Apparently, about half - for now...
Yesterday, the
House of Representatives voted in favor of keeping a 45% death tax on estates valued over $3.5 million. The $3.5 million is NOT indexed to inflation. The tax was scheduled to be repealed next month.
Our rep, Marcy Kaptur, joined 25 other Democrats and all Republicans (including Bob Latta) in
voting against the measure.
Now, you may think that anyone with an estate worth $3.5 million can certainly 'afford' to pay more taxes, but that's not the point. Nor is the fact that 'it only' impacts a small number of estates.
House Speaker Nancy Pelosi said, the bill is
"founded on the ideas of equality and opportunity." Really?
How is it 'equal' to tax some people at 45% and others at nothing? How does taking half of a person's inheritance match the idea of 'opportunity'?
Rep. Jared Polis, D-Colorado, was even more onerous.
He said:
"This bill gives our nation's wealthiest families the ability to know exactly what their obligation to the nation that fostered their wealth will be, and it is fair and it is just."
So the nation's wealthiest families have an 'obligation' to give half of what they've earned and worked so hard for to the government? How in the world can anyone think that is even remotely 'fair' or 'just'?
Remember, these inheritances are often assets which have already been taxed when they were acquired or accessed/sold. Many of the assets of a family are not easily disposed of, meaning that property or small family businesses (one example was the owner of as few as four convenience stores) would have to be liquidated in order to meet the tax obligation.
Of course, this is just the federal government. In
Ohio, the estate tax is $23,600 plus 7% of the excess over $500,000. So for a $3.5 million estate, you'd have to pay $233,600.
***Side note: The City of Toledo has a budget revenue line item for estate taxes, but the Taxation Department wasn't aware of a specific form for paying inheritance tax. I was transferred to a person in the Finance Department who said she'd investigate this for me and respond. If there is a Toledo tax, I'll include it when I get the information.
*** Combined, you'd have to come up with at least $1,808,600 in cash to pay your state and federal obligations. Again, if the inheritance is in property or machinery or inventory, you'd have to liquidate to meet the obligation.
How 'fair' and 'just' is that? And does this really represent the foundations upon which this country was based - foundations of 'equality' and 'opportunity'??? I don't think so.
As
Randall Holcombe wrote, "Once you have earned something, it should be yours, and it is unfair for the government to confiscate it when you die."
Democrats who passed the bill are spinning this 'taking' as a positive. Prior to the President Bush tax cuts in 2001, the rate was 55% on anything above $1 million. In December, the tax was to be repealed for at least one year. Without a further vote making the death tax permanent, the tax would have reverted to the 55% rate in 2011. Republicans were hoping to make the repeal permanent, but Democrats have instead voted in the 45% and are touting it as a 'cut' from the 55% that will "cost" the federal government $235 billion over the next decade.
The real problem is the expectation of our politicians that they have any claim whatsoever to your inheritance - or that you 'owe' everyone else in the United States because your relatives worked hard and established a business or made money.
While they say it isn't a 'sin' or a 'crime' to be rich - they sure do want to penalize you for achieving their concept of that status.
Hopefully, the Senate will be too preoccupied with health care to address this before the end of the year. Maybe it will give Republicans and the American public time to pressure all of them into repealing this destructive death tax entirely.
