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The Senate has started a series of four votes that concludes with the passage of the tax cuts bill.
The order of the votes are as follows:
#1 (Sen. Coburn) to offset the cost of unemployment insurance benefits (requires 67 votes; expected to fail) *** UPDATE *** This measure has failed.
#2 (Sen. DeMint) permanently extend the tax cuts and estate tax (requires 67 votes; expected to fail) *** UPDATE *** This measure has failed.
#3 (Sen. Sanders) to eliminate the tax cut for highest incomes/modify estate tax (requires 67 votes; expected to fail)
#4 Senate passage of the tax cuts bill (simple 51 vote majority required for passage; expected to pass with strong bipartisan support)
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I say extend cuts for everyone below a 500k. Take it up again during the next campaign... wait, we're already campaigning? Oh.
The goal of votes 1-3 should tell you all you need to know about the priorities of each party.
I think I just saw a story on CNN that said McConnell has an earmark for something in Kentucky for 600 MILLION simoleans.
Could that be right? Really???
When did the estate tax begin?
And so continues the fleecing of the middle class to redistribute all wealth to the top 1%. Don't the Dems know that this is all part of the Republican long term playbook plan to cut taxes so much to benefit their uber rich supporters, so as to leave the deficit so big, increase the debt so much, in order to starve the beast of all entitlement programs? They are using this to essentially end social security medicare and medicaid and to result in the elimination of such departments that are in their way of raping the enviornment like the EPA and helping to educate the populace like the Dept. of Ed because an educated people don't vote republican. This has all been in the works since the New Deal. I just wish the Dems would've called them out on this, and then told them where they can go with their Bush tax cuts for the rich!
SO educated people don't vote republican eh? I think you got confused with the uneducated that vote for democrats becuase the Democrats continue to feed them free money and keep them in poverty with their Government handout programs. Any educated person sees that Democratic ploy for what it is and votes for Republicans. And also how does the Department ofo Education educate our kids... Seems they mostly get in the way of education that should be left to the states. Appears that the DOE is riipe for adjustment!
Before the department of education, there was no national standards and many states failed their citizens with little or sub standard education.
Saltgrass is correct, but does not go far enough.
Tell us, oh wise saltgrass, in what direction test scores gave gone since the birth of the DoE?
Here is a hint: it is the opposite of up.
Shut it down. It does not work- in fact, it does more harm than good. Get rid of every single bureaucrat employed there. Give the monies to the states as block grants, and let the states decide the best uses for the funds.
Only in D.C. Can failed agencies be kept in place and have their funding increase all the while failing their mission.
Could the issue be that more people attend school and there are fewer grade school dropouts? I agree that over all test scores have declined, but that decline can be attributed to low-income school systems. Inter city schools score worse on average than urban systems. Those failures are at the state level and not a result of the department of education. We do not have equal school systems and that is the responsibility of the state. I also feel that education requirements have been lowered as a general rule so more systems can meet the standard. We need to fix the inequality in school funding and hold school districts to a higher standard. Of course in some class rooms discipline is an issue, but there should be an opportunity for a solution and not an excuse for failure.
Actually, no, that could NOT be the issue.
The DoE came in to being during the Carter administration-by which time, the bulk of the baby boomers had graduated. Yes, the last of them were still in school- the youngest were twelve when he took office- but their numbers were much smaller than their elder siblings. In fact, many schools consolidated classrooms because the attendance dropped.
So, wrong on the numbers.
Grade school drop outs? Are you serious? Since I can remember, mandatory attendance from age five to age sixteen has been universal in this country- that sure did not change during the Carteof administration.
Test scores have dropped because of new, costly, idiotic mandates from the D o E. Nice spin, though.
You will have to try harder to justify the billions spent for reducing test scores, not to mention dumbing down the schools to such a degree that we no longer lead in math and science. Try really hard. After all, liberals always have some excuse for failure.
None that make any sense, but some.
That still does not relieve the states and parents from the responsibility of success or failure in education. I am not going to put words in your mouth so I will ask what will be improved by eliminating the department of education? In some circles this attack on the department of educations is a straw man argument, with the real desire to eliminate public education. Some people are afraid of their kids being exposed to ideas that may different from their belief system.
I am just asking for an honest argument with no hidden agendas and thanks for your honest answer yesterday about motorcycle helments laws.
What part of it is a waste of billions of dollars, and has actually had an ADVERSE impact on education are you having trouble with?
Good lord- it is a failure. Why are we still funding it?
Honest question here...particularly for those in favor of an estate tax.
Why is there an estate tax? A person pays taxes on the income as they make it. The person pays taxes on the investments they make throughout there life. The government gets a bite on all the money at some point. Why should there be a tax on the money that that person leaves to their family upon their death. The money has already been taxed at some point in it's life.
I have not staked out a position on this on this board as of yet, and I really am not interested in hearing about revenue raised or lost. I'm just curious about WHY you think this tax should exist. Thanks.
Hay, Frank- I'm probably going to lose some of my good standing in the liberal club, but I for one don't agree that there should be an estate tax. I don't think the rich 'deserve' a penalty, or their heirs do, either simply because they ARE rich, but more importantly- because that money was already taxed when it was earned.
I think of it as double-dipping by the government.
Maybe some smart politician can draw up a bill to make it go away, and some other smart politician can attach an ammendment on campaign finance reform to it. Now THERE would be some worthy 'compromise' legislation.
My 2 cents.
You left out that families have to usually sell their inherited property or equipment or whatever within their inherited estates to pay the 35 -55 % estate taxes so they can keep what is left of the farm or business or store, etc etc etc when taxes have already been paid on that resource as you properly staetd. All this ya ya about the estate tax is just Democratic demagoging!
If you have money, it is much easier to make more money. Nothing wrong with that, but it creates a system where the money pools at the top - not good for the long-term economy. Intergenerational wealth transfers are a good time to claw some of that money back, since you can't argue the heirs did anything in particular to deserve all of it.
The purpose of money is to provide a convenient medium of exchange for goods and services. When more and more of it is concentrated at the top, the functionality of it is reduced. Theodore Roosevelt recognized the problem at a time when it was really becoming a problem and instituted the estate tax.
The why is easy - because it almost always someone else's money, and easy to "sell" because it belongs to the Evvviiilll "rich." And everyone knows, particularly here in MSNBC land that those damned rich "have enough" and owe some duty to "give back." Could you just imagine the absolute outrage that would occur if there was a flat tax on all assets held by anyone, regardless of income level, when they died? Yet despite the Equal Protection Clause for some reason the rich (which is anyone with an estate of $1.5 million depending on the year) get treated differently.
I have seen first hand the devastating effect this (and let's not forget the AMT) can have on families and the ongoing businesses that go through estates after death. Not pretty.
But hey, at least it keeps a lot of estate tax attorneys and CPAs employed. You have got to create, and aggressively manage an estate plan as early as possible.
This was a subject on WPR this am....apparently the estate tax started sometime in the 1920's during the "robber baron" era. (Just repeating what was said).
Even though I will NEVER have enough of an estate to leave my kids that this impacts me, I also wonder what and why this is done. If the person has already paid their taxes on the money when earned, why pay again when their heirs inherit the cash? This does not make much sense.
Good point. I imagine there is quite a bit of money in large estates that hasn't been taxed because of various tax shelters and loop holes. Also there is investment money that none of us pay taxes on until we sell to take the capital gains. When you have millions or billions, most of it is invested and it just keeps earning money. On 401K's, the money we choose to invest is pre-tax; money added to it by employers is not taxed. I am no tax expert but as long as the money sits there, it isn't taxed. When it passes to heirs, then it is subject to taxing just as is the money in 401Ks when withdrawn. As for homes, property, etc., I don't think there should be estate taxes paid by heirs on anything that has already been taxed.
The estate tax is NOT double taxing because it is new income to those who receive it. Even tho it is not technically "earned" income, it should be taxed as wages (but not higher) just as if you wond the lottery, which in effect is exactly what happened.
gc- Tell a couple of grade-school kids and their mom they 'just won the lottery' when the sheriff comes to the door and tells 'em Dad was just killed in a car accident.
As for the whole family business/farm issue (not as common as complained about), I'd be for an exemption for real family businesses so they would not be forced to sell off assets to pay the tax. The government could have a tax lein that would only be paid if the business was sold outside the family.
I like that in the tax deal, the Republicans were forced to give up on keeping the estate tax at 0%. Also remember that there is a $5 million exemption, which reduces the number of people who have to pay this to a very small percentage.
There is a credit for real family businesses. If the property is owned by a family business, the amount of exempt property is substantially higher than for other assets of the estate. In addition, the tax can be passed on by the estate to the heirs who can borrow against their ownership interest in the business.
Opportunity in this country is sometimes well rewarded. An estate tax is a way of returning a portion of that reward to the entity that made the opportunity possible.
At least you know why it was instated originally.
So all get the "opportunity" to pay back the "reward" every year in the form of taxes, but some get the super special pportunity to pay a bunch MORE back when they die.
Seems totally fair. So why not "allow" everyone the opportuinity to pay back their reward for living in this country? Around here, it's not that hard to hit even a $5 million floor. And that was only recently raised from the previous $1.5 floor, which was routinely hit in So. Cal. with a single family house.
Ever hear of trust funds and incorporation?
Didn't know the government was in charge of granting us the opportunity to succeed. And it appears there is a steep price for them to provide that opportunity to us.
And whether it's a 35%, 45%, 55% tax, it sure sounds more like a shakedown you'd get from the local thugs rather than a payback for the wonderful support you've had from the government throughout your life.
The fact is the government is the catalysts that provides opportunities to succeed.
JoAannaSmith1 -
By entity, I didn't mean government.
The estate tax exists because governments require taxes to function. Henry VIII had an estate tax and an army of lawyers to thwart all his dukes, earls and lords who were trying to avoid the taxes. Back then in an economy with no money, the state/king imposed a tax when the lord died and passed on his castle/manor/lands to his heirs. The US adopted the estate tax in part to fund WWI. Is it fair to tax estates? Is it more fair to tax income? The idea is to promote a robust and growing economy with an efficient system that does not unduly inhibit work, innovation and acceptable risk taking. Keep in mind that the heirs inherit with a stepped up cost basis (they acquire at the appreciated price and owe no capital gains tax). Without an estate tax on these appreciated assets there would be no tax at all. Because of the high exempt limits before an estate tax hits, people are not selling family farms or businesses to pay the tax. That's a myth. The joke in law school was that only wealthy fools paid an estate tax, most structured their estates to avoid liability (it's as simple as buying a life insurance policy dedicated to paying any tax found to be due). It is a community and public policy decision as to whether there is some point at which we believe that passing on assets to your chosen heirs is not as productive as encouraging the wealthy to set up many foundations. On the whole, it has been pretty well established that the really wealthy waste their excess money and do not produce relatively productive heirs. Remember, it's your income vs. their wealth - choices have to be made.
From a pure economics standpoint, the argument for an efficient market assumes that everybody starts off equal. Large estates distort the market in two ways.
First, the wealthy tend to invest in their children -- whether through private schools, tutoring, summer camps, contacts when the time comes to go into the workplace, guaranteeing loans when their children start a business -- that give their children an opportunity that does not exist for the average person.
Second, unearned wealth (which is what an inheritance is for the children) gives the wishes and desires of the recipients a greater impact on the marketplace. From an efficiency standpoint, it is acceptable that the inventor of an improved mousetrap can pay more to get what he wants because he has provided something that other people want. However, when the inventor dies and his family is no longer providing that improved mousetrap (having sold it off to Acme Corporation years ago), giving the greedy heirs the same ability to impact the market place does not result in greater efficiency as the children are providing nothing that the market wants (other than perhaps scandalous photos).
Not to mention concentration of wealth and a monarchy based on wealth.