Fans lost a lot of money betting on Manny Pacquiao. Millions
betting on any horse other than Pharoah to win the Kentucky Derby lost lots of
money. But no politician ever lost a dime betting on the eagerness of American
voters to be manipulated.
The latest example is the U.S. House of Representatives vote
to repeal the “death tax,” once called the “estate tax.” Most won’t recognize
the term “estate tax.” When Newt Gingrich took out his “Contract on America” in
the 90s, pollsters advised him that the average “Joe” understood “estate” taxes
applied only to the very rich. They didn’t mind the tax being applied to those
who had accumulated exorbitant wealth.
Without changing their objective of helping the rich get
richer, they changed the terminology. The estate tax became the “death tax.”
Poll responders reversed themselves. The manipulated became convinced by the
change that the tax applied to them. After all not everyone leaves a taxable
estate but everyone dies.
You’ve heard of the accumulation of wealth among the 1%?
According to Wall Street Journal columnist Jonathan Clements, the so-called
“death tax” effects less than two-tenths of the one percent, meaning 99.8% of
taxpayers cannot be taxed under existing law. Those in the middle class who are
cheering the repeal need to know what a belly-laugh the .002% is getting in
their mansions.
The most appropriate term for this tax is “the billionaire’s
tax.” It would reasonable to guess that not one of this newspaper’s readers
would be taxed under the law your congressmen voted to repeal. The Tax Policy Center documented only 20 small businesses and farms nationwide owing estate
taxes in 2013. Those 20 estates owed just 4.9%.
Since then, the
exemption has been increased. No estate with less than 5.4 million
dollars is taxed. If you have smart tax advisers, as the grossly wealthy tend
to have, that number is closer to 11 million.
That eleven-million dollar threshold comes only after
wealthy taxpayers take deductions, including gifts to children and charity and
purchasing life insurance, which passes the benefits along with no estate tax.
After exemptions and loopholes, when the top two-tenths of
one percent eventually have to pay an inheritance tax, their heirs still keep
the eleven million plus 65% of the remainder. Not a bad haul for the children
of the super rich.
Where does the estate tax idea come from? Not from liberals
but from the Founding Fathers and other conservative Americans. Teddy Roosevelt
supported a tax on inheritances saying, “No man should receive a dollar unless that dollar has
been fairly earned.” In “The Wealth of Nations,” Adam Smith wrote, “When…great estates derive
their security from the laws of their country, nothing can be more completely
absurd. They are founded upon the most absurd of all suppositions, the
supposition that every successive generation of men have not an equal right to
the earth.” Seems like orthodox conservative philosophy.
Wyoming has a unique place in the history of the
billionaire’s tax. When Mike Sullivan was Governor in the 90s, our state was in
fiscal trouble. Going through a “bust” cycle, Wyoming was experiencing
draconian budget cuts and appeared unable to balance its budget. Then a wealthy
Jackson resident suddenly passed away leaving such a large estate that Wyoming
was entitled to share the estate tax payment with the IRS. Governor Sullivan later said, “We
balanced the budget because a lady who died in Jackson left a $20 million
estate tax, and that saved us for that budget period.”
Since then,
Republicans in the state house and congress made sure that won’t happen again.
They repealed the laws making that possible.
The clamor to rid America of the billionaire’s tax started
more recently as the greedy decided they just couldn’t get enough. This is
about helping the Koch Brothers and their buddies. Their children will reap the
reward. Yours will get to make up the 269 billion dollar loss to the treasury
that the repeal will cost.
Still cheering?
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