax rates that many Democrats had issues with a reduction in the planned increase of Death Tax in 2011. Instead of 35%, they wanted it at 45% - often resorting to class warfare to demagogue the issue. In the end, an amendment to increase the Death Tax in the deal worked out between President Barack Obama and Republicans failed, however, the class warfare rhetoric remains.

Russ Roberts, an economist and blogger at Cafe Hayek, explained his problems with the Death Tax from a different perspective in The New York Times:

A 2005 study of the estate tax by the Congressional Budget Office had this honest line: “Economic studies have had limited success in identifying how the estate tax may influence the behavior of farmers and small-business owners.”
More importantly, perhaps, as in many areas of economics, one’s assessment of the empirical work conveniently lines up with one’s philosophical attitudes toward government. So I won’t pretend my dislike for the estate tax is because it hurts capital formation, say, which it certainly might. But that’s not the main reason the estate tax bothers me.

BREAKING: Tax cut deal passes House, heads to Obama’s desk

Late last night, the House of Representatives passed extension of currents tax rates and unemployment benefits by a vote of 277 to 148, despite a failed effort by Democrats to increase the Death Tax from 35% to 45%:

A tax-cut compromise between President Barack Obama and congressional Republicans – a harbinger of a new era of divided government in Washington – cleared the House around midnight Thursday, sending the $858 billion bill to the president’s desk.

The bill, which passed 277 to 148, provides a two-year extension for all tax cuts that were due to expire Dec. 31 – including for families earning more than $250,000 a year — and extends unemployment insurance benefits through next year. It also sets estate tax rates at 35 percent, with an exemption on the first $5 million.

In the end, the House vote wasn’t close, with 139 Democrats joining 138 Republicans to approve the bill. The Senate passed the bill comfortably as well Wednesday, 81 to 19.

The bill represented a major shift for Obama, as he abandoned an oft-repeated campaign promise that he would end the policy of cutting taxes for the wealthy. But the House Republican landslide in the midterm elections – a “shellacking,” Obama called it – forced the president to cut a deal so middle-class families didn’t see a tax hike on his watch, even though it infuriated his liberal base.

The rhetoric on the floor of the House was testy at times, but in the end 139 Democrats voted for extension of the tax cuts, which is one more than the number of Republicans voting for the bill.

BREAKING: Senate passes tax deal

By a vote of 81 to 19, the United States Senate has passed the tax deal between President Barack Obama and Republicans, which will extend the 2001 and 2003 tax cuts, unemployment benefits and tax credits and enact a one-year payroll tax holiday.

The package will now move on to the House where it will likely be taken up tomorrow. It’s unclear whether or not House Democrats will be able to make the desired changes to the Death Tax; they deem a 35% take rate to be “too generous.”

The 19 “no” votes are:

  • Jeff Bingaman (D-NM)
  • Tom Coburn (R-OK)
  • Jim DeMint (R-SC)
  • Byron Dorgan (D-ND)
  • John Ensign (R-NV)
  • Russ Feingold (D-WI)
  • Kirsten Gillibrand (D-NY)
  • Kay Hagan (D-NC)
  • Tom Harkin (D-IA)
  • Frank Lautenberg (D-NJ)
  • Patrick Leahy (D-VT)
  • Carl Levin (D-MI)
  • Jeff Merkley (D-OR)
  • Bernie Sanders (I-VT)
  • Jeff Sessions (R-AL)
  • Mark Udall (D-CO)
  • Tom Udall (D-NM)
  • George Voinovich (R-OH)
  • Ron Wyden (D-OR)

More Republicans express concern over tax deal

As action nears in the House on the tax compromise between President Barack Obama and Republicans, another Republican is expressing dissatifaction with the arrangement:

Count a future GOP committee chair as one of those icy on President Barack Obama’s tax compromise with Republicans.

California Rep. Darrell Issa, the future chair of the House Oversight and Government Reform committee, said the tax bill that passed a key procedural hurdle Monday is “an incomplete effort that fails to create a permanent tax structure giving businesses the kind of long-term predictability needed to support investment, economic growth and job creation.”

Issa isn’t yet saying he’ll vote against it and even concedes that it avoids “massive and immediate tax increases that would harm our economy and kill more jobs.”

“While my vote will ultimately depend on the final bill brought to the floor of the House, the flawed last minute consideration of this proposal underscores the need for Congress to act decisively in the new year to support job creation, curb government spending and enact permanent tax reform,” Issa said in a statement to POLITICO.

The views and opinions expressed by individual authors are not necessarily those of other authors, advertisers, developers or editors at United Liberty.