There are many needy families in this country today. Something like 2 million people fall into one particular category that is all-too-familiarly called “99ers.” This term refers to a group of people who have been unemployed for over two years and no longer get any kind of unemployment insurance benefit nor do they get any other type of payment. They are on food stamps and some welfare perhaps. Most Americans have no idea how one survives without an income at all. Who would understand that?
And yet there are people even needier than the 99ers, if that could even be imagined. They are the 18 families who have been fighting a long twilight struggle against paying inheritance taxes. They have spent millions upon millions to fight the unfair practice by the government of taxing their inheritances.
The Neocon Republicans call it the “Death Tax.” And would that it were dead, but it is not. It is all too prevalent and the Neocons are working as hard as they can, like little toy trains, pushing and grunting in the well of the House and Senate for their patrons, the greedy, Super-rich. Not the ones in their districts or in their states. No, not true constituents. They work for the super-rich campaign contributors and super-rich contributors to the Neocon Republican Party. And who are these 18 families?
The names are pretty well known by now. They are the Allyn-Soderberg family, the Blethen Family, Cox Family, DeVos and VanAndel Families (Amway), Dorrance (Campbell Soup), Gallo, Harbert, Johnson, Koch, Mars, Mayer, Stephens, Nordstrom, Sobrato, Timken, Walton (WalMart) and the Wegman family.
Not many, in the scheme of things. They do not even comprise the total of the two-point-five tenths of one percent who make up this category. But these 18 families have reportedly spent $490 million over the last ten years lobbying Neocon Congressional members to pass on all of their wealth. And they succeeded finally in 2010. If your Daddy or Granddaddy dies yet in 2010 and leaves a billion dollars, there is no federal inheritance tax at all. That is the way the law reads. But if no new tax is introduced this year,then, in 2011, things will revert to pretty much the way they were in 2001. The deduction will be $1,000,000 and the rates on inherited income will be between 41% and 55%.
So you can see that this is an urgent problem. Let’s say that a member of the Walton family is inheriting $20 million. That person would only be able to keep a mere $12 million or perhaps a little more. There are some articles that indicate that for various reasons the average paid tax on inheritance has averaged slightly more than 15%. If that is true, then the Walton in the example would keep something like a minimum of 18 million dollars. In other words, enough on which one could survive…even a Walton.
So the provisions are being debated but the ultimate legislation will probably come out somewhere in the neighborhood of a $5 million personal exemption and a 35% tax on the balance. So, in that situation, our Walton would keep about $15 million. Don’t worry about them. Somehow they’ll make it.
Now if we were to take the estimated tax. Not even the total value of the estate…but just the tax that the family would pay…and if we divide it into livable $20 million inheritances, the Walton estate would cover 3,500 heirs at $20,000,000 each. But that is calculating from the small end of the funnel. The reality is perhaps ten times that amount.
In each of these cases, the Dorrances of the Campbell Soup company, the Nordstroms, the Wegmans and the infamous Koch Family all have going businesses. It isn’t as if they just dropped out of the sky. They are making huge amounts of money right now. This is added on to what they are already taking from their family businesses each year as CEOs and Vice Presidents, with auto allowances, entertainment expenses and so on for their businesses. We are not talking about Tiny Tim here. Or Little Lord Fauntleroy. These are not waifs, but rich and powerful people.
Why are Warren Buffett and Bill Gates and Ted Turner not part of this movement? Why have they already made provisions for their families and are giving away most of their huge fortunes? Well, first of all because there are multiple, multiple ways to provide very large amounts of money for your family before you die. These are not people without tax attorneys. People like Buffett and Gates, however, see a greater use for their money than passing it all on to children to further the already too prevalent American Aristocracy.
With inheritance taxes, children will not inherit everything. But the question becomes: what is rational? If a person inherits simply cash or stock and not the company itself, does more money than one person can spend in a lifetime of more value being used in society? If the proper governmental system is in place, so that revenues are not wasted, then certainly it is.
There is an exception for keeping farms and small companies in a family. Huge public corporations do not break up because of inheritance taxes. Public stock is inherited, with value 65% greater than the tax, and taxes are paid. It is not complicated.
If the Super-Rich were to say to the Neocon Republicans, “We will support you if you are fair to all Americans and will not support you if you are not,” then we would have none of these problems. But they don’t. These people want power. They want to say yes or no to environmental regulations, to taxes, to product safety. They do not want to be burdened by the triviality of a child dying of asthma or poisoned food because of the negligence of one of their plants. They want control without the inconvenience of responsibility. As they see it, the larger the amount of money you have…even if, as is the case often….you could never spend it in five lifetimes…the more political power they feel they have.
This is why they fund the Cato Institute and the Heritage Foundation and FreedomWorks and Americans for Prosperity and the Hudson and Manhattan Institutes. They know that if government costs money, the government will look to its wealthiest citizens for a share of their income, which, even if it is a smaller percentage, will still be very substantial amounts in absolute terms. You will never hear the Cato Institute talk about raising taxes. And FreedomWorks and Americans for Prosperity are all about reducing government spending and keeping health care out of government.
They hate unions because unions get control. If Americans organized as unions organized, this country would have a government with a balanced budget. It would have a very strong domestic industrial and commercial base. And it would have a very happy group of multi-millionaire and billionaire citizens, even if the 18 families who are protesting so vehemently might have to pay a few more bucks to help make it so.