Saturday, November 17, 2012

All your net worth are belong to me

By Donald Sensing

We love the American myth that we treasure competitiveness in the business world, but we don't. Only small, growing businesses like competitiveness. Once they become large and powerful, they set about crushing the competition.

Politicians don't like competition, either. Since, unlike businesses, politicians cannot create wealth by doing politics, and since government's appetite for money is unlimited, the only way politicians can get their hands on money is the take it from those who created or saved it. Hence, the real Uncle Sam poster is not the World War One classic, "I want you for U.S. Army," but:


Which brings us to, "Ranchers, farmers brace for 'death tax' impact."

Currently, the federal government taxes estates worth $5 million dollars and up at 35 percent. When the Bush-era tax rates expire in January, rates increase to 55 percent on estates of $1 million or more. While some Republicans want to eliminate the death tax entirely, President Obama has proposed a 45 percent rate on estates of $3.5 million and up. 
"The idea behind the estate tax is to prevent the very wealthy among us from accumulating vast fortunes that they can pass along to the next generation," said Patrick Lester, director of Federal Fiscal Policy with the progressive think tank -- OMB Watch. "The poster child for the estate tax is Paris Hilton -- the celebrity and hotel heiress. That's who this is targeted at, not ordinary Americans." 
But according to the American Farm Bureau, up to 97 percent of American farms and ranches will be subject to an estate tax where the exemption is set at $1 million.
And yet ordinary Americans is exactly who are being targeted. The remaining members of the Greatest Generation have always wanted to pass an estate to their Boomer children, and 99 percent  of them who will do so sacrificed seriously to save and invest. So sorry, government gets the money now.

Note too Mr. Lester's idea that broad, national policy can be made on the basis of what Paris Hilton does with her inherited money. Suppose, Mr. Lester, that Paris had instead bought in to Bill Gates' and Warren Buffet's foundation, would you still "target" her?

A better illustration of the Puritanical Left can hardly be found: They disapprove of how you want to live and therefore want to use the law as a club to punish you for doing what they don't like. As columnist David Harsanyi observed,  "Progressivism is the belief that we have too much freedom with which to make too many stupid choices."

That aside, there are economic flaws in the Left's justification of the estate tax. (Understand, though, that any attempt to explain why it should be levied is just a smokescreen. The Left simply does not want anyone to have substantial financial assets except itself. That's it. It's all about power, not finances or fairness.)

Many Democrats argue the tax promotes equality among classes, especially in capital gains -- or stocks passed from one generation to another. Since stocks are only taxed when they are sold, the government can't profit from long-term investments without the estate tax.
This is, of course, simply wrong. Wrong both as in non-factual and wrong as in morally misguided. First, the non-factual: that no tax will be paid on gain in stocks without the estate tax because otherwise stocks won't get sold. Yes, they will get sold. Maybe in settling the estate, maybe not. Maybe within the same year and maybe 10 years later, or 25. But they will get sold and taxes due from the sale will be levied then.

So why the urgency causing their sale and taxation immediately? The question segues directly to the morally misguided part of being wrong. First, the Left's flat refusal to wait until stocks get sold in their new owners' own time evidences not a desire for "fairness" but of greed, pure and simple. The American Left operates at the level of Veruca Salt.

I want your money and I want it now!
Second is (again) the unacceptable idea that you will use your inherited money in ways that please you rather than the Left. That simply cannot be allowed. Third, note well this sentence: "the government can't profit from long-term investments without the estate tax." What? Why should the government "profit" at all? The idea that somehow the government is being cheated is repugnant. The government has no right to your money. It simply has the power to confiscate it, but only as long as we let it.


It's not about fairness or even about funding the government. It's about de-powering the people and concentrating power in government.

What the heck, here's the clip:






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