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Extending the Bush tax cuts

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See more from the Telnaes print archives and buy reprints.

Copyright: Ann Telnaes | Original published date: 9/5/2003.

By Ann Telnaes  |  July 26, 2010; 12:00 AM ET
Categories:  Economy and jobs  
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Comments

flonzy-

So your entire argument is based on how much money "rich" is? For that you denigrate liberals and Democrats? Even after you point out there are Democrats who are willing to readjust the amounts?

Pathetic.

So by your reasoning, if the Estate Tax exemption limit was raised and adjusted for inflation you would agree with me?

Double Pathetic.

Do you in any way think that our tax policies should prevent a de facto royalty made via inheritance? If so, say so. Don't wrap your arguments around the definition of "middle class".

BTW, your personal insults ("jealous", "tiny mind", etc) aren't appreciated. It just makes me think you are a troll for the GOP.

Posted by: egc52556 | August 1, 2010 9:37 AM | Report abuse

BTW you said 1.8% of the people dieing today are paying that tax; funny only 1% or less of Americans are considered rich and as stated much of the super wealthy avoid this tax.

Only 2% of wage earners make over the Obama $250k cut off on taxes and only the top 1% make $500k or more.

It is also important to note that congress did a study on if the estate tax effects people saving; the pro death tax folks say it is unclear though many people polled clearly said yes they feel free to spend more and save less as they don't want their earnings to take a second tax; according to cbpp.org

The cbpp.org also argued that the amount of farmers and small businesses affect are too small to worry about; but that is not who this tax is after it is meant for the Heinz's, Rockfeller's, and Trumps of the world.

Even democrats have looked to reform the bill allowing transfer to spouses to be tax free up to 3.5 million dollars. Also they want to up the tax to 65% for billionaires. Now this is goo critical thinking acknowledging that a million dollars is not uncommon in the modern reality unlike 50 years ago. It is not that the tax should not exist it is just time for the estate tax and the AMT to get a much needed adjustment for inflation.

Posted by: flonzy1 | July 30, 2010 10:03 AM | Report abuse

egc52556

Apparently you don't understand what rich is, millions of people in America have over a million in assets and most are not called rich they are working class middle income earners who plan wisely. They earned it over a life time not a year; people earning that in a year are rich. Are you saying my grandfather in law was rich because he saved that much working his butt off for 50 years as a farmer living in a tiny house and only owning 6 cars in his life time?

Recently the AP did a story on who is really rich and class warfare in America and local inflation. Fact is most upper middle class wage earners live in high inflation areas and it takes that money to live a middle class lifestyle of one home, two kids, and two cars.

In the Washington DC area you are not called rich unless you make $400k a year as a single person or $650K a year as a family.
Loudoun counties median income is $110k and that is no where near the rich mark with inflation taken into account. These people still have to have a full time job until 65 in order to save for retirement.

BTW financial advisers are telling people in their 30s that if they want to live comfortable they need 3 million to retire on when they reach their 60s; that is in 30 years.

Will the death tax adjust for inflation? I doubt it the AMT has only lowered despite inflation in 40 years. That law was written in 1965 and aimed at the top 1% or wage earners making $200k in 1970 went he average salary was $9200. Today the average is $52,000 and the AMT is set at $165,000 and catches up to 12% of American wage earners in a give year, that was not the intent of the law in 1970. People making $165,000 today are not rich they are on the middle range of upper middle class ($100k-$250k)


But you seem to think anyone doing better than you is rich and should be forced to pay out the nose so they cannot live better than you, jealousy is a sad sad way of living.

I am sure I am not changing your tiny mind that cannot perceive the big picture and how this encourages reckless spending by the middle class which will result in generations of the elderly having no retirement to live on and require even more tax money for the government to help them. It is a ponzy scheme that is already hurting us badly with social security running our of funds.

Posted by: flonzy1 | July 30, 2010 9:25 AM | Report abuse

flonzy1 -- I really don't get why you see 1.8% as an attack on the middle class? Who cares what work people did during their lifetime (teacher, etc) when in the end they are a tiny rich -- yes, rich -- minority who are whining -- yes, whining -- that the unrealized gains are finally being taxed?

I've backed up my arguments with the best data I can find. But you say it isn't worth jack. I've nothing more to say, because you apparently have made up your mind and don't want to be confused by the facts.

Posted by: egc52556 | July 29, 2010 4:02 PM | Report abuse

egc52556

Your statistics don't prove jack; in 2004 only 1.5% of house holds in America even had savings. Your numbers only go with people with save but say nothing about class. Just because some people have no insight into savings does not mean I me or my family should be punished for doing so.

Did you know that statistically the lower middle class are the most hard core savers in America?

Did you even read my point that most millionaires in America are working class people who saved for retirement? Teachers being the #1 job, construction owners #2. People that worked their whole life and saved instead of moving 5 times into larger and larger homes and buying useless sports cars.

Again billionaires turn their inheritance into trusts that avoid these taxes, your numbers say nothing about who paid the tax only how many people did.


Also you are wrong that if I got 1.6 million today I could retire is false. My retirement funds are for the last 20-40 years on my retired life when my home is paid off, my home is not paid off and if I used some of that money to pay said home off I don't have my goal savings plus I am adding 25 years or more onto my retirement.

You also assume sole inheritance not considering other family members.

Also you seem to suffer from some sort of jealousy of people who plan prudently to leave family money to get a leg up in life. You seem to say if you can save money instead of wasting it on material goods of no real value you are somehow bad because you amassed your money instead of blowing it on crap.

You also don't seem to understand the definition of rich vs comfortable living. What I am talking about is a comfortable living, saving for a rainy day and slowly building wealth over 40 years of working in this lifetime. Rich, the upper class in America, are only 1% of our wage earners they earn $1,000,000 and above a year, not over a life time and including the investment of owning a home.

Too many people define rich as being anyone who make more than they do. I may not live pay check to pay check but that is because I bother to save my money instead of buying an useless sports car. There are people all over this country that make 1/4th the money I do and spend double the money on one vehicle than I did on both the vehicles in my household. They look at my home and call me rich, I look at their car and shake my head at the stupid waste of money but somehow in your mind egc52556 I am the villain for bother to save for the future. God Americans are so damn backwards some days.

Thing is I know how to set up a trust I feel sorry for the WWII generation still hanging around who don't know these things and their families will be screwed by it one day.

Posted by: flonzy1 | July 29, 2010 8:25 AM | Report abuse

Some actual data, from the IRS. See http://www.irs.gov/taxstats/indtaxstats/article/0,,id=96442,00.html and http://www.irs.gov/pub/irs-soi/04esreturnbul.pdf

The data is from 2004, the last year the IRS has complete stats for:

[QUOTE]
In 2004, an estimated 42,239 individuals died with gross estates above the estate tax exemption amount of $1.5 million. These decedents represented 0.02 percent of the adult population of the United States, and their deaths represented about 1.8 percent of all adult deaths occurring in that year.
[/QUOTE]

Me again: If only 1.8% of decedents are affected by the tax, that can't by any definition be the normal middle class experience. The Estate Tax just doesn't impact many people outside of the wealthy.

Let's look at your own situation, using the numbers you've provided. Most of your estate will be in your house and 401(k). (BTW, these are unrealized gains whose value won't have been taxed before your demise. So much for the "double taxation" argument.)

Let's assume your house value at death is what you hope: $1.2M + $0.8M (complete guess) in other assets -- a rounded-off guess of a total estate of $2M. Your heirs will have to pay tax on the 2nd million: estimated tax is $345,800 (again see http://en.wikipedia.org/wiki/Estate_tax_in_the_United_States).

So you heirs will get $1,654,200 after taxes. Not a bad haul considering they've done absolutely nothing to earn it except have the good fortune of being your heirs.

Good fortune (and good planning) to you too! You're among the elite 1.8% group of citizens.

Now instead let's imagine that YOU received $1.6M tax free today, assuming the unfortunate event that your parents died today :-( By your accounting you could retire now, because along with your current house and 401(k) value you'd have already accumulated the $2M you hope to have at retirement. Or feel free to continue to work and follow your original plan. If all goes according to plan, you'll now be able to pass on to your heirs not $2M, but $2M + $1.6M (plus interest) -- maybe $4M (minus Estate Tax).

This is NOT the normal middle class experience. 98.2% of normal people don't pay any estate tax at all.

But maybe those 98.2% know something you don't: how to pass on the value of their assets BEFORE they die.

Peace.

Posted by: egc52556 | July 29, 2010 6:08 AM | Report abuse

egc52556 wrote: And not to be too personal, but if you pass on $1,000,000 tax free, you are NOT in the middle class.

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Again I have to call BS. Ever read the millionaire next door? Do you know what the most common job of millionaires in America is? Teaching. They may make middle of the road income but teachers also use incentives, tax breaks, pensions, home buying, and savings to save for retirement and many have over a million in assets when they are ready to retire and that is a book written in the 90s.

My father, and my in-laws both have more than a million in assets, my father labored installing phone line his whole life and my father in law worked for John Deer. Again owning a home and having a retirement plan makes a million easy over a life time.

Recently there was an article about the WWII generation who grew up in the depression era; as they pass the largest wealth transfer in America in the history of the world is taking place. Many of the generation, like my before mentioned wife's grandfather, saved for their whole life and owned their homes; the average estate has been worth 1.4 million, some way less and some way more.

My wife and I earn in the upper middle class range with our double income, our home is currently worth $600k and will be paid for when we reach 45 and likely by then our home value will double if the last 150 years of home value increases hold true. That means the asset of our home will be over a million dollars. We save aggressively and use our 401ks to the max, quick books estimates we will have between 3-5 million in assets over the next 25 years depending on market growth off our modest investments.

The laws need to change to stop acting if the middle and upper middle class who do not spend every dime they get on useless crap are somehow doing something bad that needs punishing through massive taxes.

People are preaching personal responsibility and savings in the modern market and then bemoan lack of spending and cry about those of us who are wise with money and label us all as rich. If I were rich I could retire and jet set, I have to labor at my job for another 25 years just to retire without worry, if my sound investing pays off and I don't use it all why shouldn't it go to my family instead of the government? I already paid taxes on my income and investments on the front end.

Posted by: flonzy1 | July 28, 2010 7:52 AM | Report abuse

_


flonzy1 -- I believe you don't understand the upcoming 2011 Estate Tax law. My understanding is the first million is exempt / untaxed. So you'll pass that on tax free. For the amounts above that, the tax rate rises incrementally until it tops out at 55%. Too much of this conversation keeps claiming that middle class will be taxed at 55%. They're not.

And not to be too personal, but if you pass on $1,000,000 tax free, you are NOT in the middle class.

See: http://en.wikipedia.org/wiki/Estate_tax_in_the_United_States


_


Posted by: egc52556 | July 27, 2010 11:15 PM | Report abuse

This pathetic attempt to disparage the "rich" could just as easily illustrate the typical black family in the ghetto with a Lexus SUV or BMW (or both) parked in front of their Section 8 subsidized home containing large flat-screen TVs, every Playstation known to man, fully-stocked refrigerator thanks to food stamps, pleading for more gubmint assistance.

Posted by: realist2 | July 27, 2010 10:54 AM | Report abuse

egc52556

That is nice for billionaires but what about the working middle class who buy houses and have retirement funds? What if they want to leave a little to their children to pay for the grand kids education and further their families? We are talking about people with mortgages and debts.

A million is easy today, hell my house is worth $600k and I have savings, bonds, IRAs, and a 401K and the like for when I retire but what if my life is cut short? My family needs to live down an income, who will pay for my kids college education or who will help my mother who does not have savings or a paid for house?

Why not up the tax to five million? Fact is most middle class people retiring today are over a million and they predict people in their 30s need 3 million in assets to retire on; that is the middle class not rich people. They will have to work their whole life to save that to take care of their needs and their kids needs; why should they be punished?

If it is about the rich then adjust the levels for inflation and stop hurting the middle class.

Posted by: flonzy1 | July 27, 2010 8:43 AM | Report abuse

.

Another PS: http://sivers.org/trust -- how one millionaire used his wealth while still alive and avoided the entire Estate Tax issue.

.

Posted by: egc52556 | July 27, 2010 8:13 AM | Report abuse

Airborne82

I think what is funny is how liberals argue these tax cuts for the rich, which are also tax cuts to the middle class and mean more to the middle class who pay a higher percentage of earnings as taxes, are bad because they cost billions in revenue a year.

Yet liberals ignore GDP growth the tax cuts spurred which brought even more money in as taxes. Bush's failure was not growing government revenue with tax cuts, that worked, he spent way too much. Tax revenue was at it highest in 2007 before the housing crash despite all the cuts.

Then there is hypocrisy of the liberals on money. They say why adopt tort reform in health care like the rest of the world, it will only save 10-20 billion dollars a year.

Why get rid of pork it is only 17 billion a year, yes Republicans take pork too.

Sure at face value the tax cuts lose x amount a year, they also grew GDP by y amount and created new tax revenue which no class warfare pusher ever wants to admit.


If it was really about the rich then why is the middle class getting nailed with higher tax brackets. Why isn't the death tax or the AMT being adjusted for inflation so the middle class don't pay them?

Posted by: flonzy1 | July 27, 2010 8:10 AM | Report abuse

.

Forgot to mention: my grandfather used to say that good estate planning means the check to the undertaker bounces.

.

Posted by: egc52556 | July 27, 2010 8:04 AM | Report abuse

.

Re: Estate tax is double taxation -- The person who died isn't paying the tax. He's dead. It's the people who inherit who are paying the tax. That is, they are receiving less UNEARNED money than they otherwise would have.

Re: Just want to help your family -- Fine. Help them while you are alive instead of accumulating > $1000000 of wealth in assets that you don't need (apparently, since you died with them intact).

Re: It's easy to put money in trusts and only idiots would actually leave an estate of $1000000 -- Fine. So why are we having this argument?

Re: Why should the "government" get it? The "government" is the institution we have that (supposedly) represents all the people in America. We can argue about how (in)efficient the government is, but still most of the bucks pass through the government to the other people living in America. (Or in many cases, pass through bombs to people formerly alive in other countries. -- Sorry, my pacifist is showing. :-)

Re: Only the lazy benefit -- This seems ignorant and insulting. But since you bring it up: which lazy group are you referring to? The heirs who apparently don't have a pair and are relying on the deceased's wealth? Whining when they get only 45% of the millionaire's excess?

Re: Preventing royalty-like oligarchy -- My original point. Despite the GOP'ers belief that unrestrained capitalism is a self-evident truth, it is not. As smt123 pointed out, we don't live in a vacuum. We live in a society that receives mutual benefit from each other's lives. A perpetual, inherited, uber-wealthy, virtual royalty class undermines this basic attribute of American life. Read John Rawls and the "veil of ignorance". We are continual balancing freedom VS equality. The Estate tax helps keep this balance.

Finally -- As an alternative to the Estate tax, we could always tax the living at a higher rate. Say, up to 70% for the billionaires?

Posted by: egc52556 | July 27, 2010 8:00 AM | Report abuse

America needs a minimum tax rate of 15% for all businesses and individuals after all deductions. Allow all deductions but only credit up to a mandatory 15% tax rate.

The Struggle for the Victims of Bush and Cheney’s bungled mismanagement and gutting of regulatory agencies that caused the loss of Millions of Jobs, Homes and Businesses continues. Here is “GOP Socialism for the Rich” that the USA should eliminate to pay for JOBS over the next decade:

“What’s another $678 Billion?” GOP has no problem extending tax cuts for the rich
http://www.washingtonpost.com/wp-dyn/content/article/2010/07/13/AR2010071305391.html
“SENATE REPUBLICANS,… are untroubled by the notion of digging the hole $678 billion deeper by extending President Bush's tax cuts for the wealthiest of Americans.”

http://www.washingtonpost.com/wp-dyn/content/article/2010/06/26/AR2010062600222.html
“The Bush tax cuts are really expensive. The tax cuts expire this year. If lawmakers renew all of them, they'd add $6 trillion to the deficit from 2012 to 2022.”

Estate Taxes and the USA deficit:
http://voices.washingtonpost.com/ezra-klein/2010/07/research_desk_compares_whats_t.html#more
The current Estate Tax giveaway to the Rich is costing the USA $300~700 Billion between 2009 and 2018.

Massey Energy, owner of the Upper Big Branch mine where 29 West Virginia miners were killed, paid an average of 5.6 percent of its profits in federal income taxes over the last three years, despite large profits (1/6th of federal 35% rate).
http://www.wvpolicy.org/downloads/news_releases/NR041510.pdf

Oil Companies make Hundreds of Billions every year and pay very little in Taxes. Forbes magazine reported/exposed Exxon Mobil made a record $45.2 billion profit, but paid "$0.00" in USA federal taxes in 2009. At @ a 35% corporate tax rate that's $15.8 billion in Public Taxpayer subsidies given to Exxon in 2009 alone. Over 10 years that runs to $150 Billion in taxpayer subsidies. Now that's a sweet deal making Big Oil the Kings of Subsidies.

Those are all some Sweet Sweet Sweet Tax Breaks. Those Taxes Should Be Raised, Loopholes eliminated, and the Money used to Create USA Jobs and Industries that Manufacture product that can be sold.

America needs a minimum tax rate of 15% for all businesses and individuals after all deductions. Allow all deductions but only credit up to a mandatory 15% tax rate.
Bush era Tax Cuts from top to bottom should end. Hit 'Reset' until America can bring its Men and Women home from the Middle East. Until then, its all Americans civic duty to create the Jobs needed now, and the jobs veterans will need when they return.

Posted by: Airborne82 | July 26, 2010 7:21 PM | Report abuse

jmr862003 wrote: The estates tax only affects estates worth valued at OVER $1,000,000.00, so stop with the "death tax" lies.

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Which means if you own a home and have retirement savings in the form of 401k, IRA, or a pension you likely have a million in assets.

My wife's granddad was a farmer, the highest yearly income he ever got was $30,000 in the late 90s; he was retired for 20 years and his wife was in a home for her last two years at $6000 a month and he still had over a million in assets when he did. He was not even the middle of middle class he was a poor farmer and if he had lasted another year his estate would have been dinged. This tax will effect anyone who owns property and saves for retirement. Anyone with quick books or two brain cells and can add knows this.

Posted by: flonzy1 | July 26, 2010 3:32 PM | Report abuse

If it means that my friends and relatives seeking work have a better shot at getting it, then extend the tax cuts.

Listening to informed people, such as Economists, leads me to believe, exactly, that extending the cuts will result in faster economic growth.

BTW, I read Telnaes only to see what the ignorazzi are trying to float as legitmate ideas.

Let's hear from someone with both an economic IQ and a dire need of employment shout objections to tax cut extentions.

Posted by: primegrop | July 26, 2010 3:06 PM | Report abuse

Posted by: SCOTSGUARDS

"Contrary to the cartoon's erroneous method, a tax cut to a small business owner, [and to big businesses also], is that which precedes satisfying the need of the guy on the left side of the cartoon panel, freeing money the business owner can invest in growing his business, which requires hiring more workers.

[and to Big Business also] ?
*****************************************

Please don't falsely revise actual history.

The two LARGEST causes of the Huge Deficit were the unpaid for Bush Tax Cuts for the wealthiest Americans and the Iraq war, for his ego building.
Also, GOP Deregulation was the PRIME cause of our current financial Depression!

The Cartoon is RIGHT ON . . . as usual!

Posted by: lufrank1 | July 26, 2010 3:00 PM | Report abuse

The estates tax only affects estates worth valued at OVER $1,000,000.00, so stop with the "death tax" lies.

Posted by: jmr862003 | July 26, 2010 2:52 PM | Report abuse

3) Taxes are part of modern civilized life, get used to it. You do not live in a vacuum.

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Where did I say there should be no taxes? I pay taxes on my income, point is what gives the government the right to tax again my earnings on my death?

If it was not for a trust more than 70% of my life's earnings would go to the government because I pay 1/3rd as taxes as I earn it and then the other 2/3rds are taxes at 55% on my death. That is too high, it also leaves no instinctive to saving money. I don't earn to give it to the government I earn for my family.

Also I find it wrong that the educated middle class and upper class know how to avoid this while the lower class gets hit up by the system. It keeps the poor poorer and allows the well of to prosper.

Posted by: flonzy1 | July 26, 2010 1:53 PM | Report abuse

As to name calling; I didn't infer anyone is not a patriot based on a political belief as you did smt123. You infer not supporting the death tax is unpatriotic in your post.

People who want to hammer their views through without debate try to falsely label things as patriotism.

Posted by: flonzy1 | July 26, 2010 1:47 PM | Report abuse

chug4fun1 and flonzy1

1) No, I did not support Bush in any way nor the invasion of Iraq.

2) I have plenty of ambition, I have my own business and have never taken any hand out ever in my life, either from the government or from my family.

3) Taxes are part of modern civilized life, get used to it. You do not live in a vacuum.

4) I have a big pair.

Posted by: smt123 | July 26, 2010 1:47 PM | Report abuse

OK, here we go, it's devolving into name calling...

If you think the use of "patriotic" is a sign if a week argument, what do you think the use of the word "fascist" is?

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So then you blindly supported Bush, the wars, as well as these taxes then? Because all of those are "patriotic" to support.

I consider it "patriotic" to question why more that half my life's savings should be forfeit to the government on my death instead of being used to get my family ahead in life. Taxes have been paid on those assets already.

Posted by: flonzy1 | July 26, 2010 1:39 PM | Report abuse

OUTRAGEOUS.. Do any of you proletariat death tax advocates have any ambition in life? Why not grow a pair, stake your claim and make your own legacy. The death tax will only effect working class savers. Old money elites WILL PAY NOTHING as they funnel assets and US WEALTH into trusts and FOREIGN INVESTMENT. Death taxers are so naive.

Posted by: chug4fun1 | July 26, 2010 1:29 PM | Report abuse

OK, here we go, it's devolving into name calling...

If you think the use of "patriotic" is a sign if a week argument, what do you think the use of the word "fascist" is?

Posted by: smt123 | July 26, 2010 12:56 PM | Report abuse

Sure, we can debate how much this should be, but I think it's fair to give something back when you die. It's patriotic after all.

--------------------------------------------------------------------------------------------------

You act like I didn't already pay taxes on my earnings.

Playing the patriotic game is the sign of a weak argument no matter which side of politics you fall on. War and taxes and the necessity of them are legitimate debate that should not be stifled which a fascist use of the patriotism label.

Posted by: flonzy1 | July 26, 2010 12:36 PM | Report abuse

Yes, we can debate the details of the tax code, yes some changes would be good, and yes there is a difference between inheritance tax and estate tax, but I think that if society inherits a little of what people leave behind it makes for a better place to live for everyone.
Sure, we can debate how much this should be, but I think it's fair to give something back when you die. It's patriotic after all.

Posted by: smt123 | July 26, 2010 12:28 PM | Report abuse

smt123

As Joy5 points out I have paid taxes on my income already what gives the government the right to tax my estate?

You also ignored my points abut how the wealthy and well educated get out of this tax.

I will not pay 55% on my death anymore than Obama or Bush will because I have set up a trust however why is it even necessary?

People always quote a million like it is a major number, it might be on a one year gain but it is common place for assets to equal a million dollars today. These laws never get revised to meet modern economics; the AMT is another prime example it was never meant for the middle class wage earner only the upper income bracket, $250k in 1970 was 1% of wage earners; now the AMT is lower and affects 10% of wage earners.

Tax codes need a serious overhaul in America.

Posted by: flonzy1 | July 26, 2010 12:09 PM | Report abuse

Good animation Ann
It is time that people realize that it is the working people that support the government, big business, small business and everything else that keeps our society functional. It is a symbiotic relationship.
Dave

Posted by: OchamsRazor | July 26, 2010 11:35 AM | Report abuse

SMT123 didn't answer the question. What has been taxed once shouldn't be taxed again.

It's not a matter of extending the Bush-era tax cuts, it's a matter of not raising taxes, period.

Throw the rascals out this November. Mikulski has gotta go.

Posted by: joy5 | July 26, 2010 11:34 AM | Report abuse

flonzy1 wrote:

"What give the government any right to my assets when I die?"

It's because we live in a society, not some imaginary anarchy. Whatever money a businessman makes it's possible because there is a government there to print money, to pay for police to protect private property, to pay for a legal system that defends contracts, to pay for highways for your trucks. All this money has to come from somewhere.
Our government provides all this and yet people STILL complain.
If you don't like everything a modern government gives you maybe go try living in Somalia.

Posted by: smt123 | July 26, 2010 11:14 AM | Report abuse

Scotsguards

Don't know if you know but they ARE cutting taxes for small businesses.

Posted by: smt123 | July 26, 2010 11:07 AM | Report abuse

Contrary to the cartoon's erroneous method, a tax cut to a small business owner, and to big businesses also, is that which precedes satisfying the need of the guy on the left side of the cartoon panel, freeing money the business owner can invest in growing his business, which requires hiring more workers.

Posted by: SCOTSGUARDS | July 26, 2010 10:54 AM | Report abuse

Once taxes are paid on income at the time it is earned (income tax, Social Security withholding, county tax, city tax, state tax, whatever), it should become at that point private property which can be passed on to heirs without being double taxed again after the passing away of the original earner. That is taxation double jeopardy and should be unconstitutional.
As for the comment about preventing an oligarchy by egc52566, that is taken care of already when the person first pays the above mentioned income tax, etc., the same as everyone else does when they earn money. Whether a person earns one dollar, one hundred dollars, ten thousand dollars, or ten million dollars, each dollar should be treated the same and, after income tax, Social Security withholding, etc. are paid at the time it is earned, it should become private property not to be re-taxed, because a fair share of tax has already been paid from it regardless of the income level.

Posted by: SCOTSGUARDS | July 26, 2010 10:52 AM | Report abuse

I write: Oh, boohoo. Those unfortunate heirs to a millionaire who left behind two homes and a retirement account that they (the heirs) didn't earn and he (the dying millionaire) no longer needs. Too bad their dying patron didn't think to spend this excess wealth on something of lasting value to society instead. Too bad the heirs will only be able to keep 45% of the value of all this excess.
-------------------------------------------
Besides the point that it seems unscrupulous and absolutely criminal that the Government has this entitlement to a large portion of inheritences and estates, you don't seem to understand how easily it is to pass on an estate valued at $1 million or more. Dying with a house worth $400k, plus life insurance worth $500k, plus a 401k or retirement account valued more than $100k would easily put one over that threshold. The estate tax doesn't affect millionaires, it affects middle class folks who did the right things in planning their lives and retirements. Why should the government be entitled to money that someone worked hard for all their lives and wants to pass on to their families?
It just goes to show that, even if you play by the rules, you're still going to get screwed by someone, wether it be a bank that decides to call in a loan on your house, an unscrupulous fund manager or corporation that raids your retirement account, or, ultimately, the government who decides to raise tax rates to pay for their rampant spending and unfunded obligations. Makes me want to join a monestary and become a monk.

Posted by: pswift00 | July 26, 2010 10:50 AM | Report abuse

egc52556 wrote:

Oh, boohoo. Those unfortunate heirs to a millionaire who left behind two homes and a retirement account that they (the heirs) didn't earn and he (the dying millionaire) no longer needs. Too bad their dying patron didn't think to spend this excess wealth on something of lasting value to society instead. Too bad the heirs will only be able to keep 45% of the value of all this excess.

And, BTW, stop calling it a death tax. The Estate Tax is one of the key tools that keeps America from becoming a royalty-based oligarchy.

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What give the government any right to my assets when I die?

Besides if you think any millionaires pay that you are nuts they form trusts to avoid that tax.

This tax hurts the middle class more than anyone else. Most people with middle class incomes who own a home have a million in assets when they die. The average boomer who earned $30,000 at a top salary in their life is passing with 1.3 million in assets today and if they were not savvy enough to know to form a trust their kids are going to lose have their inheritance. My wife's grandfather was a farmer his whole life, owned a $250k property (average) and never made more than $30k on a good year, died this year and have 1.7 million in assets to go to his four children. Lucky for them this tax is not catching them because he had no idea how to set up a trust.

Idealism never meets reality, we always say this will get the rich yet the law makers are really rich and they design these laws with loopholes for themselves and nail the middle class with these taxes.

If own a home in a major city you have enough in assets to get caught by this tax, a million is common today.

Posted by: flonzy1 | July 26, 2010 10:08 AM | Report abuse

Just goes to prove what I've always said, "Hire a Bartender"!

Posted by: renabean | July 26, 2010 9:06 AM | Report abuse

ANTLIB wrote: The return of the Death Tax. This year, there is no death tax. For those dying on or after January 1 2011, there is a 55 percent top death tax rate on estates over $1 million. A person leaving behind two homes and a retirement account could easily pass along a death tax bill to their loved ones.


I write: Oh, boohoo. Those unfortunate heirs to a millionaire who left behind two homes and a retirement account that they (the heirs) didn't earn and he (the dying millionaire) no longer needs. Too bad their dying patron didn't think to spend this excess wealth on something of lasting value to society instead. Too bad the heirs will only be able to keep 45% of the value of all this excess.

And, BTW, stop calling it a death tax. The Estate Tax is one of the key tools that keeps America from becoming a royalty-based oligarchy.

Posted by: egc52556 | July 26, 2010 8:15 AM | Report abuse

Ann such a dutiful marxist helping the democrats fan the flames of class warfare again just in time for the election.

Posted by: insanecommenter | July 26, 2010 6:45 AM | Report abuse

The United States is a Cruel Country ruled by division, fear, ignorance and injustice. Unfortunately, its cruelty is infectious. Western democracies are mostly racing one another to the bottom to adopt similar policies. Great leadership !

Posted by: hamelinfish | July 26, 2010 6:06 AM | Report abuse

Personal income tax rates will rise. The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed). The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise. Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates. The full list of marginal rate hikes is below:

- The 10% bracket rises to an expanded 15%
- The 25% bracket rises to 28%
- The 28% bracket rises to 31%
- The 33% bracket rises to 36%
- The 35% bracket rises to 39.6%

Higher taxes on marriage and family. The “marriage penalty” (narrower tax brackets for married couples) will return from the first dollar of income. The child tax credit will be cut in half from $1000 to $500 per child. The standard deduction will no longer be doubled for married couples relative to the single level. The dependent care and adoption tax credits will be cut.

The return of the Death Tax. This year, there is no death tax. For those dying on or after January 1 2011, there is a 55 percent top death tax rate on estates over $1 million. A person leaving behind two homes and a retirement account could easily pass along a death tax bill to their loved ones.

Higher tax rates on savers and investors. The capital gains tax will rise from 15 percent this year to 20 percent in 2011. The dividends tax will rise from 15 percent this year to 39.6 percent in 2011. These rates will rise another 3.8 percent in 2013.

Posted by: ANTILIB | July 26, 2010 5:42 AM | Report abuse

I guess the hedge fund manager needs to retain the tax cut in order to have his personal bartender make his martini or whatever, as opposed to making it (probably a bad one) himself. Yes, the rich are different.

Posted by: meldupree | July 26, 2010 5:42 AM | Report abuse

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