Let’s talk about the estate tax, which seems to be one of the two Mr. Ed-sized pills liberals are expected to swallow, if they are to accept Obama’s deal with the Republican devils.
Currently, the estate tax, known in Republican circles as the death tax, is ZERO. That’s right. This year, if you move on to the hereafter, and can’t find a way to bring your treasures with you, you can pass every last cent on to your heirs without those greedy tax-and-spend liberals getting their government-stained hands on your assets.
But prior to this year’s “Die Now” tax sale, the rate and the exemption, or “exclusion amount”—the maximum allowable credit before taxes kick in on individuals—were, according to Wikipedia, as follows:
As you can see, if nothing were done, if no deals were made, then the estate tax would readjust to the exemption levels of 2002 and the tax rate of 2001. Quite a difference from zero, no?
By the way, the Obama administration had previously proposed setting the estate tax exemption and rate at the 2009 levels, and while the House agreed, the idea was nixed by Senate Republicans. Go figure.
According to the IRS, because the estate exemption amount, and thus the estate tax return filing amount, has declined since the Bush tax cuts implementation in 2001, there has been a dramatic reduction in the number of estate returns filed:
So, it’s no wonder that when one considers the effects of the Bush income tax reductions and the higher estate exemptions and lower estate tax rates, added to war spending and other Republican goodies, that we are in a debt mess.
But back to the scene of the latest crime. The hostage takers, also known as the Republican leadership, with their guns at the temples of the unemployed and middle class taxpayers, told the police—President Obama—not only do they want to protect the income of their rich constituents by keeping their income taxes at a historic low, they also want to make sure that when their rich constituents go to be with that Big Republican in the Sky, that their considerable estates be relatively free from taxation, which is defined as liberal theft.
So, they extracted a ransom from Obama as follows:
Exemption Amount: $5 million Tax Rate: 35%
Let’s compare that to the do-nothing 2011 estate tax exemption amount:
Exemption Amount: $1 million Tax Rate: 55%
So, you can see why liberals, who generally believe that wealth should not be endlessly perpetuated among small groups of, well, wealthy folks, are a little bit perturbed that their leader would make such a bargain. Liberals also generally believe that the potential inheritors of massive wealth do not have a moral claim on it, since they did nothing to earn it except pass through a Lucky Seven birth canal.
In any case, liberals feel like the estate tax compromise amounts to the Republicans, after kicking Democratic ass, demanding that Democrats send them a thank you note for doing so.
So, if we assume that the Obama administration’s original pre-kidnapping proposal—to return the estate exemption amount and tax rate to 2009 levels—were the baseline in the negotiations with the GOP kidnappers over this issue, then it looks like this:
Obama Position: Exemption Amount: $3.5 Million Tax Rate: 45%
Compromise: Exemption Amount: $5 million Tax Rate: 35%
The IRS reports that in 2009 fewer than 34,000 estate tax returns were filed, with gross assets of $194 billion (above the filing threshold of $3.5 million). And here’s how it ended up:
After accounting for marital and charitable bequests, as well expenses and debts of the estate, less than half of the estates filing in 2009 owed estate tax. The combined estate tax obligation of these estates was nearly $21 billion.
As near as I can tell, there are around 250,000 people who have a net worth between Obama’s $3.5 million dollar exemption threshold and the Republicans $5 million dollar exemption threshold. And just as a crude computation, let’s apply the current mortality rate to those 250,000 folks. That means about 2000 of them will die each year for a total of 4000 during the two years of the deal Obama made with the kidnappers.
So, there you have it. Republicans are presumably willing to hold hostage millions upon millions of Americans—and jeopardize the economic recovery—just so about 4000 or so rich folks will find themselves posthumously exempted from taxes. (Remember, Mr. Obama said that he had to make this concession or the deal would have fallen through.)
That’s why liberals are having problems paying this outrageous ransom to the Republican hostage takers.
