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Estate Taxes & Political Calculations

The President’s deal with the GOP scales back the estate tax. House Dems are saying “too far, too much.” The GOP says “must have.”

Senate Finance Committee Chairman Sen. Max Baucus, D-Mont., Dec. 13, 2010, before going to vote on the tax cut legislation. (AP)

The tax debate rages on in Washington, even as President Obama’s tax deal with Republicans rolls on. 

The Senate is lining up to pass the deal today. Republican leadership is saying, “Pass it, or else.” House Democrats are drawing their new line in the sand at the estate tax. 

The GOP-White House deal would be a sweet deal for America’s richest families: mountains of wealth to pass on, with a light tax touch. Too light, say Democrats, at a time of huge American inequality and huge federal deficits. 

We hear the debate on fairness, the future, great fortunes, and the estate tax.

-Tom Ashbrook


Bob Cusack, managing editor of The Hill.

Ray Madoff, professor at Boston College Law School, expert on the estate tax. She’s author of “Immortality and the Law: The Rising Power of the American Dead.”

Douglas Holtz-Eakin, president of the American Action Forum, a think tank. He’s former director of the Congressional Budget Office, from 2003-2005, and served as chief economist to John McCain’s 2008 presidential campaign.

Michael Burgess, Republican congressman for Texas’ 26th district.

Jim McDermott, Democratic congressman for Washington State’s 7th district.

Read Teddy Roosevelt’s statement a century ago about inherited wealth and estate taxes.

(AP Photo)

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  • John C

    How will this a) Stimulate the economy/create more jobs, and or b) Reduce the national dept. Both issues are forefront in the political narrative but I see neither being addressed by proposed legislation.


  • Michael…

    Not even a month later after the week long blitz on why we have to put grandma on catfood, raise retirement,cut SS, cut Medi-Care and many other socail program and on and on about how all use americans have to take and feel the pain, except of course it’s looking this year to be one of the biggest pay-outs for bonus, the wealthy will be paying less in the estate tax, 10 mill two people before any taxes kick in, and Guess what the new season of congress is talking about lowering yets yet again(as if 900 billion unpaid and added to the debt wasn’t bad enough). But don’t worry folks there going to fix those loop holes while lowering taxes even lower for the rich. You know loop holes concerning the middle-class of course, can’t fix the loop holes for the rich or small business cause it may slow the economy. Even obama is falling for this and we all know starting January the republicans will rail against obama adding 900 billion on to the debt and how there financial conservative(except for unpaid tax cuts than its all about the short-run and Fk the debt)

    Douglas Holtz-Eakin, is another junk bond salesman
    have fun folks taking it more in the behind than you’re taking it now, since many voted for it.

  • Flowen

    Republicans, Conservatives and their Tea Party fools: debt/deficit hawks?…what have you been smoking with your Kool-Aid?

    They’re lying, thieving pirates with less morals than their Somali counterparts!

    The last time we had estate taxes so low, so generous to the heirs of the dead, was 1931; three years before the low of the Great Depression!

    While there is a 3 year waiting list for $800,000 watches, the worst is yet to come!

  • a democrat …

    My stomach has been tied in knots since I heard about
    the Obama deal with the Republicans. He should never have agreed to this hold -up by Republican leaders
    such as Mitch Mc Connel and the American oligarchy
    he represents on Wall Street.

    Obama should have shown more insight and have forseen this stickup–instead he should have taken the money to
    cover the unempyment benfits and the middle class tax cuts from the bloated military and skipped the payroll tax altogether.

    That’s peoples’ money for their retirement and it should never be touched. The democrats can stop

  • a democrat


    Make no mistake about it this is the Republican leader-ship ripping off hard working American families to prop up the American oligarchy on Wall Street who spent the last 8 yrs driving them further and further into their endless wars while they sank further and further into despair and debt…

    (People need another revolution to take out the robber barons on Wall St and rein in the Republican crooks in Congress today…. The whole system is so currpt now.
    There is no justice for the workers and middle class
    families… )

  • William

    The Death Tax is counter productive and does not encourage any economic growth.

  • Mark

    The rich basically said, you take away more of our money, we bury the poor even further! The golden rule folks! He who has the gold, rules! It’s unfortunately always been that way since the dawn of mankind! That’s why our world is so screwed up!

  • Beverly

    Even Mr. Chicken Crap is feeling guilty about what he’s doing.

    That’s the cause of his apparent nervous breakdown. He knows that he has helped to turn the American Dream into a nightmare for our children, & everyone else who can’t afford several homes, a visit to the doctor, or food. 

    It seems that the extreme inner conflict is making it impossible for him to live with himself. Is it time to put him on suicide watch, I wonder?

  • Zeno

    @Beverly I agree. I think he is showing all the signs of mental breakdown, and he is just two heart attacks away from being president. Yikes!

  • bob

    Rich families passing on extreme wealth and power to a younger child who has no clue about what is happening to our middle class families, is incompetent, and is spoiled can be a disaster.

    Example: W. Bush.

  • http://onpointradio.org George (Newton, MA)

    I agree with the argument that the real estate tax is not fair as the people who accumulated that wealth have already paid taxes on it.
    However, the recipients of that wealth, most of the time have had very little to do with the accumulation and they are the equivalent of lottery winners (without even buying a ticket). The recipients of that windfall should pay income tax as anybody does with their hard earned money or lottery earnings.

  • Janet in Brentwood TN

    The estate tax is fundamental to modern American capitalism. It supports, rather than inhibits, competitiveness and entrepreneurism. That is its purpose.

    The entire benefit of repeal of the inheritance tax is to the top 0.3%. We should not be spending $1Trillion on it.

  • Pancake’s house in McAdenville, NC, taxes paid

    It doesn’t matter which person inherits money or wins a big lottery payout (more uncommon than you might assume). The problem is structural. If most of the wealth and income goes to fewer and fewer people this will stifle healthy commerce and leave the majority in misery. The predatory escalation as the wealthy elite endeavor to maintain and increase their revenue stream is obliterating social cohesion. That is why representative democracy (or the semblance of it) went down the toilet. Most people now live in the majority ghetto and think of the jackpot or the big score (fraud, drug or gun deal, government contract)as the only way out of insecurity. No wonder parents push children to gamble for the big career score and blame them when they don’t make it over high hurdles. I could have kicked Bill Clinton in the nuts when he said this is the best deal. It may be the best deal for traitors like him. Obama is slinking away and Boehner is crying because he is the only schoolboy in his town who made it big (in plastics- The Graduate). They have no souls: That’s why they’re called Mo-Fos. (They’d do it if the Oligarchy demanded. Like I believe Sarah Palin wrote a big personal check for Haiti.)

    PS-We have powerful leaders no more mature than the young entrepreneurs on the next page.

  • cory

    What good is aquiring vast wealth if you cannot keep it from others across the span of generations? If you can’t take it with you, the next best thing is to give it to your kids, right?

    Leftfield, Wisconsin

  • cory

    BTW, when the republicans take over the house they are going to propose a bill to allow the wealthy to “take it with them”.

    Leftfield, Wisconsin

  • Julie Rohwein
  • John

    Because a small number of families (Waltons & Gallo) were lousy at estate planning they decide to hire PR people instead of better lawyers and accountants.

    The wealthy have always chafed at the estate tax but this group of snotty rich kids found a willing audience for their “death tax” spin in the Reaganites and new Libertarians of the 80′s and 90′s. It fit right in with the “trickle down” crowd’s world view.

    Thus they have reinstated the 1880′s, with the addition of the payroll income tax for those beneath them. Thus, because they run things, they continue to wrack up huge bills that they then have managed to get “the little people” to pay the bill for.

    John T
    Williamstown, VT

  • Nick


    Who’s Mr. Chicken-crap?

    I think I am too tired from my two jobs – and still can’t pay the bills – to think clearly this morning.


  • John Nagel

    Let me tell you the story of the sale Fisher Price Toys. (Dollar amounts disguised in the name of Confidentiality.) Fisher Price employed hundreds in MANUFACTURING jobs in Western NY in the 50s & 60s at three facilities. As Mr. Fisher & Mr. Price (sole owners) aged they began inevitable estate tax planning. They realized that their business, now worth on paper $500 Million, would result in nearly $250 Million in estate tax liability. Thus they needed $250Million in CASH. They had been good corporate stewards and plowed most all of their profits back in the business creating jobs in the process. Their ONLY option to raise the cash was to sell out to a larger company. (I know this because my father was CFO.) How often does this play out in America? Those who lament big business “gobbling up” small businesses and sending jobs overseas should look to the estate tax as one of the main culprits. Today their are NO Fisher Price manufacturing jobs anywhere in the USA. John in East Aurora, NY

  • Lon in Appleton, WI

    I’m glad Ray Madoff and her study of death and taxes is getting more exposure.

    She speaks in interview a full hour from Wisconsin Public Radio (link below.) If you weren’t outraged before, you will be after knowing about these rights of the dead.

    The old phrase from the pyramids, “We your Grateful Dead…” has new meaning in America today.


    See entry for Wednesday June 2, 2010 down the page.

  • JP

    The estate tax isn’t only about money… it’s also about crooked government and the family dynasties that make it so.

    Heirs to family dynasties don’t just inherit wealth, they also inherit the political influence their family’s money has bought… breaking up the political influence of family dynasties was the main idea behind the estate tax in the first place.

    It’s right! Reinstitute the estate tax!

  • Larry

    The rich really should be renamed the criminal rich.

    They steal and steal and steal their way to untold wealth.

    No, not every single one. But I’m willing to bet the majority.

    And those that don’t steal, buy the government to write the laws for them to make their stealing legal.

    Yes, America. Corruption is our system.

  • Ken

    Republicans are infatuated with eliminating the estate tax, or “death tax” in GOPspeak, designed to make it sound like dead little old ladies pay it, rather than suddenly wealthy heirs. If the person who built up the estate’s assets over many decades has to pay capital gains taxes if he/she sells the assets one day before dying, why is it OK for the heirs, who did nothing to earn their huge windfall, not to have to pay taxes on those assets?

    Even Warren Buffett and Bill Gates, the two people in the world who have the most to gain by ending the estate tax, are for it. This is one tax that no one could argue “harms the economy”, since inheriting a gigantic estate doesn’t stimulate the economy much more than inheriting a merely huge estate. Moreover, most of the assets in large estates are appreciated holdings that have never been taxed. So, the estate tax corrects that oversight. Large estates also generally derive from all the opportunity the U.S. offers, so it is only fair that some of the estate come back to that country, to make sure opportunities remain for others. Somehow, I don’t think conservatives care much for helping those “others” if it is going to cost them anything.

    When it comes to “sacrifice” to lessen the deficit, which conservatives frequently call for, conservatives seem to channel Leona Helmsley: The rich don’t sacrifice; only the little people sacrifice.

  • http://rekording.blogspot.com Bob E Kelly

    Rindge NH

    Federal Estate and Gift Taxes amount to 17 billion total. How much of that is from the Estate Tax? How much will we lose with the change?

    If we are to review the entire tax code next year, let’s just make the compromise and move on to next year.

  • John

    Any rich person who wants to avoid the so-called death tax has 16 more days to avoid it entirely.

  • Raymond

    The GOP has done a good job in convincing many working and middle class people that this will somehow affect them. My brother owns a farm, and even if he and his wife died under the old levels, then my nephews would inherit it tax free.

    This is a tax that affects only the heirs of the wealthiest individuals. Thank you to all of those taking the bold step to defend the children of millionaires and billionaires. They are truly an oppressed class.

    Johnson, VT

  • Mari McAvenia

    “Heirs to family dynasties don’t just inherit wealth, they also inherit the political influence their family’s money has bought… breaking up the political influence of family dynasties was the main idea behind the estate tax in the first place.”- JP

    Correct. Inherited mega-wealth = inherited political power.
    Why don’t we peasants just come right out and call these people by the titles they desire to hold? Such as: The Dukes of Warburg, The Earls of Bloomberg and, of course, The Kings of Rockefeller & Bush. Let’s not forget Prince Cheney and the holy heir apparent, Crown Prince Obama.

    Let THEM eat cake! In the meantime, I hope somebody is working on the hybrid tumbrels.

  • Flowen

    Douglas Holtz-Eakin

    Estate Tax borne by “wage-earners”?!?!?!?

    What is this guy good for? Digging ditches! He should be fined for such lies!!!

  • http://www.afarkas.com Andrew Farkas- Cambridge, MA

    What it comes down to is that all of the money in this depression has not simply disappeared- there is simply a great concentration of wealth. The “Top 1%” are hording money at the expense of the rest of us, and the least they can do is let go of a small portion of it when they die. After all, it’s not like their heirs earned that money, and don’t conservatives always tell us to pull ourselves up by our bootstraps?

  • Larry

    The super rich make their money raping and plundering the earth.

    They think their billions will protect their progeny forever.

    Think again you rich criminals.

    Your heirs will curse your name as the earth becomes more and more hostile to any life at all due to global warming and ecosystem collapse.

  • Scott Hopkinson

    What about parents of a severely disabled child who
    will need to be supported through their life ?

    This is a case where the parent does have a
    responsibility to provide for the whole life
    ( as much as possible ) for their child.

  • ulTRAX

    There’s a larger question here rarely explored… whether the GOP… or the far Right which is making up a bigger a bigger proportion of the GOP, has EVER given up their Starve The Beast strategy… the deliberate attempt to undermine social programs by sabotaging revenue. If not, then ALL the rationale the GOP claims why tax cuts are necessary are just smokescreens to conceal that greater objective. Otherwise the only other explanation to the GOP’s fixation on tax cuts when We The People are now nearly $14 trillion in debt is a psychotic break with reality.

    Western Mass… listening on WNNZ

  • ThresherK

    One of the guests is blabbing on about capital growth being limited by the estate tax. That’s such a load of crap that our host is calling him out. Our host.

    PS Wasn’t it Harry Truman who said “Money, like manure, doesn’t do much good when it’s all gathered in one place”? I guess the Beltway Inbreds, GOP, and Conserva-Dems are over their crush on Harry Truman.

  • Scott Burns

    Have a graduated estate tax: 10% on each $1 Million, up to a maximum of 45% on $5 Million and over.

    If the same people that are unaffected by the estate tax, yet protest the inheritance tax, were to win the same amount in a lottery, they’d be more than happy to pay the tax on the lottery winnings. And with the lottery they actually had to do the “work” of going and buying the ticket. With an inheritance somebody else did all the work.

    Speaking for myself, I’d gladly give up 45% of $5 Million. I’ll miss Gramdma, but she can’t use it anymore, and if I can’t figure out how to make the millions I would have left last then I have bigger problems.

    Scott B.
    Jamestown NY
    (WBFO – Buffalo)

  • Larry

    What about parents of a severely disabled child who
    will need to be supported through their life ?

    This is a case where the parent does have a
    responsibility to provide for the whole life
    ( as much as possible ) for their child.
    Posted by Scott Hopkinson

    What about over 5 million per person don’t you understand?
    That only applies to less than 1% of the population.

    Sometimes I wonder about people.

  • John

    If education matters more to decreasing wealth accumulation, then tax all estates over 5 million at 100% beyond that amount and dedicate that to education spending.

  • JP

    When are Americans going to stop buying the derangement spewed by Eakin and his ilk?

    There is no more wealth concentrated at the top than at almost any other time in history!

    … so if wealth at the top creates so many jobs, WHERE ARE THE JOBS?!!!!!!!

  • George (Newton, MA)

    The argument of accumulation of wealth that is preserved by the elimination of the estate tax is incorrect. The ones who accumulated that wealth are dead, their descendants if they work hard will generate more, if not they will behave as fat cats and lose it all anyway

    (From rugs to rags: three generations)

  • Michael John

    Warren Buffett:
    “I happen to have a talent for allocating capital. But my ability to use that talent is completely dependent on the society I was born into. If I’d been born into a tribe of hunters, this talent of mine would be pretty worthless…but I was lucky enough to be born in a time and place where society values my talent, and gave me a good education to develop that talent, and set up the laws and the nancial system to let me do what I love doing – and make a lot of money doing it. The least I can do is help pay for all that.”

    quoted in B. Obama, “The Audacity of Hope”

  • Joe

    The estate tax punishes the most productive members of society, the children of the very, very rich.

  • Larry

    … so if wealth at the top creates so many jobs, WHERE ARE THE JOBS?!!!!!!!
    Posted by JP

    Well if FOX NEWS say the rich create jobs it much be true.

    And it is true, they’ve created millions and millions of jobs in India and China.

  • Paula Norby, Dubuque, IA

    As a second generation business owner, the estate tax has a huge effect on if our family busines survives. Selling the business to pay the estate tax is inevitable if the limit is under $5 million.

    And please address the issue of double taxation. Accumulated wealth has been taxed already, often multiple times.

    Please do not say my name on the air

  • steve

    how dose having only inherited 50 million inhibit someones prospects though education?

    this is a tax for the aristocracy!
    We are a nation of make your self by your work and merit. The English empire crumbled under the weight of a aristocracy.

    Our message to the world is come to America an make some thing of your self!

  • http://cyberfumes.blogspot.com Dave Eger

    So the problem as I see it is that the rich don’t seem to recognize that there are equalizing forces beyond legal ramifications if the wealth imbalance becomes to great. At a certain point, when the weight of debt on the poor becomes to great, and the towers of the rich too tall, those who support it from the bottom will start to lose faith in the directions those towers are going and start to walk away. Without a foundation, the towers can’t last long.

  • Mark (Torrington, CT)

    Large estates make a large percentage of their income through capital gains. This rate should be much higher than 15%.

  • JP


    When are Americans going to stop buying the derangement spewed by Eakin and his ilk?

    There is more wealth concentrated at the top than at almost any other time in history!

    Also, business is more profitable than ever, with record revenues left and right!

    … so if wealth at the top creates so many jobs, WHERE ARE THE JOBS?!!!!!!!

  • ThresherK

    Another Republican (Congressman from n. Texas) whining about “losing the family farm” over the estate tax?

    What, did they finally find a poster child for this bull? Because the search party for the last time they threw a hissy-fit over this came back empty-handed.

  • Margaret

    “estate tax, or “death tax” To the wealthiest 3%? So unless we all will win the lottery we are not discussed or a part of this tax discussion.
    Large amounts of wealth inherited by adult children does not aid the middle class. Wealth marries wealth.

    The message from Republicans is tax cuts to wealthy even when they are dead.
    Family Farms have been taken over by conglomerates.
    A real family farm real money is in their farming equipment and crops.

  • Delia Windwalker

    By protecting the minority of citizens holding the majority of wealth our government is creating an economic ‘gated community’ for the hyper wealthy. The rest of us are struggling to pay basic utilities.

    What would it be like if we offered wealthy folks the option to contribute a ‘Stewardship Tax’ to support paying down our collective deficit?

  • Larry

    As a second generation business owner, the estate tax has a huge effect on if our family busines survives. Selling the business to pay the estate tax is inevitable if the limit is under $5 million.

    And please address the issue of double taxation. Accumulated wealth has been taxed already, often multiple times.

    Posted by Paula

    Get yourself a financail planner and stop whining. There are plenty of ways to shield the family business worth under 5 million from the IRS.

  • Flowen

    This Texan Republican is a Know Nothing frat boy sucking up to the richest people he knows, he has nothing to say but the lying party line.

    Why do you give these people air time?

  • John

    I don’t think education is the answer. I have a JD. I have no idea what level of education Paris Hilton has achieved. I’d gladly trade incomes.

  • Jeanne Albert

    Where is the evidence that the Bush tax cuts helped the economy? Nowhere, because there isn’t any. In fact, the economy was in free fall when Bush left. I’m so tired of this amnesia of convenience when it comes to tax policy.

  • Erin in Cedar Rapids IA

    I think it’s insane that ANYONE should get to keep these tax cuts that were a bad idea ten years ago. They have been in place for this long and only UNEMPLOYMENT has steadily grown. The extremely wealthy don’t need them and even at $28K a year, I shouldn’t get to keep it.

  • Margaret

    Estate Tax…inheritance of the wealth …….can you say Koch Brothers.

    I do not see the Heinz family fighting for it.

  • http://shulmandesign.net Alan Shulmana

    I hear universal displeasure at the prospect of the proposed estate tax in the coming tax and unemployment bill. I hear a tremendous amount of frustration and anger. I consider myself smart enough to figure out what is going on. Perhaps all of you do to. The question is: What does one do about it? Elections don’t seem to improve this situation; a new group of beholden politicians replaces the previous group. If we’re lucky enough to vote out some corrupt individuals, they turn up as corporate lobbyists. What’s the answer? Is there a way we can become part of a solution? I guess I’m not smart enough for that part.

  • http://google Kirby Freeman

    Mr. Ashbrook;

    Would you please venture to ask “where” did these wealthy people get their money. I would bet that it is off the backs of the working class and the government( the war machine)not to even consider the “loopholes” they use to AVOID any tax. Round them all up and let them live in Haiti or one of those countries in the middle east that keep ALL their people noped..

  • Bob Taylor

    My family owns a farm in Va. It is valued at $4.2 million. It’s net income is about $90k per year. Just cause the property is valued at this we are by no means rich.. We all have jobs to aid in the bills. When my mother passes away, my family will be liable for $315k of taxes under the democrat plan… We will have to sell some of the farm or mortgage it to pay this. The inheretance tax should only be on cash in the bank, not property. If we have it it should be for everyone, not any property limit. People should not have to borrow money to pay taxes, this is what alot of poeple don’t understand. Thanks for your time.

  • James

    First of all this topic is insignificant especially when we still have a 9% unemployement rate and such a large deficet.
    Secondly, people effected by the death tax don’t spend most of their income in the first place compared to the middle class who spend most of their income which is good for the economy. In my opinion, if they are not even using this money yet free loading off the liberties of our land then I say tax them. Again, this is not an issue, the death tax contributes less than 2% of our federal budget.

  • Les from Vermont

    How are the not so wealth suppossed to get the hands on more money so that “those same economic factors can benifit them.”? The rich have all the money!

  • http://shulmandesign.net Alan Shulman

    That’s Alan Shulman, not Shulmana, from New Hampshire where we can live free and die.

  • Sivon

    Respectfully need to correct Tom. While you are right to say South America does not have much of a middle class, the countries of South America are not Banana Republics. They may be overly dependent on a few exports but the Banana republics are usually considered to be in Central America.
    Namely Guatemala and Honduras, both of which have rich histories with United Fruit Company.

    Thanks for your show.

  • David

    Great conversation Tom. I’m so glad that nobody on air has used the misleading phrase “death tax”. Keep on keeping it real. Fremont, NH

  • Jay in Buffalo

    The wealthy are laughing at how they have been able to con the ordinary person. The government (only the US Federal) is a three to four trillion dollar a year business. Many of the wealthy are receiving money from the government because they provide either services or products to the government. In essence just like any individual who works for government for a yearly salary or hourly wage you have wealthy who are also dependent on the government for their wealth. These individuals have convinced ordinary taxpayers to protect their private wealth, gained by providing services and products in the exchange for tax revenue. Many of the wealthy are just as dependent on the government as an unemployed family.

  • JP

    That’s just the point TOM!!!!

    Americans aren’t getting ahead… only the one half of one percent of the wealthiest are “GETTING AHEAD!!!!!”

  • Larry

    My family owns a farm in Va. It is valued at $4.2 million. It’s net income is about $90k per year. Just cause the property is valued at this we are by no means rich.. We all have jobs to aid in the bills. When my mother passes away, my family will be liable for $315k of taxes under the democrat plan… We will have to sell some of the farm or mortgage it to pay this.
    Posted by Bob Taylor


  • Dorothy

    I’m an attorney who has practiced in the estate tax area for the past 34 years in 2 stats. I have had many family businesses and a few farms and not one has ever been sold to pay estate tax. EVER!

    Secondly, if the Republicans complain about the unemployment benefits not being paid for, how about these estate tax cuts? Are they paid for? No.

    Thirdly, how can the GOP claim that they want to reduce the deficit, which was created by the Bush tax cuts, and yet want to decrease revenue even further? Isn’t that incredibly hypocritical? Until the Bush tax cuts, we had a surplus. If we allow those tax cuts to expire, yes, taxes on everyone will increase, but we will be able to get rid of the deficit.

  • ThresherK

    I have a question: What is the estate tax in places with low taxes, lots of freedom, and virtually inoperable governments, such as Brazil or Somalia?

    The right-wing guests on this episode aren’t making a lot of sense, as seen by the very mild questions required to throw them off trail.

  • geffe

    The GOP loves using that down home image of the family farm complete with Norman Rockwell illustration.
    The reality is that there are very few family farms left in this country that would even come under this tax.

    I’m kind of sick of hearing this argument.

    Did I just hear Tom Ashbrook sound like a right wing radio host? Shame on you Tom.

  • Corey

    The proper estate tax rate is zero.
    Moral argument: The assets have already been taxed many times over, and what to do with accumulated assets should be up to families.
    Utilitarian argument: While relatively few estates are taxed, this is only because so much is wasted on avoidance activities. Sub-optimal economic decisions are made over long periods of time to avoid the tax trap. 15% of lawyers work in estate law. This produces nothing of value. The economic suppression caused by the estate tax far exceeds revenue collected by it. Deployed more efficiently, this capital would certainly cause net tax revenues to rise, not fall.

  • Cyrus

    Both arguments I’m hearing are terrible. On the one hand, your republican guests adhere to the most specious possible arguments about why massive concentrations of wealth must be defended, while your democratic guest walks directly into the “distribution of wealth” trap. It’s NOT about distribution of wealth, it’s about fairness. The accumulation of wealth depends on a robust infrastructure, and that infrastructure was paid for by taxes. In order to continue to permit Americans to pursue the American dream, we need precisely the same resources provided to those who currently hold massive fortunes: roads for their workers to drive to work on; clean water and air to keep their workers healthy; quality public primary and affordable secondary education, and the rest. Why do we forget this simple fact that was understood well by, among others, Adam Smith, the Republicans’ supposed hero? The accumulation of wealth depends on a robust, public infrastructure, and those who have accumulated wealth have done so because of public services. They must in turn help to pay for those services so that future generations can have the same opportunity that was given to them. That’s all this has ever been about: basic fairness.

  • http://WBUR Carla Trumper

    What our ‘Problem’ is; when, and I mean when does the class war end? Does Washington really believe that average Jane’s such as myself think that tax cuts for the wealthiest people who don’t create jobs’ is real? When is Congress going to come back to reality that is AVERAGE Americans. These tax cuts DO NOT effect us in any way. We pay the most, we receive the least. I am fed up with all the nonsense, one person making decisions for ‘us’, should walk 1 day in our shoes, 1 year of our income, 1 month of co-pays, etc… Bernie Sanders seems to be the only person who understands these day to day things that ‘average Americans’ go through. To the last caller’s comment, YOU ARE GIVING PEOPLE TOO MUCH CREDIT. People are not inherintly GOOD, if they were, we wouldn’t need any of this.
    Columbia, SC (Democrat’s Hell)

  • Larry

    Lady who thinks she owes nothing back. We are going to eat the rich since you’ve stolen everything we have.

    Signed, The 300 million Americans you stole from

  • Heidi Nepveu

    I stand with Senator Bernie Sanders. I am seething mad about this entire compromise. The Republicans are proving themselves to be frauds and hypocrits by extending these cuts. They talk about fiscal responsibility, but only if it doesn’t affect their wealthy supporters. What they will do next is cut spending on vital supports to the safety net and leave millions starving in the cold.

    This compromise is fiscally irresponsible.

    Heidi in Burlington, VT.

  • JP

    To the woman who called freaking out about the wealthy having to pay their share:

    Every single dollar earned by the wealthy consumes at least some of the limited resources of this planet, or what one might call “planetary legacy.”

    Whether in paper resources, mineral, energy, rubber, asphalt, petroleum, water, LAND (which is highly limited), food for workers, etc…, resources of some sort are consumed for every dollar earned. Also, some degree of pollution is likely produced.

    Since this is the case and we live on a planet of limited resources, one must question why our society allows the wealthy to use up a disproprtional amount of “planetary legacy” for their own personal benefit.

    In other words, a very few are costing the vast majority of current and future generations quite a bit of their planetary legacy.

    They have no right to do this, EXCEPT that our society never gave much thought to what the wealthy really cost the rest of the world and future generations.
    Yes, entrepreneurship itself creates value, but just how much do all future and current generations on Earth owe a single entrepreneur? Should one entrepreneur be allowed to bleed the planet for tens of thousands, or even millions of times the resource cost of the average individual? Our society lets a single wealthy person do exactly that!

    My contention is thus that the wealthy owe the rest (current and future) due to the very fact that our society allows these few to amass so much unto themselves, for their own private and selfish benefit.

    If they are forced to pay back this debt to society in the form of higher proportional taxes, so be it.

    They SHOULD be forced to pay restitution for the disproportionate amount of limited resources they are allowed to consume, and tax is the easiest, most equitable way for them to do it.

    Even when paying increased taxes, the wealthy in our society are still able to become filthy rich and enjoy the benefits of their wealth beyond the wildest dreams of the vast majority of us.

    They have nothing legitimate to complain about, since our society is more than fair to these individuals, and it’s not like the U.S. will deny them any wealth at all as though we lived in the ex-Soviet Union.

    The wealthy in America will still have the best of all worlds, despite being forced to PAY THEIR FAIR SHARE, as per this simple, logical argument.

  • Mari

    Cathy the caller sounds like the second coming of Leona Helmsley. You get the title, Cathy: Queen of Mean II.

  • Julie Rohwein

    @Bob Taylor

    I think if the goal were to actually protect farms and family businesses, there are a number of practical fixes that might be applied. As you suggest, we could tax cash or other monetary instruments, but not property like farms. Or we could apply the tax only when an asset was sold — so as long as the farm or business stays in the family, no tax. If sold, tax at that point. One might imagine a similar sort of protection for assets put in trust for disabled heirs (something I have some experience with, as my brother suffers from a crippling mental illness.) However, it seems to me that the “conversation” on this topic is more about enforcing ideology. Thus, hysteria reigns.

  • Jim from Kirby, VT

    Cut the crap. Cut out the PORK!

  • ThresherK

    The caller at 10:44 is bonkers. She’s whining about “if I put some money away, why should the government take a big chunk of it?”

    Listen, Cathy, YOU ARE EXEMPT UP TO $5 MILLION PER CAPITA. You have what we call “Joe The Plumber’s Little Helper’s Disease”. And Tom, why are you playing devil’s advocate with your panelist who is trying to talk sense about her hypothetical situation?

    (PS I thought I’d give Larry a break–he’s been doing a lot of this work today.)

  • http://cyberfumes.blogspot.com Dave Eger

    How many millions does Kathy have? Who is it that is confiscating wealth from whom?

  • ulTRAX

    “It’s OUR money”… it’s the frequent refrain of those who buy into the Orwellian Right’s tax cuts spin… like one of the last callers.

    Problem with this “logic” is that We The People pissed away some $13 trillion on ourselves since 1981 THAT WE HAVE NOT PAID FOR… in fact the Right REFUSES to pay for.

    At SOME point, even the most irrational Right winger has to admit that some of “our” money is really the CREDITORS money. Or maybe not.

  • Larry

    Thanks ThresherK

    Fighting the brainwashing is hard work.

  • Nancy O’Connell

    If we are concerned about reducing the deficit, then as President Obama has said, sacrifices will have to be made. At this point the only ones that are being forced to make any sacrifices toward this goal are the federal workers whose salaries the president chose to freeze for two years. The cost this reduction in the estate tax will cost more than what will be saved by the tax freeze. If there is a serious concern about reducing the deficit then this estate tax should not be allowed.

  • http://WBUR George (Newton, MA)

    The argument of I have the right to pass it on to my kids is partially correct. You can pass the wealth to whoever you want from your kids to the person to whom you are not related at all. Whoever gets it should pay income tax.

  • Wes from Kingsport, TN

    I think this quote sums up the estate tax debate rather well:

    “It is an unfortunate human failing that a full pocketbook often groans more loudly than an empty stomach” — Franklin D. Roosevelt

  • geffe

    The caller Cathy is the typical of how misinformation has distorted this argument. She embodies the selfish attitude that some Americans have. It’s all about them and everyone else should just go to hell.

    Taxes are the price we pay for civilization.
    Oliver Wendell Holmes, Jr.

  • jack

    Tom, Rep McDermott explained it very clearly. The Reps lowered taxes for the rich in ’01 & ’03. A real estate bubble was created to give people a false sense of wealth. The bubble burst, and now we have almost 10% unemployment.

    Can the Repubs explain to me again how that “trickle-down” economic theory works, again? hahaha

  • Bob Taylor


    The GOP loves using that down home image of the family farm complete with Norman Rockwell illustration.
    The reality is that there are very few family farms left in this country that would even come under this tax.

    First, under the Democrat plan Its 3.5 million.

    Second, I’m sorry that being on of the few family farms that may be effected doesn’t count. The REALITY is there are many small family owned businesses everywhere in all of america that is effected by this.

    Again, i’m all for taxing at 50% on cash in the bank, investments or any other cash. Just not property.. taxing on property is misleading. Thanks

  • Peter

    The cut government spending/ cut taxes angle is just a smoke screen that makes the rich richer and the poor poorer. Show me any facts that prove different and i’ll bet there are a thousand more that prove it true. The whole discussion in the media is soooo stupid in that it is not even the real question. The real question is what services do we need and how are we going to pay for them.

    What family plans a budget and how to generate revenue without first sitting down and assessing what they have and what they need? Do we really need cable tv? Do we really need to spend 750 billion a year on military? Do we want good public education, parks, health care for the old and disabled veterans? The next question is how to generate revenue to pay for the things we need. To me taxing the rich is a great way to pay for government services everyone can enjoy. The rich can always give the people under them a raise and let them take the tax burden. The super rich getting millions of dollars in bonuses this year should step up and say “We’re in trouble, i’ll pay 95% income tax this year to help my country”.

  • Robert Schirmer

    The estate tax is legalized theft. The role of government in estate taxation is analogous to that of the burglar who reads the obits and then loots the decedent’s home while the family is at the funeral. The debate should not be over the rate of this tax but rather the morality of it.

  • John

    If all the tax increases that the apologists for the super rich routinely dismiss as each being insufficient to solve our budget problems were all passed, there would be at least significant progress made in solving them.

  • John

    Taxes are the price we pay for civilization.
    Oliver Wendell Holmes, Jr. – Posted by geffe

    Holmes left his estate to the US.

  • Larry

    The estate tax is legalized theft.
    Posted by Robert Schirmer

    What is legalized theft is how the rich become super rich.

    If you don’t know that you are very ignorant of what is going on in this country.

  • ulTRAX

    Jim from VT wrote: “Cut the crap. Cut out the PORK!”

    SURE!! But the disingenuous claim that all our problems are because of “spending”, is absurd. Some of it is… but think it through. If we cut spending to ZERO… how would you pay down debt without REVENUE!!! And what tax payers are going to agree to pay taxes for YEARS without even the most basic government services like defense?

    The Orwellian Right has been successful in encouraging such thinking, but at the expense of our collective economic IQ.

  • ThresherK

    Another hack, Sri from Iowa (?) at 10:52, who whines about his money being taxed, retaxed, etc, for the expected windfall someday. Another case of Plumber’s Little Helper Syndrome.

    At some point isn’t it just cruel to parade these low-information consumers of low-information media on, to show how little they know?

    I’d like to know how much our better-informed panelists have to stifle giggles at times like this.

  • Raymond

    Cry me a river for the children of the super rich. If I build a fortune and my children can’t make it without me handing them down that fortune, then that is their problem.

    Mr. Holtz-Aiken talks about a spending problem, well then what entitlements do we cut? Why do workers in the rest of the industrial world get better social benefits? How do we pay for the wars begun under the Bush administration, when we went to war and cut taxes?

    Johnson, VT

  • Larry

    Finally. Capitol growth assets which have never been taxed.

    That’s the reality. Too bad Americans are so stupid they fight for the super rich Capitol growth assets to never be taxed at all and pass it untaxed to their heirs.

  • Scott B

    The rich aren’t investing their inheritance money in creating jobs. They’re socking it away, investing it, or buying luxury items.

    My wife and I have worked for several business (big and small) where the owner (or leadership) decided that they’d rather lay off employees and their cut wages and benefits before they take a cut themselves. An we watched them, or the companies, keep their toys like racing teams. They rub salt in the wound by crying poor, like Ken Lay complaining how he had to sell one of his houses.

    When does this sense of entitlement by the very rich end?

    Warren Buffet wonders why he’s taxed at a lower rate than anyone in his office? Robert Reich has it right, it’s becoming a plutocracy.

    Jamestown, NY

  • Steven

    What I think is insane is that McDermott considers the estate money the government’s money.
    Why should the government be entitled to that money? It’s totally crazy.
    I think people should think logically. How is the government more deserving than the estate?
    The government has gotten into this mindset where they think they are entitled to everything — and they are the ones that should decide what money the people are allowed to keep. That’s totally insanity.
    People complain about corporations being greedy. What about the government.

  • http://none Walker Martin

    You can envy the super rich, but it is morally wrong to establish public policy by discriminating against 1% or 1/10th of 1% of the country’s households even though they are rich. In a practical vein also, such a policy will be self defeating, because those super rich will rearrange their lives to avoid the tax or to avoid the U.S. altogether.

  • Mari

    There’s nothing wrong with entrepreneurship. Thing is, many of those people who claim to be “self-made entrepreneurs” and became mega-rich STOLE the ideas of real, ingenious inventors.

    Does the name Phineas Farnsworth ring a bell? He invented television. Died broke.

  • John

    They can always give it away before they die. Why should the living have fewer rights than the dead in determining how assets should be distributed? We don’t let the dead vote.

  • Mari

    My error: PHILO Farnsworth invented TV.

  • miro (metro west)

    Inherited money is not earned money,
    and the dead do not own property.
    Five million dollars is certainly more than enough money to support any descendants for the rest of their lucky lives, and that is the minimal amount that is passed on from an estate.

    What happens in the absence of taxes on inheritance is that a permanent economic aristocracy is maintained and accumulates ever greater portions of the national wealth. The top 1% gain greater control over the lives of the rest of us.

    Depressions occur when this class accumulates a large share of the available wealth — this is because the bottom 99% cannot afford all the goods produced, and also because the rich, having way more money than they need, are prone to speculative excess. Extreme economic inequality creates crashes,

    Enabling permanent inherited aristocracies is bad for the economy, lethal for democracy, and incompatible with the core values of Christianity.

  • Marty Tatro

    So, I am a bit of the ‘middle of the road’ in my politics, but it seems to me that there are solutions that work for both sides, if they are willing to agree to a compromise.
    On the tax question. If the folks that have don’t want to participate by moving some of their savings back into the public sector through estate and gift taxes, then why not just require that all of their employees receive a 5% increase in wages? Require that the companies take over, completely, the paying of the Social Security,Unemployment and Employment taxes that the employees pay out of their meager incomes now. Give a tax credit each year to companies that move 15% of their profit back into the public sector for social programs like education. Make donating and supporting more profitable than not.
    While I think that taxes could be managed better than they are, I also know that there are folks out here that haven’t the financial backing to pay their heating, electricity and other monthly bills due to the woes of the financial markets and the recession. Do those that have the money think that that is OK? Should we allow true Darwinism to take over? I can survive. I can survive very well if I don’t have to obey social and legal moral strictures on how I make my living. Do they want survival to become the new reasoning for doing things? 98% of the US population knocking down their wrought iron gates to their second home to come and steal from them might be more unsettling to them than paying more out.
    What do you think?

  • Larry

    You can envy the super rich, but it is morally wrong to establish public policy by discriminating against 1% or 1/10th of 1% of the country’s households even though they are rich. In a practical vein also, such a policy will be self defeating, because those super rich will rearrange their lives to avoid the tax or to avoid the U.S. altogether.
    Posted by Walker Martin

    Let the super rich give up their U.S. citizenship and move to Communist China (or India or Saudi Arabia) if they don’t want to pay taxes this country needs to make it a decent society. They have all the money (which they have accumulated largely by theft) and they should be paying most of the taxes.

  • http://cyberfumes.blogspot.com Dave Eger

    Oh man Thresher, I almost forgot about Joe the Plumber. That guy was one of my favorite media distractions ever. I really don’t get why some people defend ideologies that do nothing but oppress them. That guy wasn’t even a licensed plumber if I remember correctly. He was defending a system he didn’t even take full advantage of, but it sure too advantage of him.

  • geffe

    Steven, read the comments above the one you posted.
    Again, if you’re not one of the top 2% you or have assets above 5 million dollars why are you even making these comments? Do you drive? Do you eat? Do you watch TV?
    Is the water you drink safe? Well that might be a stretch in some states… Do you have police and fire departments?

    How about schools? Did you go to one?

    I’m more interested in government being more efficient and working than being broke and dysfunctional.

  • Rob from Savannah

    To me, this is a simple issue of utility. Yes, many wealthy people worked hard to earn their living. But they chose to do it here in America because of the infrastructure (structural, technological, educational, etc) and the type of society that we all have built together. Those who earn far more than the average American have therefore gotten far more out of the system. Having appropriately high taxes on certain income levels is not a matter of hating the wealthy or wanting to redistribute simply out of naive kindness – it’s a matter of pay-for-use and it’s a matter of investing in ourselves so that others can have the same chance for success.

    It’s interesting to hear so many conservatives shouting that it’s not “fair” for the wealthy to have to give up a few extra percentage points- i.e., *only* being able to pass on 8million to they children instead of 11million. At least I can respect conservative arguments that center on the incentives or disincentives created by our tax code. And while that argument may have some truth at the margins, it means almost nothing at the tax levels we’re talking about. Maybe I’d buy it if were were talking about tax rates as high as those in the first half of last century.

  • http://shulmandesign.net Alan Shulman

    I repeat. I hear the problem. I even hear what should be happening. What I don’t hear is how one gets it to happen. There seems to be some basic agreement here. What are the strategies that reverse or begin to reverse the trends in wealth concentration and the unfairness it solidifies that everyone I’m reading finds abhorrant?

  • http://cyberfumes.blogspot.com Dave Eger

    If you have more than $5 million to pass on, please identify yourselves so that I can know to take your opinion seriously. Everyone else, read ThresherK’s posts.

  • Larry

    If you have more than $5 million to pass on, please identify yourselves so that I can know to take your opinion seriously. Everyone else, read ThresherK’s posts.
    Posted by Dave Eger

    Tonight, I’m going to win the lottery and will fall into that category.

    Signed, ever deluded American

  • Joe

    Taxes have always been debated, and always will be. As a low-end middle-income citizen, I see no need in the “Death Tax” as it is being debated. Include the inheritance as a source of income, and tax it as such.

    As far as income taxes are concerns, throw away the tax brackets and tax everyone a flat percentage. As I stand next to my father, I feel it rediculous that he pays a higher percentage of taxes simply because he makes more income than me. Set a flat percentage tax for all Americans, and I will stand next to my father and shake his hand saying, “You paid your X percentage, and I paid my X percentage. You may have had to pay more, but I’m proud that to say that I paid the same percentage.”

    Much of our deficit as it stands comes from our country becoming more and more socialized. Social Security, Medicare, Medicaid, and other government support systems are draining our economy. When SS was first put in place, it was designed to be a retirement fund that working citizens paid in to and received from when they retired. Had it been run as it was originally intended, SS would not be in the state it is.

    I have watched individuals live their lives with hands out waiting for that monthly check to come in, yet have never paid a dime into the SS system. We have allowed SS to become the go-to for individuals who cannot or will not get a job (including those who refuse to work and let society support them). SS is seen as a huge pool of money with no immediate purpose, so why not put it to government and social use? Let’s make SS what it was, a retirement fund for those who paid into it.

    Having gotten off topic, the question of the “Death Tax” receives this answer from me:

    Count it as income and tax it as such, and at the same time initialize a flat percentage tax rate for all Americans. Whether that tax be 10%, 20%, or 30%; whatever the tax rate may be needed, every citizen should pay the same percentage of the income as taxes. This is only way to be truely “fair”.

  • http://cyberfumes.blogspot.com Dave Eger

    Rob from Savannah, please don’t forget that many of the rich didn’t really work that hard, but just committed crimes that legal loopholes allowed them to get away with.

  • Ken

    Posted by Corey, on December 15th, 2010 at 10:43 AM
    “The proper estate tax rate is zero.
    Moral argument: The assets have already been taxed many times over”

    How can you possibly say these assets have been taxed many times over? The vast majority of the assets have NEVER been taxed. My wife’s grandfather bought GE in the 1920s with a cost basis of 4 cents per share. It is now worth about $17.60 per share, so $17.56 per share is cap gain that has never been taxed (because it has never been sold). If he’d bought 1,000,000 shares, that would be $17,560,000 in gain that would pass tax free to heirs, never having been taxed at all, under your “moral” plan. And yet if he’d sold the shares himself, he would have paid millions in taxes. So, why should the heirs get off without paying anything on that windfall that they did nothing to earn?

    Why can’t people figure this out? I guess they first have to turn off Fox News so they can avoid being misled by right-wing propaganda.

  • ThresherK

    I’m a bit surprised nobody’s yet mentioned the intersection between those ignorant on tax rates and exemptions, and those self-styled Randians who are threatening to “Go Galt” over the affront of tax rates which seemed (on the whole) perfectly acceptable during, say, Ronald Reagan’s presidency.

    Funny thing is, those tantrum-throwers never seem to muster up the courage to hold their breath until they pass out, or even turn blue.

  • Neil

    Inheritance tax and progressive rates reflect the case that the people who make and accumulate large sums of money are the beneficiaries of our system of capitol and our society. It seems to me that they should be the ones who support that system.

    The second point of the inheritance tax is to stop the accumulation of wealth from one generation to the next and the next etc. This inevitably leads to the feudal system prevalant in Europe during the middle ages. I don’t think anyone wants to be born a serf for life, and this isn’t a promising scenario for our country.

    Put a reasonable limit on tax free inheritance and tax the hell out of the rest to support the systems that helped that individual to accumulate his wealth. Perhaps a high tax rate will prompt wealthy individuals to donate their wealth to the causes they support during their life.

    Comment from “Time enough for Love” by Robert A Heinlein.

    “Do not burden your children’s lives by making them easy!”

  • Marty Tatro

    “Count it as income and tax it as such, and at the same time initialize a flat percentage tax rate for all Americans. Whether that tax be 10%, 20%, or 30%; whatever the tax rate may be needed, every citizen should pay the same percentage of the income as taxes. This is only way to be truely “fair”.
    Posted by Joe, on December 15th, 2010 at 11:13 AM”

    Joe, I am sorry but I fail to see how taxing a person that makes $14K a year at the same rate as that of the person who makes $14 Million a year is fair. It costs a minimum amount of money to survive, more to get by paying most of your bills, and more to be able to pay for all the incredible extras like medical and disability. So Mr $14K gets 25% of his income taken. This reduces him to approximately $10,500 for the year. Could you live on that? What about you, your children, and your partner all together? Pay for you boy to get dental work to correct a cleft pallette? Your wife needs her appendix removed? You want to retire someday?
    If we on the lower levels have no money to do this stuff, what happens to our society? Anarchy? Murder and mayhem? Slavery? Much better than paying a tax.

  • Simple Country Lawyer

    Paris Kentucky
    I like Prof Madoff’s idea but with a twist. Most people in this boat plan, and actually fund their plans, around the estate tax. By allowing an estate subject to the tax to opt to be taxed on an income to the estate and income to the beneficiaries at an “inheritance” rate ala capital gains, over ten (ten) years avoids the necessity to pay it up front, (sell the farm,)and essentially allows post death tax planning. To keep all the estate planning industry in place make it slightly more beneficial to do it pre-death, but their business will go up anyway as the planning on the back will be as elaborate as on the front.

  • Earl Shepherd

    The conversations on tax policy excludes how money or wages are earned. It seems to me that the conversation is limited because we assume that we have a pure free market system. The comment heard so frequently, “Its our money, we earned it”, clouds the issues. Wages and salaries in America have always been subject to governmental policies or control by monopolists. The free market that is often referenced forget Adam Smith’s, Wealth of the Nation, was a treaties that attempted to address the inequality of earnings. He maintained that in a free market…earnings would be somewhat balanced because undesirable jobs (farm workers, health aids, etc) would naturally command higher wages. All of us know that this is not true in America. Therefore, our system is one of controls that benefit some and not others. It is incorrect to say that wages, salaries or wealth is entirely the results of ones own efforts.

  • Jim in Omaha

    The estate tax (there is no “death tax”) is primarily paid on gain THAT HAS NEVER BEEN TAXED. It most definitely is not double taxation. In fact, it’s the exact opposite. It is essentially paid on estates whose high value is the result of a business or capital assets that have increased in value over time. None of that increase in value, or gain, has been taxed and, without an estate tax, never would be taxed, given the stepped-up basis that currently applies.

  • Steve

    To the question of what happens….

    Problems engulf the vast majority of citizens until even the wealthy fear of a collapse or a revolution.
    (See FDR turning his back on his class out of the fear of Huey Long and something worse)

    However, the wealthy in this country have been buying large tracks of land outside of the US borders – so they may indeed be able to turn the US into a plantation.

    The answer is painful but will become increasingly clear to those who are now sleeping (Progressives on the left hoping for social welfare and the theft of other peoples money; and the irresponsible right that thinks they have created their wealth through hard work alone and thus turn a deaf ear to the suffering around them)

    Opt out now.

  • Gerald Fnord

    The “estate transfer tax” is well-named: it is a tax on the transfer of (large) estates from someone who does not exist any more to a named or default set of other people. Such is a creature of government in two ways:

    1.) Large estates are not natural property, in the sense that they could not be accumulated and held by very many people in the state of Nature. It is only State power that allows such massive accumulation and retention of property in the face of so many who would (rightly or wrongly) feel they deserve to have some of it.

    2.) In the state of Nature, once you die you can’t do anything more—there is no way of enforcing your will, last or not. If you have managed to accumulate a large estate, you certainly have hired many guards, and it is quite often the case that _they_ divide your inheritance, and quite often your would-be inheritors.

    Just as corporate taxes are entirely justified because corporations are State creatures, the transfer of a large estate is intimately conencted to the existence of a State and the compliance of your fellow-citizens, so it is quite right that it be taxed for the benefit of it and of them.

    What constitutes “large”? The state of Nature argument would suggest “much larger than one family could hold on its own”, but in the end it comes down to politics, and it will be done well or badly, but it needsto be done.

    Palos Verdes, Ca.

  • http://AledaDigginsArt.com Aleda

    Super rich people (who like to whine about their tax “burden”) should give away their wealth in their lifetimes if they want so badly to control where it ends up. Another thing: they claim they are the ones who “give” everyone else jobs. Really? They should have to prove it; their inheritors should have to use their inheritance to employ their fellow citizens.

    And check out next hours’ On Point discussion, in particular Anthony’s argument:

    “Why in the world wouldn’t Obama, Emmanual, et al, have made the argument loud and clear while pushing for single payer health care: this country is brimming with entrepreneurial energy, it was built on this energy, and would reemerge strongly in the global economy and become again the leader in innovation if all those who desire to be in business for themselves didn’t have to fear the loss or unafordabiltity of health care? When I mention this to certain people, a light goes off in their head…where is the “positioning” skills of our public leaders? If you can make “death panels” stick, you should certainly be able to convince people that good public policy could set them free in their professional lives!”

    RIGHT ON and well said, Anthony!!!!

  • Robert Schirmer

    Why is it deemed immoral to support tax cuts that load a huge deficit on our children but perfectly acceptable to confiscate via the estate tax the transfer of wealth to those same children?

  • Marty Tatro

    “Posted by Gerald Fnord, on December 15th, 2010 at 12:26 PM”
    Gerald, if that truly is your name, you are seriously my hero!! Your obvious education and thoughtful discourse are proof positive that you have a valuable outlook for this forum. Thank you for your comment. Even if I didn’t agree with it, I would thank you.
    I think we should shut down government for a year, close all the farms and providers of our basic needs, open the borders, and hand every citizen one gun, with one magazine of 15 bullets. After a years time it will no longer be necessary to worry about taxes or anything else. (I don’t really think this, but it does offer an option) What is going to happen if the poor continue to get poorer? Eventually someone will look at our hyper-weakened population and government and decide to take over the US. It has happened before. It will happen again.
    If anarchy is the only way to solve our problems, can I get a ticket out of this country to one where people still want to live? I will pay for it.

  • Larry

    Why is it deemed immoral to support tax cuts that load a huge deficit on our children but perfectly acceptable to confiscate via the estate tax the transfer of wealth to those same children?
    Posted by Robert Schirmer

    The top .03% are not the same children who are being saddled with the debt. And the capitol assets of those estates have never been taxed and should be if those “children” don’t want to live behind gates fearing being eaten by the hungry 300 million.

  • d m nolan

    Holtz-Eakin asserts that tax policy will not solve America’s problems. But then he uses his claim as evidence. Larding up responses with phrases like “the fact of the matter is” or “let’s be honest” doesn’t provide further proof, it merely seeks to persuade in the absence of facts.

  • Joe

    If anarchy is the only way to solve our problems, can I get a ticket out of this country to one where people still want to live? I will pay for it.

    Posted by Marty Tatro, on December 15th, 2010 at 12:56 PM

    I do not know how you twisted what I posted earlier as leading to slavery and what-not, but if you want out of the country, give me a call; I’ll help you pack. I am sure that are plenty of countries that would love to support you.

    What so many people lose sight of is that there will always be the wealthy, and there will always be the poor. I have already expressed that I do not make a lot of money, but I earned everything I own.

    That said, the reason that it is impossible to ever fully eliminate very-low income situations is that costs will never allow it. Take, for prime example, minimum wage. Prices of products equalize at a point where costs can be afforded and a profit made. When minimum wage increases, the costs to produce goods inevitably increase. Prices will increase to offset this increase in costs of production, and once again people will complain that they do not make enough. Minimum wage increases, people make more money, prices increase, they have less left. It is an endless cycle that can never be ended.

    And if you say that profits on products are the error in this equation, then I will counter that you are willing to pay said prices. Too often individuals wish to live and purchase beyond their means.

    Growing up my family used coupons to purchase groceries, we performed our own repairs and renovations around home, and we fought for everything that we own.

    Now, as a grown man, I understand the concept of thriftiness (being an Eagle Scout, I understand well this concept). I am fully capable of performing my own plumbing repairs, working on vehicles, building a house, running computer networks. I pay for services only when I am physically encapable of performing the work myself.

    I attended college on 6k dollars a year of scholarships, worked in a restaurant kitchen as a dish washer to pay for books, gas, insurance, and what little enjoyment I could afford. I even worked at Staples toward college graduation as an Easy Tech, going to college full time and working full time. Today I am in my job and have the skills and knowledge to live my life and survive. I have never asked anyone for anything, and do not expect nor want to be tax any more OR less than anyone else in this country, regardless of how much they may inherit.

  • Joseph

    I support the return of the estate tax, effectively abolished by G.W. Bush as part of his ill advised budget busting tax cuts for the high income and wealthy, as it is virtually the only federal tax on wealth and inherited wealth as opposed to income.

    The current estate tax was first instituted as part of the progressive movement in the early 20th century to address the inequities that had come about during the Gilded Age and the rise of the Robber Barons. Its intended purpose, in addition to raising revenue for the federal government, was to prevent formation of a small class of hereditary wealth, an antithesis to American ideals.

    Today after 30 years of near constant reduction in the income tax rates for the highest income individuals, as stated previously a near elimination of the estate tax, and an increase in FICA tax rate only on wage income and with a low cap the result has been concentration of approximately 70% of the nations wealth into the hands of the top 10% of the population.

    I would like to see the estate tax altered to taxation rate of 55% with an exemption of $1,000,000. An unearned step up of $1,000,000 plus 45% of everything over the $1,000,000 is quite sufficient.

  • Joe

    And by the way, I received my 4-year degree 3 years after highschool graduation.

  • Larry

    I attended college on 6k dollars a year of scholarships, worked in a restaurant kitchen as a dish washer to pay for books, gas, insurance, and what little enjoyment I could afford. I even worked at Staples toward college graduation as an Easy Tech, going to college full time and working full time. Today I am in my job and have the skills and knowledge to live my life and survive. I have never asked anyone for anything, and do not expect nor want to be tax any more OR less than anyone else in this country, regardless of how much they may inherit.
    Posted by Joe

    Now kids can’t get those jobs working in kitchens and painting houses due to illegal immigrants having them.

    Tuition has gone up 200%.

    You want to pull up the rope after you made it.

    Tax the criminal rich and get back some of the money they stole from the country.

  • Joe

    Or tax everyone at the same percentage and be proud that are taxed as much as anyone else. Quite trying to punish those that worked for what they have.

    I daresay that if you were “super rich”, you would be arguing against the very points you fight for now.

  • geffe

    Joe do you drive on roads? You went to public school as well. You used public money that was raised from taxes.
    You think you’re an island but you are not.

    It’s amazing how well the propaganda has worked in this country that a person of your background will support the people the top 5 to 2% and piss on your fellow workers.

    There was a time in this country when workers had some solidarity. Now it’s all about the so called individual.
    As if that idea was ever true. It’s a myth, a myth concocted by the same people who thought up derivatives and the idea that you could use your home as an ATM.

  • William

    The Death Tax might sound like a good idea, but what if it is expanded to include parents paying for their children(s) college tuition? or why wait till a person dies? Should the “rich” pay quarterly like estimated taxes? Why should the gov. wait till a person dies? They need the money right now. Once the door is open it is very difficult to close. These taxes sound great just so they don’t take your money. If the bar is lowered for “rich” and you find yourself getting taxed on your savings is it still such a good idea?

  • John

    Quite [sic] trying to punish those that worked for what they have. – Posted by Joe,

    – This is the argument for not taxing estates? The person who may or not have worked to amass the fortune is dead and beyond punishment. His or her heirs aren’t being punished for what they worked for as they didn’t work for it.

  • Sam

    “Today I am in my job and have the skills and knowledge to live my life and survive. I have never asked anyone for anything, and do not expect nor want to be tax any more OR less than anyone else in this country, regardless of how much they may inherit.

    Posted by Joe, on December 15th, 2010 at 1:49 PM”

    Watch out Joe, be careful what you wish for!

    God Forbid (if you believe in any) that anyone like you can become bankrupt by single Medical Inness or Auto Accident..

    But in case that happens, I really want to see how people who profess not to use any “State Aid” will keep their word and to what extent…

  • Marty Tatro

    “I do not know how you twisted what I posted earlier as leading to slavery and what-not, but if you want out of the country, give me a call; I’ll help you pack. I am sure that are plenty of countries that would love to support you.” Posted by Joe, on December 15th, 2010 at 1:49 PM
    Sorry Joe. I wasn’t picking on you specifically, and if I really wanted to leave the states I would lose all the benefits of 10 1/2 years of military service(including a year in Iraq) and almost 30 years of employment taxation and stuff out of my paychecks. I have given into the system, and therefore I no longer have a need to ‘prove’ myself before using services I need here.
    On that note, I am a firm believer in helping yourself, but my mention of slavery derives from the fact that as folks get richer, own more property, hold more of a countries resources in their personal coffers, the society they live in becomes heavily striated. That striation becomes a use or be used social more and ends up with someone losing their freedoms. Examples: Jordan, Iraq, Serbia, the old USSR states, Germany prior to the end of the wars, and many of the South American states.
    I salute your independent nature, and that of your family, but some folks just aren’t able to do what you have. Are they supposed to pay for that lack more then they already have by supporting the rich get richer system we have?
    Understand this about me please, I don’t think the rich have a responsibility to bail out those that have no reason to be on the public dole, but you can’t tell me that Grandma needs to pay for the Rockefeller family’s continued success at her own detriment.
    I have fought for this country, your freedom, the freedom of people that have no direct connection to me and don’t know me from Adam. I will do it again if I must. That fight might end up being here in the states, in a political forum, to secure the basic necessities of life for those that are less fortunate than I am. Can we come to a compromise with the many things that are needed here? Yes. And it can be a good one too.
    On that note, I am done for now. Please! do discuss this more with me. I certainly do enjoy debating with educated folks about the issues. Also, prove me wrong in an assumption or ‘fact’ and I will apologize.
    Again, sorry for seemingly picking on you. Nothing personal. I guess I can be a bit inflammatory in my speeches. :)

  • Shiphrah

    Dear Tom,
    I respect you very much, so I was shocked to hear you use the term “banana republic” at the opening of this program. The term is demeaning to Latin America, especially Central America and the Caribbean. Just look at the opening of the Wikipedia article: “Banana republic is a term that refers to a politically unstable country dependent upon limited agriculture (e.g. bananas), and ruled by a small, self-elected, wealthy, and (but not necessarily) corrupt politico-economic clique.” It was first used to refer to Honduras, later to other countries. The retail stores that bear this name remind me of the restaurant chain “Sambo’s” which raised controversy in the 70′s because of its use of a name demeaning to African Americans. Perhaps someday we’ll be more aware of the history of Central America and our own country’s role in it, and then this term will be considered unacceptable.

  • Marty Tatro

    Here is an idea that might work for everyone.
    Start a new tax program in which you pay 100% of your income for the year into the tax network. At the end of the year you get it all back with an additional 2% interest payment. I wonder what the gross income for the system would be on a yearly basis if the government had trillions of dollars to invest and use for a year?
    An APR of 7%, for the GNI in the US for 2005-2008(?) (approximately $9,780,000,000,000) would be $684,600,000,000.
    I got those numbers from http://www.nationmaster.com/country/us-united-states/eco-economy so I am not sure if they are what I was really looking for or not, but they seem correct. All I am saying is that we have to figure out new ways to do things that make sense for today and tomorrow.

  • Tim from Louisville

    Our Government should not be determining how we distribute wealth in this great country. We should find a way to stop the ability of the wealthy to have undue influence on government policy.

  •  Beverly


    Lots of luck tonight. (We will be winning Friday’s jackpot, by the way.)

    Equally deluded . . .

  • Beverly


    Yikes, indeed!

  • Jim in Omaha

    Hey, Joe,

    Many recipients of high income (from capital gains, dividends, carried interest, certain bonds) actually pay a LOWER PERCENTAGE of their income in taxes than someone making $15/hour. How do you feel about that and what should be done about it?

    What’s you view on the fact that most of the gain in value that is passed in large estates has never been taxed. Should this gain be exempted from taxation?

  • Beverly


    With his typical histrionics, John Boehner called a bill which would extend tax cuts for the middle class, (but not for him), “chicken crap”.  (Could also be what’s between his ears.)

    He won’t be happy until we beg China for every penny he wants to give to the unfortunate wealthiest Americans, knowing full well that putting even the interest on our credit card will rapidly bankrupt the Country.

    Republicans, (at least in my lifetime), have never been interested in lowering deficits, balancing budgets, or the welfare of the majority of Americans. However, their propaganda continues to get them elected.

    Why does anyone swallow their chicken crap?

  • Forma

    Exactly how do we get some people quoting facts about how this tax will affect some people, and then others saying the complete opposite. Isn’t someone wrong? Has anyone actually read the bill? It is frustrating to hear politics these days as they are completely about sound bites, polarization, and against any real debate. Politicians seem to resemble children who scream “I’m going to get my way!”.

  • Beverly

    “Don’t Ask Don’t Tell” overturned? Is there a full moon tonight?

    WOW! What next, immigration reform? I don’t trust the Republicans as far as I can throw them. Wonder what they’ve got up their diabolical sleeve?

    Also in last news report, heard that John Deere will build their new plant IN CHINA! I, for one, will never buy another John Deere tractor . . . or lunchbox . . .

    How about you?

  • Mark S.

    I am going to start running my household budget like a modern-day Republican, as opposed to the relatively sane R’s of years gone by. Whenever I find that I do not have enough cash coming in to cover all of my obligations and commitments at the end of the month, I will remedy the situation by exploring ways to increase my obligations next month while arranging to reduce my income during the same period. Yes, that will make sense. And I will cut off my spouse’s allotment of food because I never should have been paying for that to begin with since she is capable of paying for her own damn food. Then I will pray to Ayn Rand for guidance…

  • Mark S.

    The Repugnant Party has placed this country on a trajectory that will lead it to disaster and serfdom so the Chinese, with ill-advised, unfunded wars, insane tax cuts intended to starve social safety nets out of existence (even the ones we Middle Classers have paid into all our lives, like Social Security) and a borderline psychotic obsession with serving the interests of the uber-rich, the banksters and the rest of the corporate oligarchy-plutocracy. Why they want to destroy America I have no idea, but when things really start to unravel it is going to get very, very ugly. People who are unemployed, hungry, broke after paying for promised benefits all of their lives that are now out of reach, and armed, are not likely to take this up the shorts forever.

    Much of what FDR did, from fireside chats to the dramatic recovery programs he pushed through, were in part to help dial down the temperature that some advisors warned might result in an insurrection brought about by 25 percent unemployment. Think it can’t happen? I hope you not, but we’ll see…

  • Sam Wilson

    @ MarK S 06:04 PM

    You made my day… :-)


  • John

    Dear Tom:

    I listened with interest to your program this morning. A timely topic to be sure, and one that goes to the core of self-interest in many instances. The balance between self interest and public interest is difficult to achieve.

    Assuming–rather than concluding–that an estate tax, in the sense of TR, is essential to the longer term strengths of our democratic and capitalistic society (as, BTW are notions of antitrust!), I am discouraged that the diologue seems to be focussed on a fly in the room rather than the elephant. Setting an exemption of $3.5 million or $5 million with a marginal rate of 35% or 45% is obscene in the sense that it is regressive to the upper end of the middle class. Accomplished lawyers and businessment who accumulate by death in expensive cities like Boston or New York a gross estate, inclduing the value of the residence, of $10 to even $20 million could hardly be considered plutocrats and the heirs, even without estate tax at all, are unlikely to indolent and non-contributing members of society. Indeed, some might even use the comfort of that endowment and their excellent educations to give back, as teachers or curators. More to the point, waht is truly obscene is the lack of any prgresivity–or even suggestion of prgressivity–in the rates as we approach the truste plutocrats. Those with hundreds, if not billions, of dollars. Those in the public discourse should take a good look at the last wave of progressvie estate tax rates which, BTW, even with the adjustments in the early sixties to marginal income tax rates, were also subject to very agressive income tax rates along the way. Those very large fortunes–cut by taxes at marginal income tax rates that exceeded 90% and by federal estate tax rates that were greater than 70% were so vast that they continued in many instances for three generations, and in some isolated instances, for four and even five generations. It seems to me that just about all of our elected officials have been bought by the new plutocrats–after all, they help fund the campaigns! So no one suggest a rate of even 50% or higher on estates greater than, say, $100 million, but we will talk all day about the $3.5 versus $5.0 amount which, in effect, attacks mostly those who really have made it the hard way.

  • Jonny Hamilton

    Jonny in Astoria NY-

    I’m not sure why we have to tax inheritances at all. They money was already taxed when it was earned in the first place.

  • Bush’s fault

    Tom and staff:

    Thanks for another hysterically funny day allowing failed Bolsheviks tell us what’s wrong with Obama and how they’re going to storm the palace gates.

  • Rachel Green

    The children of the wealthy are rarely or never motivated to achieve the way their parents did. Part of that disincentive is inheritance.

    In my work (as a divorce mediator) virtually ALL of the people in my office who inherited money, have not found their way in life. (alcoholics, unsuccessful artists who never work. . . ) The people who created the wealth are the parents – and their children need incentives to earn, be successful and go out into the world. That’s partly why Bill & Melinda Gates have given away so much of their wealth.

    Put back estate tax. $3.5 million is a huge compromise already! As a society, we want to award motivated creative producers. Not their lazy kids!

  • Kate

    Fort Greene Brooklyn.

    When did we become an economy instead of a society in America?

  • Eva in Boston

    That woman caller who insisted that it is people’s own money that the government wants to take away from them/her via an inheritance tax (which is levied only on states over $5Million) is so freaking clueless I felt like punching the radio when I heard her kvetch.

    The only way anybody can amass a fortune is because some other people in society get severely overcharged or otherwise exploited, and also because the government guards a system (legal, regulatory, taxation, public infrastructure) that makes that wealth concentration for the lucky few possible. In exchange for that, and to keep public order, the government has to tax.

    No, it’s not YOUR money,lady — it’s everyone else’s money that the government is letting you keep — and without taxing you would not have your money to begin with.

    That woman doesn’t understand that if the rich keep getting big tax breaks, and the super-wealthy keep sucking even more wealth by avoiding paying reasonable estate taxes, this country is going to hell in a hand basket. She may be able to keep or inherit more money — but she will be surrounded by misery and degradation, and she will be embarrassed to see her fellow Americans suffer. Selfish and short-sighted indeed.

  • BrettG

    Mr. Holtz-Eakin has done everything to destroy his credibility that he had @ CBO.

    To blame globalization for domestic policy mistakes dating back to Nixon including, but not limited to:

    Jarvis (Cal Prop 13 & 2 1/2, deregulation, lack of antitrust prosecution, lack of enforcement of needed regulations, repeal of Glass-Steagall, the confiscation of workers’ pensions by their employers for bad investments and/or employer debts in bankruptcy, the current disastrous effects of 80s/90s bad “reforms” of consumer bankruptcy, public assistance which, NAFTA, CAFTA, the S&L debacle & bailout prototype for the current economic disaster; all of which have been magnified by the disastrous policies of Greenspan, Bernanke, Geithner, TARP, HAMP & the open door that Goldman, et al. have @ the FED discount window currently + the $Ts that banks & corporations are hoarding @ their own risk + all the corporations that pay NO tax.

    Add to it the loss of tax income to states, the loss of home values, retirement/pension losses, etc./ added need for food stamps, other public assistance additional costs.

    & then there’s hi-frequency trading which limits & effectively prevents fair timely trades for small investors since approx. 300 companies (per WSJ) to not just dominate securities trading, but oligopolize it.

    Oh + the 2 wars that were not needed to respond to an act of terrorism, not war since Afghanistan as a nation did not attack us, Al Qaeda as a group did.

    + the lifetime medical, emotional care needed for veterans, 9/11 responders, volunteers & responders from outside NYC, Wichita KS, e.g. who assisted on the “pile.”

    Corporations & banks, crony capitalism & Soviet -style supply-side economics have proved their unworthiness of our trust as a nation and as individuals. Yet DC still seeks to reward those that helped to bring the crisis into existence & penalize the innocent.

    DOJ -calling you for Sherman probes.

  • christina

    I think asking what % or if estate/death tax is the wrong question. We need to look at what assets are being passed down. If they are stock to a family business or assets related to a family farm, they should be called in when that stock or assets are sold outside the family, not when a family member dies. The reason people oppose the tax is often because it will destroy family farms and small businesses if they are asked to pay large cash taxes on largely fixed (non-liquid) assets. In order to get the cash to pay those taxes they often have to sell a portion or all of the assets or the farm to get that money since the wealth they are inheriting is largely non-cash based. By deferring the tax on non-liquid assets such as family businesses or family farms, you address the stimulus of small business while still putting emphasis on redistribution of wealth generationally.

  • George

    Tom, please look at military spending by nation for another show. The U.S. is responsible for 40% of the world total in military spending! In contrast, no other nation on Earth is even over 5%! An order of magnitude difference. Do Americans have any idea what it is costing us to militarily safeguard the operations of those same multinational corporations that have largely outsourced jobs that formerly belonged to Americans. Our system is rigged for the uber-rich in more ways than we know.

  • Ralph

    Wow, Eva in Boston
    “No, it’s not YOUR money,lady — it’s everyone else’s money that the government is letting you keep — and without taxing you would not have your money to begin with.”
    I find this to be repugnant, classic Marxist rhetoric. Sadly, I suspect there are many misinformed people who have a similar belief. But I think we should lessen the concentration of wealth.

    Bill Gates and Warren Buffet are two examples of generous folks who will give away most of their fortunes, but virtually nothing will go to the US Treasury, because of their use of charitable trusts. In other words, they will decide how it is spent, not the US government.
    But again, I agree with Teddy R. that we should avoid large concentrations of wealth. I am a conservative, and I would rather the donors have some ability decide who their wealth is used, but to me that is a lesser issue.
    I would support a raising of the exemption to say $10 million, but then tax anything over that at say 55%, unless it goes to a qualified charitable Trust. I would also support a modification of the Estate Tax rules to minimize the use of other provisions the wealthy often use to get around the core intention of the Estate Tax, the lessening of wealth concentration.

  • joe caruso

    1) be very careful,

    taxes confiscate PRIVATE PROPERTY from its owner

    2) the line btw the rich and the rest of the populace is an artifical line drawn by undisciplined politicians who cannot control their spending.

    they will sooner or later move the line to include more taxpayers in their net when they need more funds.

    orlando, florida

  • Mark Morris

    I just finished reading all 160 + posts tonight, and not one person had a clue about what really put us all in this fix. The practice of waging war without raising taxes to pay for the increased expenses is the culprit. If we all, as voters, took away the ability of the President and Congress to put us into a war without first knowing where the money is coming from, the problem would go away.

    I hope I kept it simple enough for everyone to understand.

  • Joe

    The truth is we are back to when JP Morgan ran the country and people where just slaves. Thank you BUSH and you Puppeteer Cheney for selling out middle America so your buddies could get even richer. We now have a two tier economy just like Mexico. The rich and the poor!

  • gina

    Any rich person who wants to avoid the so-called death tax has 16 more days to avoid it entirely. — John at 10:11 AM

    Indeed; prospective heirs, take note. A little spiked eggnog for gramps before he descends the grand marble staircase could ensure an extra merry Xmas! ;-)

  • gina

    I just finished reading all 160 + posts tonight, and not one person had a clue about what really put us all in this fix. The practice of waging war without raising taxes to pay for the increased expenses is the culprit.

    Nobody mentioned it, Mark Morris, because the commenters here, from across the political spectrum, are smart enough to take that point as a given. (You might want to bring it up with some of the Republican congresspeople, though, who don’t seem to get it.)

  • John

    At least the old robber barons gave use useful things like the railroads. How useful have the recent financial services innovations been?

  • David2010

    I would like to make two observations:

    1. To the extent that an asset that has appreciated in value becomes subject to the estate tax, the built-in gain has never been subject to income taxation, not even at capital gains rates.

    2. A corollary to the estate tax is that assets with a built-in gain get a step up in cost basis to their fair market value at death or on an alternate valuation date six months later.

    There is no basis step-up for heirs and legatees of decedents dying this year because there is no estate tax this year. They have a “carryover” cost basis, the same as the decedent’s, for purposes of depreciating inherited business assets and determining gain or loss on the sale of inherited assets. Try to imagine the record-keeping and administrative nightmare that implies.

    The estate tax affects less than 1% of family farms. The loss of a basis step up at death affects 100% of them.

    No family farm has ever been shown to be sold on account of the estate tax. The burden of proof is on the proponents of repeal on that assertion until they can come up with one.

    I believe the “family farm” and “small business” assertions to be red herrings intended to obscure the true beneficiaries of estate tax repeal: The children of mega-multi-millionaires who do not choose to leave most of their wealth to charity.

  • Jane

    Let’s examine the facts in a logical, rational manner.

    Fact: The lowest estate tax rate is almost as high as the highest income tax rate of 39.6%. Moreover, the estate tax is imposed on earnings and assets that have ALREADY been subject to income, social security, and other taxes at the federal and state level.

    Fact: The estate tax amounts to less than 2% of total federal revenues while costing the government and taxpayers approximately the SAME amount collected for enforcement and compliance. (Joint Economic Committee Report, 1998)

  • Jane

    Larry, might be time to investigate some anger management programs…..

    “The super rich make their money raping and plundering the earth.

    They think their billions will protect their progeny forever.

    Think again you rich criminals.

    Your heirs will curse your name as the earth becomes more and more hostile to any life at all due to global warming and ecosystem collapse.”

  • jane

    David 2010….

    There are many stories of families having to “sell the family farm” to pay the outrageous death tax bill.


  • Richard Bell

    Where was the “outrage” by the democrats when the estate tax completely vanished for 2010! They certainly had the opportunity to shin the light on this pending tax increase as a republic increase (by expiration of a Bush era law) but really missed the boat. Even tough I do support Obama it may be best that the Democrats have to give up the reigns.

  • Jane

    I have an idea for a monument in our nation’s capital. I envision a big bronze and granite statue that would honor an entire group of Americans who are true heroes, and unsung heroes at that.

    It is time — no, make that long past time — to pay tribute to those this nation of ours owes a great debt; to those who give and give and give and in return get anything but our gratitude.

    This is an idea whose time has finally come.

    Right there, amongst the sacred national structures that honor great Americans, we need to build a shiny monument to … (this is where the drum roll would come in) The Rich – otherwise known in liberal circles as the filthy, no good, greedy, heartless rich.

    The statue could be simple and elegant: a smiling rich guy in a business suit holding hundred dollar bills in both hands, extended toward the blue sky.

    President Obama compromises with Republicans and gives the wealthiest two percent of Americans a temporary respite from a tax hike and listening to the yelps of the “progressives” you’d think he just tried to shut down WikiLeaks or something.

    The Left is bawling about how “we can’t afford” to give people “who don’t need it” a tax break. This argument makes perfect sense, of course – as long as income re-distribution is a central tenet in your theology. Never mind that liberals weren’t all that concerned about what we could afford when they passed a nearly trillion dollar stimulus package that didn’t stimulate very much or when they poured in billions of our tax dollars to bail out General Motors. It’s only now that they’re concerned about budgets because those nasty rich folks are getting a break. But I don’t want to pick a fight with my liberal friends over whether the wealthiest Americans “deserve” a tax break or not. I have come to praise The Rich, not to bury them.

    I offer a few numbers to make my case:

    Did you know that the top one percent of American wage earners (adjusted gross income) pay about 38 percent of all our federal personal taxes (according to the National Taxpayer Union)? The top one percent, by the way, account for 23.5 percent of all income — a substantial amount, yes, but considerably less than 38 percent.

    Or that the top five percent pay just under 60 percent?

    Or that the top ten percent pay about 70 percent of all the personal income taxes collected in this great land of ours?

    These “fat-cats” are the ones who do the heavy lifting in this country. They’re the ones whose federal tax dollars pick up a big chunk of the tab for all sorts of noble things, such as: food for folks who don’t have enough to eat … medicine and doctors for people with little money … financial aid to help other people’s kids go to college … milk and diapers for poor babies whose 15 year-old mothers and deadbeat fathers are too irresponsible to take care of their own kids … a safety net for old folks who are retired on fixed incomes … and on and on.

    And if they “only” bank their new found savings instead of spending it all over town? Well, that’s a plus too. It means there would be more money out there for businesses to borrow for expansion, which probably would mean more jobs. Or it could mean more money for new homeowners to borrow, which would also give a boost to the limp economy.

    No, I’m not saying the wealthiest Americans are all a bunch of selfless philanthropists. But try to imagine an America without those rich people.

    By the way, the bottom 50 percent of tax filers pay a paltry 2.7 percent of our federal income taxes. How many poor people do you think their tax dollars are taking care of? If you ask me, they’re the ones not paying their fair share. Every time they pass a “rich” person on the street, they ought to say, “Thank you for everything you do for me and for this country.”

    For those of you not already making plans to hang me in effigy – or for real – let me simply say this: The richest Americans may not “need” a break on their taxes, but they sure don’t need being vilified, either. They need our gratitude.

    So let’s get busy on that shiny monument in our nation’s capital. And let’s get some unemployed people out there building it. It’s the least they can do for those nice rich people who have been keeping them afloat.

    Author: Bernie Goldberg

  • ThresherK

    The Death Tax might sound like a good idea.

    *yawn* Another right-wing hack who can’t understand why his Fox-approved talking points don’t work, outside in the real world.

  • jane

    *snore* Another liberal who has no logic to his argument.

    “*yawn* Another right-wing hack who can’t understand why his Fox-approved talking points don’t work, outside in the real world.”

  • ThresherK

    Jane, please educate us with more long-winded tracts from Bernard Goldberg. It beats having to explain your misconstuctions in your own words.

    Those of us who don’t know any better will stick with our Paul Krugman, Brad DeLong and William Greider.

  • Jim in Omaha


    The “examples” you cite would more accurately represent people facing a “stupidity tax”. Any competent financial planner would enable them to reach their goals with minimal cost.

    More basically, why do you think these people should be allowed to avoid ever being taxed on the gain you refer to? Someone who has created an estate from wages has actually been taxed on their gain. The examples you cite of family businesses, farms, have not. Take a look at David 2010 at 9:45 for an explanation.

  • jane


    Happy to help!

    I’d love to hear what fallacies you believe I’ve purported….

  • Jane


    “Any competent financial planner would enable them to reach their goals with minimal cost.” That’s a huge, unfounded generalization. What data do you have to back up such a claim?

    It’s true. I don’t believe that people should have to pay a death tax on gain …Logically put, after a lifetime of work they should not have to pay another tax on assets that have already been taxed at least twice before at a 55% rate – the highest rate in our tax system.

    Furthermore, the definition of wealth is subjective. And I have a huge problem with implicit suggestion that a death tax justifies income redistribution.

  • Jim in Omaha

    Jane says:

    “It’s true. I don’t believe that people should have to pay a death tax on gain …Logically put, after a lifetime of work they should not have to pay another tax on assets that have already been taxed at least twice before at a 55% rate – the highest rate in our tax system. ”

    This is, in our fact-based world, what would be referred to as completely inaccurate. But of course that means nothing to someone so profoundly proud of their ignorance.

  • Rob in Seattle

    The best argument for an inheritance tax is to discourage the funding of professional liars like Douglas Holtz-Eakin. Discouraging capital formation? Anyone who has ever worked for a second-generation company knows true discouragement. Raise your hand if you want to work for Oracle after it’s turned over to Larry Ellison’s heirs.

    35% above $5 million sounds fair, but only after we’ve caught up for the last 30 years of wealth concentration. Let’s make it 50% until the federal deficit is balanced.

  • geffe

    The whole estate tax argument is kind of silly.
    Most people of wealth can give their heirs 3.5 million per parent now untaxed, that’s a lot of loot if you ask me. If you set up a trust nothing gets taxed. This is just typical BS that Republicans use to avoid the real issues.

    They are nothing more than hypocrites when it comes to the deficit and spending. Lets not forget who created the lions share of the current fiscal problems this nation is in. The worst of it is that the Republicans wont even deal with the health care disaster that is going to crush this nation if we don’t deal with it.

  • Jacob

    It appears the estate tax will be raised to 35 percent which is too high, but a battle that can be fought next year to lower or eliminate it.

  • DAVE

    America has been hoodwinked(Well, not all of us)! The true colors of the Republicans shine through once again. They are not for decreasing the deficit. They are phonies. Tax cut for the wealthiest, and oh yea, let’s lower that estate tax. Those poor billionaires need a little more spending money. WE know the truth Mr. McConnell. WE know the truth Mr. Boehner. You will be in power but we know the truth!! Charlatans!!!

  • Matt Harris

    Once again, our Federal Government fails to do anything that requires courage and responsibility. I don’t want to pay higher taxes either, but this tax Bill only adds to our debt/deficit and only provides a “sugar high” to the economy.

  • John

    I have never concerned myself with how much money another person makes and if the death tax is eliminated I don’t really care much about that issue. I do care about the massive unchecked spending and don’t see much changed during the past two years.

  • Brad

    To build on David2010 and Ken’s comments:

    I do not see the estate tax a death tax or double tax. It seems to me very similar to other simplification elements of the tax process. A reasonable estate tax is an alternative to the painful process of tracking cost basis across generations. In fact, I think it would be great to offer taxpayers a choice of either:
    a) No estate tax and no step-up in basis, or
    b) An exemption/estate tax that resets the basis and cleans up the process

    My grandmother bought some stocks in blue chip utilities and communication companies many decades ago. Because of deregulation, break-ups, mergers and acquisitions, her estate ended up with shares in many (much smaller) companies. Trying to calculate an accurate cost basis for these would have been nearly impossible.

    This choice could work similarly to other tax options like the standard deduction and mileage rates vs. actual vehicle expenses. If you have detailed records and prefer using actuals, knock yourself out. Most people could probably fair better using an exemption/reset approach.

    Some people might decide to hold on to assets and avoid paying tax. However, conditions change and it is often better to switch investments vs. letting tax policy dictate investment strategies. Taxes may be deferred, but they will be paid eventually. I would rather pay a reasonable tax up front and then have the flexibility to shift assets with a new basis.

    The question becomes “what’s a reasonable estate exemption/tax rate”? Offering a choice should also have a moderating effect on these levels. This level should be based on an analysis of the impact to taxpayers, administrative costs, and overall tax revenues, not on political trade-offs. I assume (hopefully!) that a similar process is used to set the standard deduction, mileage rates, etc.

    Brad in Santa Cruz, CA

  • Dan N

    Again, working people calling in and fighting against their own self interest. “One day when I am a billionaire I deserve to do what I want with that money!” The guests failed to mention to these people that they did not make that money alone! It was society that allowed them to achieve wealth! In other words, those billions that you claim are “yours”, are partly society’s billions also.

    Dan in Hudson, NY

  • L Armond

    Quid pro Quo? or however you say it. In Virginia, the funds from an estate are held in escrow on which no interest is paid? Can anyone research this? They don’t keep legislative history in Good ol’ Virginia, but I wonder if the funds generated in the banks can partially kickbacked in the form of business and legal seminars at the Greenbriar? Just askin’ Longfeather

Sep 3, 2014
This still image from an undated video released by Islamic State militants on Tuesday, Aug. 19, 2014, purports to show journalist Steven Sotloff being held by the militant group. The Islamic State group has threatened to kill Sotloff if the United States doesn't stop its strikes against them in Iraq. Video released Tuesday, Sept. 02, 2014, purports to show Sotloff's murder by the same rebel group. (AP)

Another beheading claim and ISIS’s use of social media in its grab for power.

Sep 3, 2014
In this Fall 2013 photo provided by the University of Idaho, students in the University of Idaho’s first Semester in the Wild program take a class in the Frank Church-River Of No Return Wilderness, Idaho. (AP)

MacArthur “genius” Ruth DeFries looks at humanity’s long, deep integration with nature – and what comes next. She’s hopeful.

Sep 2, 2014
Confederate spymaster Rose O'Neal Greenhow, pictured with her daughter "Little" Rose in Washington, D.C.'s Old Capitol Prison in 1862. (Wikimedia / Creative Commons)

True stories of daring women during the Civil War. Best-selling author Karen Abbott shares their exploits in a new book: “Liar, Temptress, Soldier, Spy.”

Sep 2, 2014
U.S. Sen. Mitch McConnell, R-Ky., talks with Mark Wilson, event political speaker chairperson, with his wife Elain Chao, former U.S. Secretary of Labor, at the annual Fancy Farm Picnic in Fancy Farm, Ky., Saturday, August 4, 2012. (AP)

Nine weeks counting now to the midterm elections. We’ll look at the key races and the stakes.

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