Monday, April 18, 2005

Debate the estate tax

With this sort of advocacy for keeping the estate tax, I'm not surprised that the proponents for repeal are doing so well.
Posted by Jim Gust at 7:26 AM

3 comments:

Anonymous said...

The arguments for repeal of the estate tax are largely specious. Noone can document the loss of a family farm due to the estate tax. And the hardship on family businesses is greatly exaggerated. Those who will benefit are are mainly the superwealthy. Their descendents still did rather well even after the Clinton-era tax bite.

8:36 PM
Anonymous said...

The farms are lost long before the owner dies, because they are sold off when the farmers' kids find out the estate tax price they would have to pay to keep the old home place. Farming is already hard, chancy work without having to pay the government hundreds of thousands of dollars for the privilege of keeping a farm in the family.

If you doubt that farm families are affected by the estate tax, go to a database of private letter rulings from IRS and search for "special use valuation," a provision intended to help farm families. You can tell by the dozens of hits that you get that a great many families are affected, and are doing their best to cope. Trouble is, it's very hard to live on a farm income, let alone service an estate tax debt to boot.

More evidence of the estate tax effect: Family farms are being sold off to huge agribusinesses every day, the total number of farms in America is in steep decline. If you like factory farming, if you believe that corporate farms do a better job of producing food, by all means keep the estate tax.

Here's the biggest irony--the super wealthy, the Gateses and the Buffetts, are the ones who are demanding that the estate tax be kept! They've got theirs, so apparently they want to stop the game of musical chairs before anyone else catches up.

My view--up the exemption to $5 million and index it to inflation, then drop the tax rate to the same as on long term capital gains, 15% right now.

10:46 PM
Jim Gust said...

According to Tax Notes, "The Joint Economic Committee issued its Economic Committee Study in June 2003 and reported that the estate tax is the leading cause of dissolution for thousands of family-run businesses."

The JEC is usually considered a reliable, non-partisan info source.

11:30 AM

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