Wednesday, April 20, 2005

Let's Put More Faces on the Estate Tax

In Putting a Face on the Estate Taxpayer, the pseudonymous Douglas MacLean writes about the impact — or lack thereof — of the estate tax on his family's relatively privileged economic standing.

His example leads me to challenge those urging its permanent repeal: Let's renounce arguing the estate tax based on theoretical and exceptional circumstances. Don't try to sway me with the supposed impact on mythical Iowa farm families, and I won't throw Paris Hilton back at you.

Instead, let's talk specifically about actual multi-million-dollar estates and the underlying values that guide decisions about passing wealth along — to family members or to community or governmental institutions. This bulletin just in: You still can't take it with you.

Let's accumulate as many personal stories like MacLean's as we can, from any side of the issue. In a future post, I'll contribute one. Our discomfort about discussing personal finances or embarrassment over personal wealth gives cover to those who will truly benefit from a repeal of the estate tax. Right now, the very, very rich are able to hide behind paid lobbyists and apologists who cite principles designed to resonate with, but not benefit, the middle class.

Let's talk about who really benefits from repeal, and let's detail the actual benefits. Let's put more faces on the estate tax.

Stay tuned.


Anonymous Dan Smith said...

Amazing how an issue gets your attention when all of a sudden it pops up in your life. I didn't give a rip about the estate tax--until my father died in march and there I was with my siblings sitting across the table from his trust officer as he explained, dead panned, that because of the Reagan and then Bush tax cuts, the increase in the size of the exemption from estate tax liability had increased to keep his estate of 1.5 million under the limit. I wondered if the rest of my family--about as fervently Bush-hating a bunch as I know--would be sending Dubya some kind of thank you note. My dad retired at age 50 from the US Navy after 30 years of gypsy like existence for his kids and occasional months long separations while he stood his post in a nuke under the polar ice cap. His retirement pay was generous, rather like the 401(k) I hope to have for funding my retirement. He and my mother lived frugally and invested wisely. I daresay his net worth increased over the years of his retirement. If he had died penniless I wouldn't have minded. But the fact is that he paid taxes once on the money he received as a benefit and whatever capital gains his investments earned. My visceral reaction to taxes levied twice is a vigorous NO!. On the other hand, if I should be so unlucky as to slide in front of a bus during a winter run and never make it to my long awaitied retirement party, I should think it quite fair for the government to tax my sheltered 401(k) accouunt before it goes to my heirs. That's my basic rule of fairness in taxation: one chance to tax, after which it goes into the pockets of those for whom it was intended.

5:17 AM  

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