I spent a few hours yesterday, sitting on a patio in pleasant weather, enjoying the company of my two older brothers. Mike is a retired lieutenant police detective with a masters degree in Public Administration. Bob, the elder, is semi-retired from his own CPA firm and holds a masters degree in Economics. Both are staunch liberal Democrats. They are also world class raconteurs whose combined intellectual firepower guarantees some lively and entertaining conversation. I am damn lucky to have them.
Bob the Elder had just returned from the post office where he mailed out letters to our Congressman Steve Cohen (D) and Republican Senators Bob Corker and Lamar Alexander. I insisted he email me a copy as I wanted to see what he had to say to them in response to the newly released tax reform plan. I thought perhaps some of you might find it interesting as an example of a knowledgeable citizen speaking simple truth to power, so I am posting it here.
To the Honorable ___,
Dear sir,
Anyone with an IQ above that of dishwater knows the repeal of the Unified Transfer Tax (aka the “Death Tax”) does nothing to benefit the middle class, the upper middle class, or the upper class of American citizenry. There is no tax on the first $5,490,000 ($5,600,000 in 2018) of a decedent’s taxable estate, calculated after bequests to a surviving spouse and to charity. Surviving spouses have a similar exemption upon their death. Children of rich parents already attend the best schools where they may become well-connected socially and professionally. Many were handed a well-paying job, a home in a prestigious neighborhood, and/or a trust fund. How badly do they need one more hand-out?
In 1916 Congress levied a tax on the transfer of a decedent’s net estate. The Committee on Ways and Means explained that the revenue system should be more evenly and equitably balanced with a larger portion of our necessary revenues collected from the incomes and inheritances of those deriving the most benefit and protection from the Government. Our current generation of conservatives has prioritized selfishness above those goals.
Unlike the income tax which takes something you worked hard for, or a sales tax which increases the cost of something you need or want, the tax on a decedent’s net estate comes from people who won’t miss it. Unless you want to maintain social classes and let some people live a life of luxury without doing any work, this tax would seem like a good way to raise necessary government funds.
Those who truly believe that inherited un-needed wealth creates jobs should go to Netflix and watch James Ivory’s The Remains of the Day to understand the nature of those jobs.
Those who truly believe that the “Death Tax” forces the sale of family owned farms and businesses should know the Center on Budget and Policy Priorities (CBPP.org) estimates that of 2.7 million estates annually, only 5,200 (2/10 of 1%) will owe ANY federal tax, and of those, less than 50 will have family farms or businesses valued at over $5,490,000. Talk about killing flies with a shotgun.
It does not take much imagination for one with a law degree to recognize that in the era of multi-billion dollar gross estates, the repeal of the Unified Transfer Tax is equivalent to the repeal of the Rule Against Perpetuities!
Sir, this is NOT tax reform.