Daily Archives: 31 October 2012

Death Tax Failure

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The death tax, aka “estate tax” was, briefly, 0 for 2010, then rose to 35% of an estate’s value above $5 million for 2011 and 2012.  Next year—in addition to the fiscal cliff of the Obama tax increases and the Obama sequestration that occur on 1 Jan—the death tax is set to rise again, to a usurious 55% of anything above $1 million.

Never mind that this theft of a parent’s hard-won legacy, intended to be for the benefit of the his sons and daughters, simply leads to market distortions by those rich enough to be able to follow the Warren Buffet example of transferring wealth to, for instance, charitable organizations (good for them, though), and so avoiding—legally and appropriately—sending revenue unnecessarily to the Federal government.

Consider the choices lesser lights—Joe the Plumber with his business, for instance—are forced to make instead.

When [Mr Wurzelbacher] begins to consider retirement with perhaps $10 million of lifetime wealth, he can reinvest the profits in the business (which means growth and more workers) or live lavishly in retirement and spend the money down to zero.

In the first case, he is smacked with federal…death taxes that can take away half of the wealth.  In the second instance, he pays no tax.  A new study by the Joint Economic Committee Republican staff estimates that because of this disincentive to save and invest “the estate tax has cumulatively reduced the amount of capital stock in the US economy by roughly $1.1 trillion.”

Democratic Presidential Candidate Barack Obama insists that this is entirely fair—that death tax is needed for his redistribution programs.  Despite those choices and loopholes.

As the WSJ notes, though (the above link), there is a moral question here, too:

The levy makes Uncle Sam up to a half-partner in the proceeds of successful businesses.  That is on top of the property and income taxes and other assessments that owners pay year after year.  … What is truly unfair is when a family-owned enterprise has to be sold at auction to pay the death tax to the IRS.

Obama has yet to address this moral question in any serious fashion.  Keep that in mind as you go to the polls.

A Do-Nothing Senate

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Recall the mandate to move to the right of center that our Congress received in the 2010 elections, when the people transferred 63 seats in the House of Representative and 6 in the Senate from the Democrats to the Republicans—a majority of those transfers to Tea Party Republicans, hence the mandate to move to the right.  Despite that outcome, though, the Senate remained under the control of the Democrats.  What has the Senate done in response to those instructions from its bosses?  The figure below, from The Wall Street Journal, tells the tale of the Progressives’ insubordination.

This illustrates the work the House has done these last two years in response to those instructions and the (not insignificant) numbers of House Democrats who actively supported that work.

On top of this dereliction, the Senate has refused to do its own work:

[T]he Senate failed to pass any budget in 2012. Or 2011. Or 2010. …more than 1,200 days.

And

The Senate also failed in 2010 and 2012 to pass a single appropriations bill.  …that hadn’t happened before in the 150-year history of the current spending process.  This year the Senate even failed to enact a national defense authorization bill, which almost never happens.

Senate Progressives have announced that they’ll continue their refusal to perform in 2013 [emphasis in original]:

Chuck Schumer (D, NY) warned that Democrats will stop any attempt at bipartisan tax reform next year, calling the idea “obsolete.”

We can’t afford even two more years of this Progressive refusal to perform, much less four more years of an incumbent President’s arrogance.