Wednesday, January 5, 2011

Selling Walton's Mountain.......The Return of the Death Tax

It's baaaaaaaaaack!

As of January 1, the death tax is once again the law of the land. Even Whoopi Goldberg is mad and weirdly enough, I agree with her.

The Death Tax taxes property that the dead guy has already paid taxes on.

The new tax takes 35% of everything on any estate worth more than five million dollars. Most profitable family farms are worth more than that.  Thirty five percent is a crippling hit on a business that depends for profitability on having paid off the land that your great granddaddy homesteaded 120 years ago. The cost of the death tax is like forcing the family agri-business to buy back more than a third of its land every time a grandpa dies.

It's not just the taxes.  Just filing the required tax report to pay the death tax can easily cost $25,000 or more and produces a stack of paperwork almost a foot deep that you have to hire federal bureaucrats to read and review so....... 

Tax accounts preparing the tax forms are expensive. With the taxes, preparation fees, attorney fees, loan fees and interest, the business generally has to borrow money to pay the taxes.

The cost to collect the tax can be a hefty 60% of the tax actually collected. In some cases the costs to the government actually add up to more than the taxes collected.

 It doesn't take much to make a business worth five million dollars and it doesn't take much of a sudden financial hit to bring down such a business, putting employers and owners out of work and ending the company's ability to pay any more taxes. (Does no one read the story about the goose that laid the golden eggs?).

Bear in mind that the family business also gets absolutely nothing for an expenditure of millions of dollars. Imagine the Walton's having to pay 35-50% of the value of Walton's Mountain when Grandpa died.  Do you figure John and Olivia could have kept the family lumber business going if the fed made them suddenly shell out more than 1.75 million bucks (assuming the mountain and the sawmill and house was worth only five million)?

The death tax is definitely a wealth killer which should make Democrats very happy. It's also a job killer, a tax-payer killer and an economy killer. Wonder if that makes them happy too?

Do the the people who came up with this idea despise "the wealthy so much that they don't care about the consequences of this turkey.

The whole death tax thing works out to be downright unfair to working families. Whoopi Goldberg is a lot like a family business. It's a business that supports Whoopi, her kid, her agent, her business manager, and and an assistant or so at the very least. She dies and more than half of it gets eaten up to pay the tax bill, which may be why Whoopi is mad about it and popped off at Joy Behar the other day on TV.  I think she's planning to leave some money behind for her daughter Alexandrea. Funny how having a kid, that you actually love, can make a conservative out of you  - at least where your kid is concerned.

Just one man's opinion.

Tom King

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