Arkansas Blog

Is Mac Campbell still giving campaign speeches defending Blanche Lincoln's position on repeal of the estate tax on the super-rich? Maybe he should stop being a tax lawyer and remember "it will cost the U.S. Treasury a trillion dollars in the first decade - roughly what it would cost to provide health insurance for every uninsured person in the United States."

This repeal won't help me ever, but I have to agree with the super rich.

All this money has been taxed once, why should it be taxed again?

I don't care if they are uberrich, the fact is they should not be taxed twice, no one should.

It's there money, why should they ahve to share it?

I'll tell you one reason why the tax should remain: without the tax we will create a landed gentry in the US just like they have in much of Europe where being a member of the lucky sperm club counts so much more than any personal ability. With the ability to set up charitable trusts, our super-rich already have a way to provide for their offspring for generations as it is.

taxbs, To say that the "money has been taxed once" is incorrect. Many estates have a large portion of their value in appreciated assets. Assets should as these have never been taxed.

Wasn't there a time when the wealthy counted their blessings and felt they owed the society/country/system which allowed them to accummulate such wealth a tangible demonstration of appreciation? Well, maybe not, but this group of greedy thieves takes rape to an all time new and comprehensive level.
I guess they do harbor a bit of shame in that they are doing it behind front groups. Let's start a counter proposal - nationalize every business they own. Where's Hugo Chavez when we need him?

Greed begets greed...as evidenced by the determination of our wealthiest to hold on to their fortunes past the grave.

In addition to not having ANY evidence that the estate tax costs family farms, I wonder how the group above is spinning the fact that Warren Buffett--always in the top 10 in wealth--is FOR the estate tax?

Why should their be a tax on on something you already paid taxes on?

Thats double taxation, and that my liberal friends is against the law.

All this money has been taxed once, why should it be taxed again? Posted by: taxbs

Why not tax it again, or as an alternative, tax it more the first time? As George Bush continues to prove, it takes money to run the people's government, and that money has to be raised somewhere. If we don't get it from Peter, we have to get it from Paul.

We've all heard the old saying, "it takes money to make money". People who inherit huge wealth have an accompanying huge advantage in making their wealth grow. If this pot of money just keeps accumulating, generation after generation, eventually you have a handful of families owning pretty much everything.

Europe had this problem in past centuries, with the Catholic Church. People kept dying and leaving much of their wealth and property to the church, which was untaxed. Since churches never die, their wealth continued to grow until the church owned pretty much everything. The only way to solve the problem was to tax the money back into general circulation and to pass laws that churches cannot own vast quantities of land.

I've never understood this deal with "it has already been taxed once". Where does this "right" come from?

I'm sorry the wealthy can't keep all the money they can make, enjoying the advantage wealth has in helping them make even more money. But we just don't have that luxury. Bills have to be paid, and those who enjoy the greater wealth should pay the greater share. If we have to get the money somewhere, it will hurt the rich a lot less than taking more money from people who have just enough to pay their basic bills and set aside a little for retirement.

I just don't buy the concept that, if the rich can't keep all they make, it's just not worth the effort to work to succeed. I'd gladly earn $2 million and only get to keep half it it, than to live on $30,000/year and get to keep all of it.

What difference is there between welfare and inheriting money? Either way, it's not earned. And it comes out of my pocket either way, transferred either by government or unrestrained, government-buying capitalism.

As a society, we like to talk about people getting ahead on their merits, but at the end of the day the rich get richer and the poor get poorer. Luck has as much to do with it as merit.

If you want a meritocracy, then start everyone off at the same level and see where they end up. Bush, for example, would be managing a snow-cone stand somewhere.

Such ignorance! Just because only 1/4 of one percent will be taxed seems to make it allright? Why in the world can anyone possibility think they have a "right" to take assets worked for over a lifetime?
Not all of the taxable asset is from appreciable assets, and even that portion that has had taxes paid on the income generated. You can't sell it without capital gains, so exactly what are you supposed to do with it.
You also need to include the Walton's history of giving when talking about the estate tax they would pay. Keep the tax in place and this giving goes away. Keep the donations, especially in the amount the Walton's give, and you can offset alot of the harm this tax does.

I pay taxes on my EARNED income, then I pay sales taxes on that EARNED income. The taxed twice argument applies to all taxes and not just the estate tax.

I'm fine with ending the estate tax as long as it's replaced with an UNEARNED INCOME TAX. Right now those who get UNEARNED INCOME through inheritance pay nothing while working men and women pay taxes on every dollar they EARN.

Why should those lucky enough to have wealthy parents get that UNEARNED INCOME tax free?

FYI: I stand to inherit some UNEARNED INCOME one day and I'd gladly pay taxes on it just as I do on my EARNED INCOME.

Also, please remember this. Nobody has to pay estate taxes or income taxes. If you give enough to charity, you pay no taxes at all.

Make the estate tax simple and fair.

Make the tax X% of the unrealized appreciation in your estate when you die.

If you already paid income tax on what you have, you owe nothing.

Pay it once. And only once.

Considering that much of the family wealth mentioned in the article comes from family interest in large corporations, I suspect some of this income is in the form of dividends, which are not taxed the way they used to be. Factor that in with the rest of the Bush tax cuts for the wealthy, and I think it's optimistic to say that the families have already been taxed once on this income (I know the companies were taxed, but the incorporated entity isn't legally the same thing as the family members).

I get a paycheck ever week and I pay taxes out of it.

I take that money and put it in a stock account. It grows and I sell it.

I then have to pay a tax on that money.

Why? The money has been taxed once before I got paid. Why the hell should I have to pay more on top of that because I made a wise investment.

So some people are lucky and are born to rich people. Good for them, to bad it's not me. The fact is someone earned that money and worked hard for it, why should their family not get the benefits of that.

Many of you who cry about the super spoiled rich are in fact just jealous of them.

"Why should those lucky enough to have wealthy parents get that UNEARNED INCOME tax free?"

Becasue someone already paid taxes on that. Why should they be penalized for being born to the rich parents?

Why should they be penalized for being born to the rich parents?

Posted by: taxbs

Because they are Republicans?

Because they are Republicans? Posted by: Don Keyhotay

True Republicans don't pay taxes. Ask Leona Helmsley.

In 1967 my father, brother and I started our family business. We all three worked hard and made good money and we paid 70% income tax on all of it until Pres Reagan lowered it some and we paid at least 50% on our earnings until our mother & father died in 2001. My brother and I had to pay taxes on our parents estate in the amount of three million dollars. It had to be cash and had to be paid to the IRS in nine months. Our only option was to sell the assets of the business, close the doors and lay off 19 employees and deprive my son and my brother's son and daughter the right inherit the established business in order to come up with the cash. Now if you feel this is a fair thing to happen to the American dream of a family I hope you will leave this country.

You must be a liar, after all according to the liberals, nothing like that ever happens and if it does it to small to count.

Poor Blanche. You know which way she will vote. Just ask the Farm Bureau.

The whole left side of this debate is based on a classic socialist rich vs. poor argument. The whole principle of the estate tax is just wrong. I'm not rich, but I don't think the rich and the uber-rich owe anymore (percentage-wise) than I do. The tax system should be, pardon the phrase, fair and balanced. You shouldn't just tax people because you can or out of spite. There will always be a rich and a poor and we don't need socialist class warfare policies interfering in our economy.

i'm no cpa, but isn't the estate tax simply taxed as ordinary income to the heirs income bracket? asking
in other words if it came from grandma, a great uncle or a kind stranger it would be taxed at the same rate

ARK. BLOG: No. The tax is a sliding scale, though it rises quickly and tops out at about 55 percent, based on the size of the estate. Everything that passes to a spouse is untaxed. The first $3 million passed to anyone is untaxed. Plus, property is inherited at a "stepped up basis." That is, say I inherit $1 million worth of Wal-Mart stock acquired in 1974 for peanuts. If that's the entire estate, it passes tax free. Plus, I can sell it at the current value and owe no capital gains tax because I inherited it at the stepped up value.

If you "win the lottery" through buying a ticket or being born lucky you should be taxed the same.

Taxes are levied as money changes hands if money is earned, unearned or if goods are purchased. Why exempt only one class of money (inheritance) and not another (earniings).

The second reason to tax income from inheritance is to insure that each generation has the opportunity to build businesses. History shows that wealth (property) accumulates over time. If allowed to become overly concentrated there is no opportunity to build new businesses which generate taxes. Then the government has no income and collapses.

This seems to be spawning terrorism in the Arab world now because the young have no opportunity to start or build any business and better themselves - then the best option they have is to blow themselves and others up so they can move on to their next life rewards sinced there is no hope. In Arab countries as it is now, either you are born rich or you are born destitute.

Do we wish to end up like the Arabs?

We all three worked hard and made good money and we paid 70% income tax on all of it until Pres Reagan lowered it some and we paid at least 50% on our earnings until our mother & father died in 2001. My brother and I had to pay taxes on our parents estate in the amount of three million dollars. . . .Our only option was to sell the assets of the business, close the doors and lay off 19 employees and deprive my son and my brother's son and daughter the right inherit the established business. . .
Posted by: Anonymous

Anonymous - I am sympathetic to your story, but the 70% rate in 1970-1980 means you each had taxable income of over $200K. (In today's dollars, that would be quite a bit more).

To pay $3,000,000 in estate tax, you would have an estate of $6,000,000 or more.

I would hope that after 20 years of high income and with a $6,000,000 estate, including a thriving business, you would be able to combine savings and borrowing power to come up with $3,000,000 to preserve a thriving, successful business.

Apparently estate planning was not utilized in your predicament.

With some advance planning, either before death or even in the 9 months after death, there should have been a way for your family to raise the funds to pay the tax.

However, I agree with you - the tax is wrong and you should not have been forced into that situation.

Dear Anonymous,

Your story reminds me of the Dear Abby column in which someone wrote about this trying personal situation to which all the avenues of solution were blocked. Abby's response was, "I think you guys at Yale should be spending your time on other types of writing!" You may not be at Yale but your "story" seems to fit that mold.
First, if your family paid such high tax rates [even when we had a progressive income tax structure] you should have hired a better CPA. The fact that you could not create enough liquidity or borrow to pay whatever the estate tax may have been suggests need for better financial planning and estate lawyering.
Don't you have something better to do Yalie?

Please answer this:

Why should income through inheritance not be taxed as is now the case? Lottery winnings are taxed. All EARNED income is taxed.

I'm a true capitalist. I think everyone should start off with nothing and have to EARN every dime they get. Everyone eles has to work, pay taxes and slowly save to buy their business. Why should some rich person's kid not have to do the same? If you can't compete in the capitalist systmen without a free ride then YOU get the hell out of this country.

"I hope you will leave this country."

Please answer this:

Why should UNEARNED INCOME through inheritance not be taxed while earned income is? Lottery winnings are taxed. All EARNED income is taxed.

I'm no socialist. Hell I'm a real capitalist. I think everyone should start off with nothing and have to EARN every dime they get. Everyone eles has to work, pay taxes and slowly build their business (wealth). Why should some rich person's kid not have to do the same? If you can't compete in the capitalist systmen without a free ride then YOU get the hell out of this country.

I think the least people could do is pay tax on their UNEARNED INCOME. I personally think they should have to buy the entire business from their parents if they want to keep it.

If you don't want to pay taxes then stop your bitching and give your money to starving people all over the world. There is a 100% deduction for charitable giving.

Click on the "K" and save lives.

The first $3 million passed to anyone is untaxed. ? Ark. Blog

Not quite correct ? True, what you leave your spouse is not taxed.

After that, you can give a total of TWO million in total to others (not counting charities) before the tax is triggered.

ARK. BLOG: Correct. Our mistake. It's $2 million and rising to $3.5 million by 2009. At the current exclusion, you already exclude all but about 150 to 250 families per year in Arkansas.

"Plus, I can sell it at the current value and owe no capital gains tax because I inherited it at the stepped up value."

Isn't this why Blanche Lincoln's bill on the Estate Tax is really a sham-repeal. She eliminates the step up according to my lawyer. She says she is for repeal but she is pretty well going to sock it to the rich by taking away their stepped-up basis.

In the words of the late, great Leland Duvall, "Don't tax you, don't tax me, tax that fellow behind that tree."

"She says she is for repeal but she is pretty well going to sock it to the rich by taking away their stepped-up basis."

Max is too red in the face on the estate tax to think rationally about alternatives or positions that take more than one sentence to explain. He sure isn't going to actually look at anything that Blanche Lincoln does without a jaundiced view. . . let's move on to the next issue

"Is Mac Campbell still giving campaign speeches defending Blanche Lincoln's position on repeal of the estate tax on the super-rich? Maybe he should stop being a tax lawyer and remember "it will cost the U.S. Treasury a trillion dollars in the first decade - roughly what it would cost to provide health insurance for every uninsured person in the United States."

What would Lincoln's bill do?

Throwing out the entire tax code is making more sense every day. The Fair Tax on consumption (HR25) is gaining support in a lot of places, and will put the US in a more competitive position globally.

Why doesn't the Times ever beat up on the STATE LEGISLATURE (including Mac Campbell's opponents) who voted to repeal the state estate tax? Blinded by hatred of Blanche Lincoln?

Blog: What's the rationale for the 'stepped-up basis' as it exists today? - wouldn't the most 'neutral' treatment of the wealth be in elimintating the tax on the estate and allowing transfer without the stepped up basis - so the income/gain generated by the wealth would be the same regardless of who gained it?

Is that what Blanche's proposal would do?

Also in the examples above related to the (current) $2M exemption from the ETax, keep in mind that's per person, so 2 parents can each x-fer $2M, so a (2-parent) can effectively shield $4M.

To the above comments about the 70% rate, that was only on the margin - I highly doubt the average tax rate (% of income actually paid) came anywhere close to 70%.

Great article, that was interesting