Analysis: Democrats' discord undercuts Obama estate tax push

Comments (28)
SeniorMoment wrote:

President Obama should let all the taxes return to Clinton era tax rates. The House Republicans can’t even nag him to make changes in debt limit negotiations if he lets all the already in law temporary tax reductions expire and allow the also automatic spending cuts that happen with no deal. Then he may find he can manage within the nation’s tax revenues. After January 1, 2013, there is no compelling reason for the President to negotiate changes.

The so called fiscal cliff comes in large part from a return to the normal Social Security payroll taxes AND the return of the Clinton era higher tax rate brackets without any further action by Congress or the President. It happens because the tax cuts were in the annual reconciliation bill and by Congress’s only rules they can’t last for longer than a decade under that law. Permanent changes cannot be put in reconciliation bills.

Obama has all the cards in the deck because of this unusual truth, and Republicans in Congress if they don’t have an agreement by the end of session in 2012 probably will never have another chance to change the tax laws, which are always contentious.

Nov 30, 2012 4:12am EST  --  Report as abuse
SeniorMoment wrote:

President Obama should let all the taxes return to Clinton era tax rates. The House Republicans can’t even nag him to make changes in debt limit negotiations if he lets all the already in law temporary tax reductions expire and allow the also automatic spending cuts that happen with no deal. Then he may find he can manage within the nation’s tax revenues. After January 1, 2013, there is no compelling reason for the President to negotiate changes.

The so called fiscal cliff comes in large part from a return to the normal Social Security payroll taxes AND the return of the Clinton era higher tax rate brackets without any further action by Congress or the President. It happens because the tax cuts were in the annual reconciliation bill and by Congress’s only rules they can’t last for longer than a decade under that law. Permanent changes cannot be put in reconciliation bills.

Obama has all the cards in the deck because of this unusual truth, and Republicans in Congress if they don’t have an agreement by the end of session in 2012 probably will never have another chance to change the tax laws, which are always contentious.

Most of the taxes raised by the Estate tax, or so called “Death tax” is have never been subject to income taxes, because the large estates that are taxes usually involve stocks and bonds or businesses, and no taxes are due until the sale of the stocks, bonds and businesses, so estates then pay the tax that was never collected as an estimate labels estate taxes.

Nov 30, 2012 4:15am EST  --  Report as abuse
JamVee wrote:

I hate to agree with Baucus, but he has the right idea. In today’s world of farm and ranch Real Estate, it doesn’t take much property to equal 5 million dollars in value. Many farmers and ranchers would no longer be able to pass on their property to their children if Obama get’s his new Estate tax limits.

It’s the same situation with many small business owners (“DBA”), who account for their business income on their personal tax returns. A GROSS income of $600,000, looks pretty fat, until you find out that their NET income (after payrolls, expenses and taxes), is only $75,000.00.

Nov 30, 2012 7:44am EST  --  Report as abuse
morbas wrote:

Hit the Aristocracy harder and Solve Federal, State and Municipality indebtedness as an united country should. We are engaged in a Aristocracy power struggle, the stakes are slave state wages enforced by debt burdening. A free republic is differentiated from banana status by a strong tax system, a 98% victory over 2% enslavement.

Nationalized Income Tax margin-ed above poverty. This would eliminate all other forms of taxation, the offending transaction taxation included. Want to retire the budget deficit use three surtax levels: 0-20K money 0 tax, 20k-200K money 30% tax, 200K-up money 90% tax. Couples freely share income. The present 2012 income tax rate is less for under 250K income level, is close to 90% at $10M. Compare this to 1960′s top rate of 91.5% at $400K, not so radical is it. Look at this, revenue $8Trillion enough to pay for USA Federal+State+Municipality lumped together. I would say, finding our way as Christians to not tax the poorest provides economic relief.

Nov 30, 2012 8:16am EST  --  Report as abuse
KDupre wrote:

One thing this president refuses to admit is this country’s government has a very serious S-P-E-N-D-I-N-G PROBLEM!

Why on earth does he think that poor people shouldn’t work to support themselves? And why does he think that people who work hard and make money should support people who don’t. There is something sick about that kind of thinking.

Nov 30, 2012 9:11am EST  --  Report as abuse
totherepublic wrote:

You and your family have owned a farm for over 200 years. Members of your family have bled and died to keep your country free and safe for over 250 years. The product of your land and labor has fed literally millions the world over. You have paid taxes, supported the economy, raised your family, entertained your friends, comforted your neighbors and been comforted by them right here on the ONE thing that has been the security and purpose of your family’s life and future. You are an American farmer. And now some idiot with questionable origin and citizenship wants to come and take it all away and you are to just roll over and take it. You bet!

Nov 30, 2012 11:03am EST  --  Report as abuse
xit007 wrote:

Today – the inheritance tax should stay as is – I can’t agree more with KDupre. There is nothing we do in government that is accountable and efficient. Reforms need to hit all branches and levels of government, Spending, Lobbyists, special congressional perks. If we are making a statement about doing the right thing then start with the problem – our governing bodies and its institutions. We provide the government with the means to operate – should who wants to give more to an out of control organization – and that is both parties. I am starting to sound like a tea party person – they might be on to something…Maybe we might have to slow our economy down for a few years to work on our debt. Look at the cities in California where they went bust because the cities voted themselves unsustainable pensions – that not even the private sector can afford. This is a microcosm of our nation as a whole.

Nov 30, 2012 11:15am EST  --  Report as abuse
Acetracy wrote:

Obama has been two faced about the estate tax. in the 2010 negotiations with the Republicans he gave away far more than even Bush had done for the estate tax. Right now the wealthy are able to transfer $5.0 million to their heirs under the one time exclusion – and PAY NO ESTATE TAX!! Previously before Obama this was just $1.0 million.

This deal was so secret that even most estate attorneys didn’t even know of the change until a year later.

And let’s be honest, the super rich ($100 million plus) have put their money in trusts and of shore accounts so that they will never pay estate tax.

Frankly at this point, the US should pass an amendment top the Constitution limiting personal inheritance per person to $10 million (adjust for inflation). that way we don’t create a permanent aristocracy, distort our whole democracy, etc. Who can’t live comfortably on income off $10million (at 5% return that’s $500,000).

However, I strong doubts that the millionaire’s club – THE US SENATE – will do anything to stop the rich getting richer.

Nov 30, 2012 11:21am EST  --  Report as abuse
ConstFundie wrote:

Farms do not make up but a small fraction. Exempt worked farm (Agricultural) land, problem solved. Though, they will need to hit the Trust loopholes to be effective.

Nov 30, 2012 11:31am EST  --  Report as abuse
totherepublic wrote:

ConstFundie
“Exempt worked farm (Agricultural) land, problem solved.”
Not good enough. Also exempt should be all land and residence passed to BLOOD relatives. If your family bought it they paid the taxes. Cash-different story tax it. The land, the home-leave it alone. Everyone already pays property tax, that is enough.

Nov 30, 2012 11:52am EST  --  Report as abuse
jaham wrote:

Let’s run some math here:

$6.7T deficit projected over the next ten years

+

$16T in current national debt

+

$52T in unfunded entitlement liabilities

-

$1.6T from taxing the rich over the next ten years

=

$73.1T in unfunded liabilities (debt) remain AFTER Obama has successfully taxed those evil rich people….

Where is Obama and the Dems plan for the spending cuts and entitlement reforms we need?

Why do liberals refuse to hold him accountable for his disingenuous “plan” when the arithmetic clearly dictates this problem is bigger than can be solved via taxation?

Nov 30, 2012 12:03pm EST  --  Report as abuse
todnwth wrote:

The estate tax should revert to at least to not more than 2.5 million and it should not be less than 40%.
There is no such thing as a death tax, anyone can give their children or whoever they want some 15,000 each year without having to pay taxes any taxes, but the greedy want to keep it in there name until the last minute instead of beginning to give it away during their lifetime so there would not be such an amount for all except the spouse to pay taxes on they by the way ARE NOT DEAD SO WHEN REPUBLICANS AND OTHERS WANT TO TALK ABOUT DEATH TAXES, IT IS A LIE FOR THE DEAD DO NOT PAY ANY TAXES!!!

Nov 30, 2012 12:24pm EST  --  Report as abuse
xit007 wrote:

WOW Tod – you’re missing the point. The article is engaging the problem of inheritance – which means both parents have died and are passing on the family inheritance. If only one spouse dies – the gets use of the estate as an equal owner. So this is a death tax! My problem is that all of this money goes into the government money pit. IF we are having trouble with spending adding gas to the fire is not the answer. In a sane world the money would be earmarked to reduce – debt. It all stinks when you talk about raising more money for a government that is out of control. NOTE: no budget during Obama term – that is out of control. But both parties are to blame – somethings gotta give….

Nov 30, 2012 4:53pm EST  --  Report as abuse
Andrewp111 wrote:

I can tell you what will happen. All rates will rise on Jan 1 to pre-Bush levels. This is guaranteed. All talk of negotiations is just for show. It is purely a blame game.

Nov 30, 2012 7:14pm EST  --  Report as abuse
thesafesrufer wrote:

I love the misleading term “inherited wealth.” I don’t know about other parents, but I’ve been living below my means my entire life so I could build up “SAVING” to pass onto my GRANDCHILDREN.

What kind of total idiot would want to create a tax system that prevents saving for your grandchildren’s welfare? Obama is just a total fool on public policy in so many ways in my estimation. Thank God there are some Democrats left with common sense.

Nov 30, 2012 7:50pm EST  --  Report as abuse
DHites wrote:

@thesafesrufer: So you have accumulated $2.5 million to pass on to your grandchildren?

Show of hands here people … How many of you that are complaining have an estate worth in excess of $2.5 million that you are going to leave to ONE person? You do realize that if you have $2.5 million and three heirs, it’s not taxable if split between the three right? That tax is based PER PERSON, so before the ‘death tax’ kicks in, if you have three heirs, you would have to have an estate worth in excess of $7.5 million to begin with.

I know this is complicated and hard to follow, but really people. Do some research before you start complaining. Very few of you even have a ‘dog in this fight’ since very few of you even have an estate that comes close to the proposed taxable limit.

Nov 30, 2012 8:48pm EST  --  Report as abuse
123456951 wrote:

Wow, one hundred billion in 10 years. Now that will solve our debt crisis! What bull. The liberal press is always saying that the greedy rich need to pay more taxes, and in a fair an equitable world I would agree. A big fear amongst a lot of Republicans though that the press refuses to emphasize is that allowing taxes to increase will only take the pressure off legislators to spend less. And the fiscal cliff? In the end, guess what…. it will be middle class who will gets socked with higher taxes.

Dec 01, 2012 1:58am EST  --  Report as abuse
Samrch wrote:

A better name would be equality tax. It does more equal economic opportunity then anything since public schools. That would be particularly true if it was used for funding low cost public higher education.

Dec 01, 2012 6:14am EST  --  Report as abuse
relegn wrote:

I would tweak Obama’s numbers a bit. I would say 45% on estates over 2 million and exempt farms that are family owned up to the 5 million point.

Dec 01, 2012 8:56am EST  --  Report as abuse
Kady101 wrote:

I don’t understand why we keep having this debate.

The individuals that are hurt by high estate taxes are farmers and ranchers where the vast majority of their net worth is in the farm, which is a nonliquid agricultural real estate asset that would have to be sold to pay the taxes when the owner dies, as there is insufficient liquid assets in the inheritance to cover the tax.

So, exempt agriculture real estate from estate taxes. It would of course be better if this silly tax didn’t exist, but if ag real estate is the sticking point, exempt it and it can be fixed later by a less ideologically driven president.

Dec 01, 2012 9:01am EST  --  Report as abuse
bates148 wrote:

$100 billion in ten years and you steal from the wealth people have built to transfer to their families? Unbelievable. Why don’t we look at ways to cut the over 50 trillion unfunded entitlement liabilities that we face in the coming decade..?

Dec 01, 2012 9:40am EST  --  Report as abuse
Zcats wrote:

This is flat out stealing. Let the American continue to stay quiet and do nothing because you can bet when it comes to the politicians their wealth will stay in their families and yours will go there as well.

Dec 01, 2012 10:52am EST  --  Report as abuse
wrote:

This article failed to mention that when estate taxes went up to 77% prior to World War II, FDR was president and his policies were bent on punishing big business. The result was that his policies prolonged the Great Depression. The only thing that pulled the US out of this decline was FDR’s realization as the US got into the war that he needed to trust business leaders to work together without government interference in order to revive private industry for the sake of supplying armaments and material to win the war. Obama is returning to the policies of FDR without learning the lessons of history.

Dec 01, 2012 11:04am EST  --  Report as abuse
actnow wrote:

Despite all of the rhetoric, many Democratic politicians and their backer are quiet wealthy too. They have a vested interest in protecting their wealth on this issue.

Dec 01, 2012 11:46am EST  --  Report as abuse
Louise77 wrote:

@DHites-
You are incorrect about how the taxes are levied. The tax is on the TOTAL amount of the estate, including all property, money, stocks, etc., and all taxes must be paid before distribution to heirs. Therefore, if your parents own a farm worth a total of $2.5 million, and you splitting it between 3 children, they either have to come up with $1m (at40%) in cash for taxes to keep the farm or sell it to pay the taxes. Either way, the children each only reap $500,000 each after taxes. To look at it another way, each child must forfeit $333,333 to be able to have $500,000 of the inheritance that their parents had worked hard to earn and save and had already paid taxes on! This isn’t a lottery where no taxes had been paid in the past and it s simply a windfall gain. Also, in many cases, the parents likely saved and lived carefully so that they could provide their own long-term care without being a burden to their children. If they die without having to spend it all in a nursing home and don’t have to be on welfare, then our country tanks them by taking a huge chunk of it later. That is despicable.

By the way – there are a few was to get around it, how do you think that the Kennedys have been able to keep theirs and pass it own? Because they ave so much they can take it off-shore and put it in trusts, etc. Of course that takes lots of cash to pay lawyers to find creative accounting.

Dec 01, 2012 12:55pm EST  --  Report as abuse
TheNewWorld wrote:

An estate tax is a wealth tax. Good for Obama to push it. This is a tax that the Gates, Buffets, Kerrys, Kennedys, Rockefellers, Soros, would oppose. It takes power from the wealthy, as opposed to an income tax which ensures the wealthy stay in power and no new challengers arise.

Dec 01, 2012 1:31pm EST  --  Report as abuse
TheNewWorld wrote:

The day of family farms and ranches has long passed. Why do people still think that this targets those farmers and ranchers? You do know that the farmers and ranchers are more heavily subsidized by the government than the oil companies right?

Dec 01, 2012 1:36pm EST  --  Report as abuse
KevinStaker wrote:

Kim:

I enjoyed your estate tax article. I have favorably referred to it in my Estate Tax News Blog.

If you have any more scoops on the estate tax, I would appreciate hearing from you.

Thanks

Kevin Staker
Estate Tax News Blog

Dec 03, 2012 5:51pm EST  --  Report as abuse
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