Estate Taxes Aren’t Just For The Wealthy
“The House voted Wednesday to eliminate federal estate taxes in 2010 and beyond, a repeal that Republicans hailed but many Democrats said would reward the richest families at the steep cost of deeper federal deficits,” reports the AP.
Will that line ever tire? Never get old? Democrats always say that about everything Republicans do as benefitting “the rich.” But consider the facts on estate taxes: Almost all of people’s incomes and savings have already been taxed by the government, via the form of various payroll deductions, state & federal income taxes, capital gains taxes for investments, not to mention everday sales taxes eating away our money. If you have a dollar, the government wants a piece of it.
As tomorrow is the dreaded “tax day” in America, most of us should be painfully acquinted with how much of our money the government gets.
Just because, over a lifetime, you happen to earn more and save more (and invest in the U.S. by owning property or being a stockholder), why should you be triple-taxed after your death?
Most parents want to provide a better life for the next generation, and so they accumulate wealth to pass on. They do this by working and investing. Some harder than others, but that will always be the case. Still, it remains inherently unfair for the government to take outrageous amounts (sometimes more than 50%, thanks to the Democrats), just because the heirs are receiving a lump sum of assets. It’s unfair to the deceased. Thus, Republicans correctly refer to it as the “death tax.”
By arguing that eliminating estate taxes only benefits the rich, Democrats desperately hope to stoke the flames of class warfare. They play upon the pure envy of those who have less - either because they earned less, or saved less. Not everyone is equal.
However, living in California provides a perfect example that wealth can be created by many without being rich. Take my next door neighbor. A widower in his late 60s, he owns real estate, including two houses (one in which he lives) and a small apartment building. He bought these properties over 30 years ago. He has two sons, both blue-collar laborers.
While never being wealthy, and his current lifestyle certainly doesn’t reflect it, this man worked hard all his life as a plumber and decided to make some investments. And remember: invesments usually aren’t without risks. If he were living in Idaho, by contrast, he’d see a modest appreciation as property values grew over time. But he lives in a state where real estate has gone through the roof, driven by demand. As a result, his properties are now worth millions.
Why should this man be penalized for making an investment that turned out to be very successful? That is his reward for taking the risk. Why should, upon his passing, his children not receive the fruits of his labor? As it stands, the estate tax would force his sons to sell the properties to pay the taxes. And this year the top rate stands at 47%.
House Democratic Leader Nancy Pelosi, D-Calif., said the bill favored the “super rich” and would make federal deficits worse.“Do we want to continue reckless Republican tax policies or to return to a fair system of taxation?” Pelosi said.
Liberal Democrats will continue to argue this because they know that many people are jealous of others with good fortune, and they’ll exploit it for political gain.
There are so many more examples to the story above, but the reality remains the same: Estate taxes aren’t designed to only make the wealthy pay more. (Which, even if it were so, would be communist) In truth, they affect every ordinary citizen who, by some effort and luck, is able to accumulate significant wealth by the time he/she dies. Isn’t that the “American Dream?” Republicans understand this.
UPDATE: Estate Tax Repeal Heads to Senate Battle
UPDATE: Michelle Malkin has the latest.
April 15th, 2005 at 9:49 am
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