Anytime consumer advocates or public interest groups try to whip up support for measures that would benefit the vast majority of Americans, conservatives claim such proposals amount to nothing more than an attempt to usher in class warfare. Yet, for all their verbose rhetoric, it's the conservatives themselves who invoke class warfare on a routine basis.
Just take a look at two of the bills passed this past week -- so-called bankruptcy reform and repeal of the estate tax. The former is aimed solely at poor and middle class individuals. It shields the rich and completely ignores the need for reform regarding businesses.
Just take a look at two of the bills passed this past week -- so-called bankruptcy reform and repeal of the estate tax. The former is aimed solely at poor and middle class individuals. It shields the rich and completely ignores the need for reform regarding businesses.
According to Kevin Drum at Washington Monthly,
...the bill does nothing to address the growing use of "asset protection trusts," used by rich people to shield income from bankruptcy proceedings, or to rein in the unlimited use of the homestead exemption, which allows them to shield multimillion dollar homes from bankruptcy courts.
The Daily Kos reports that
The "Abuse Prevention and Consumer Protection" in this bill occurs for Chapter 7 and Chapter 13 bankruptcies - individual avenues of bankruptcy. Conspicuous in absence, evidently not needing reform, are Chapter 11 bankruptcies.
Want to guess what Chapter 11 covers?
You guessed it. Chapter 11 is bankruptcy for businesses.
While conservatives and ethically-bereft democrats are making sure that the bankruptcy bill only singles out the less well-to-do, their support for the repeal of the estate tax ONLY benefits the very richest Americans. They have continued to champion this repeal despite the fact that two of America's richest individuals -- Bill Gates & Warren Buffet -- have come out against it!!
If these two measures don't typify what class warfare is all about, what would?
The argument that the estate tax benefits only the wealthiest Americans doesn't hold water. America's farm and ranch families, most of whom could never be considered wealthy using any criteria, will benefit greatly from the repeal of this tax.
ReplyDeleteFor example, a single-operator small family farm in South Georgia growing 250 acres of cotton, with one cotton picker, one module baler, a tractor and half-dozen smaller pieces of machinery would be considered a small operation. The average income from the farming business, after taxes and all expenses, could be as little as $10 - 15,000 a year.
Under the current system, if the owner died, it's unlikely the heir or heirs of that farmer could afford to continue the operation. Odds are they would sell off some or all of the operation just to pay the taxes.
That scenario plays out across this country every day. It's an example of why the estate tax has to go. The same example holds true for many industries, it's just that agriculture happens to be the industry I work in.
Additionally, the estate tax does represent a form of multiple taxation. The farmer pays taxes on the land and equipment when it's purchased. He pays ad valorem taxes every year on the equipment, and property taxes on the land. Then the heirs must pay again when the property is inherited. It's a system hits lower and middle income individuals hardest.
America's farm and ranch families, most of whom could never be considered wealthy using any criteria, will benefit greatly from the repeal of this tax.
ReplyDeleteHow? Under the current exemption, less than 5% of families or individuals inheriting anything are subject to the estate tax. I think my point stands.
Additionally, the estate tax does represent a form of multiple taxation. The farmer pays taxes on the land and equipment when it's purchased. He pays ad valorem taxes every year on the equipment, and property taxes on the land. Then the heirs must pay again when the property is inherited. It's a system hits lower and middle income individuals hardest.
This point would be germane IF ownership didn't change hands. However, the new owner[s] (the heirs) have never paid any of the taxes you mention.
And, as indicated above, it does not hit lower and middle income folks hardest simply because few, if any, are currently subject to the estate tax.
Less than five percent of families, nationally, might be subject. Most families, however, aren't inheriting family businesses (such as farms). There is a distinct difference between inheriting a dining room table or an old Impala, and inheriting a family business.
ReplyDelete