Lies & the Lying Liars Who Tell Them_ A Fair & Balanced Look at the Right - Al Franken [122]
60 SECOND SPOT: DEATH TAX
SOUND EFFECTS: SOUND OF FARM IMPLEMENTS. CHICKENS CLUCKING, COWS MOOING.
RUTH
Lloyd? We just got a letter from the IRS!
LLOYD
Ruth, what’s wrong?
RUTH
They say we owe more taxes!
LLOYD
Bull! Dad always paid his taxes, even in the worst of times.
RUTH
We owe taxes ’cause he died?
LLOYD
He paid taxes when he worked! He paid taxes on this land, now he dies, and he has to pay—more? Who the hell thought up that doozy?
RUTH
Senator Wellstone just voted to keep the death tax.
LLOYD
Paul Wellstone actually voted to tax people ’cause they died?
RUTH
What’s going to happen?
LLOYD
We’re going to have to sell the farm.
RUTH
No, Lloyd, we’re going to call Paul Wellstone and tell him our folks paid their fair share. And to keep his money-grubbing hands off our farm.
ANNOUNCER (V.O.)
Call Paul Wellstone. Tell him to protect small business and family farms, and to stop taxing the dead. Paid for by Americans for Job Security.
Wellstone had voted against the full repeal of the estate tax. But he had also voted to exempt family farms and small businesses, and to exempt all other estates up to $8 million. You know, if anyone hated the small farmer, or, in fact, the little guy in general, it was Paul “Moneygrubber” Wellstone. That’s why they had to plant the crowd for his memorial.
Bush used the death tax issue in practically every stump speech he gave, lamenting the devastation it visited on family farmers and small business owners. The Republicans pushed the estate tax repeal as a middle-class tax-relief issue. With some success. Seventeen percent of Americans thought the estate tax would apply to them. In fact, the tax affects less than 2 percent of estates—and nearly half of the revenue it produces comes from taxes on 0.16 percent of estates, worth an average of $17 million, belonging to about 3,300 families each year. In 1999, fully a quarter of the estate tax revenue came from just 467 estates. As David Brooks, who works at the Weekly Standard but is nonetheless a terrific guy, wrote in The New York Times, the estate tax is “explicitly for the mega-upper class.”
Bush has said that it is immoral to tax people when they die. Since we are currently experiencing a $450 billion deficit, the amount of the revenue being lost by the phase-out and eventual repeal of the estate tax will have to be made up by taxes on you and me. It is arguably more moral to tax an incredibly rich person who is dead than a middle- or working-class person who is still alive. The living person might use the money for medical care, food, travel, or other things that dead rich people don’t have to think about.
The other bogus argument put forth by opponents of the estate tax is that it amounts to “double taxation.” The idea is that you pay taxes as you accumulate your fortune, and then your children have to pay taxes on it again when you die. There are two problems with this argument. First, everyone pays double taxes all the time. Sales taxes, for example, are taxes on already-taxed income. Fees on things like your driver’s license, a fishing license, a hunting license, and other licenses—that’s all double taxation. Also fees on things that aren’t licenses. Like permits. Let’s say you want to open a business selling licenses. You need a license permit! That’s triple taxation. I think.
Import taxes, excise taxes, bridge tolls, car registration, taxes on alcohol, gasoline, and tobacco are all double taxes. So are property taxes, which tax assets bought with already taxed income.
However, the repeal of the estate tax will create a way to avoid not just double taxation, but also single taxation. Here’s how to do it. Buy an enormous amount of stock or property. Let it accumulate value. Die. Now the money goes to your kids, who escape both estate and capital gains taxes. Thanks to Bush, by 2010, only one thing will be certain in life. And that thing is either death, or taxes.
This new tax loophole