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Republican Senators Move To Protect Rights Of People Who Get Gobs Of Money Without Working For It

Consider the following two methods of getting money:

1. Work hard, and get paid for your work.

2. Have the exceptional good luck to be born as the child of a person who has a lot of money. Wait around for a while, and then get your share of that money.

If you get your money using method 1, you have to pay a significant portion of the money that you have earned in taxes. It’s what’s necessary to keep the country running, so that you’ll have a stable society in which finding work and doing work is possible.

If you get your money using method 2, well… there is a group of Republican senators who want to make sure that you don’t have to pay any taxes on that money at all.

Sure, you depend on the same social stability that other people do, a social stability that is enabled by taxes, but, if you have the good luck to get money through inheritance, the Republican senators listed below think that you need more good luck, and so want you to get a special exemption from paying your fair share to keep the country running.

Yesterday, they came together to introduce S. 1183, a bill to repeal taxes on the inheritance of multimillion dollar estates.

There is already an exemption from taxes on the inheritance of the small estates that typical working parents leave to their children. That’s not what S. 1183 is about. S. 1183 is about giving the children of millionaires and billionaires the right to continue to hoard money they didn’t earn, keeping it selfishly all to themselves, without supporting the nation that enables them to remain comfortably posh.

The names of these senators are:

Sen. John Thune (Republican-SD) — principal sponsor
Sen. Kelly Ayotte (Republican-NH)
Sen. John Barrasso (Republican-WY)
Sen. Roy Blunt (Republican-MO)
Sen. John Boozman (Republican-AR)
Sen. Saxby Chambliss (Republican-GA)
Sen. Daniel Coats (Republican-IN)
Sen. John Cornyn (Republican-TX)
Sen. Michael Crapo (Republican-ID)
Sen. Michael Enzi (Republican-WY)
Sen. Deb Fischer (Republican-NE)
Sen. Jeff Flake (Republican-AZ)
Sen. Charles Grassley (Republican-IA)
Sen. Orrin Hatch (Republican-UT)
Sen. Dean Heller (Republican-NV)
Sen. James Inhofe (Republican-OK)
Sen. John Isakson (Republican-GA)
Sen. Mike Johanns (Republican-NE)
Sen. Mark Kirk (Republican-IL)
Sen. Mike Lee (Republican-UT)
Sen. Mitch McConnell (Republican-KY)
Sen. Jerry Moran (Republican-KS)
Sen. James Risch (Republican-ID)
Sen. Pat Roberts (Republican-KS)
Sen. Marco Rubio (Republican-FL)
Sen. Tim Scott (Republican-SC)
Sen. Richard Shelby (Republican-AL)
Sen. Patrick Toomey (Republican-PA)
Sen. David Vitter (Republican-LA)

12 comments to Republican Senators Move To Protect Rights Of People Who Get Gobs Of Money Without Working For It

  • Dave

    Peregrin, the top 1% pay almost 4o% of the taxes, top 5% almost 60%. If social stability is enabled by taxes, then one would have to conclude that the top 5% are providing most of the social stability. Sock it to ‘em.
    NOBODY likes irresponsible rich kids who have all the toys and wait around for Daddy’s money. EVERYBODY likes kids who get up with Dad at 3am to milk the cows, but will lose the farm ’cause Dad can’t pass it down to them; inheritance taxes you know. Love the way you’ve simplified it for everybody.
    By the way, the bottom 50% paid just over 2% of the taxes. By your reasoning they are contributing diddly to the social stability the rich enjoy. Come to think of it, I’m not rich and I’m enjoying that stability too!

    • Jim Cook

      Dave,

      No small family farm sustained by the “kids who get up with Dad at 3 am to milk the cows” is going to be harmed by estate taxes. Estate taxes only kick in on inherited value above $5.25 million — per person. You’re spreading a myth.

    • J Clifford

      Dave, your comment has a major logical flaw. You’re saying that, yes, paying taxes provides for social stability.

      However, you’re then arguing in favor of most of the taxes going away so that social stability can be replaced by more rapidly growing personal wealth for rich people.

      Which way are you going to have it?

      Where do you think the money of the ultra-rich comes from? Economic surveys show that most of it doesn’t come from work, but passive investments in corporations, where the wealth is actually produced by people who have to do labor for their money. The working people have to pay higher tax rates for their income, though, than the people who sit around and use their piles of money exert power.

      And Dave, do we really SOCK it to a person who has grown up in luxury, to ask them to contribute to society a portion of the more than 5.25 million dollars that they receive, when they don’t work for it at all? Do these people really, really, really have it so hard, Dave?

      I’ve lived on a small dairy farm where the kids got up early in the morning to help in the milking. No one in that family ever paid estate taxes or worried about passing the family farm down in the family.

  • Dave

    Jim, I clicked on “myth” but it wouldn’t download properly for some reason. Perhaps I might have said “family business” and left the cows out of it, but my only poor excuse is that I tend to hastiness when being informed that the rich need to pay their fair share to keep the country running. That’s goofball economics, utterly meaningless in the real world. The rich pay nearly the whole damn thing. I will try factual ranting next time.

  • Dave

    J, re: the logical flaw. Yes, I am saying that paying taxes provides for social stability. Am I arguing in favor of most of the taxes going away? How can you say that? Who thinks inheritance taxes could ever represent most of the taxes? My real concern when discussions such as this start heating up a little (granting that the heat may be mine alone)is that small, independent family businesses so easily come into the crosshairs of those whose target is the “rich.” Hope you’ll pardon the metaphors, but sometimes they really fit.
    It takes bookoodles of money to start a small business with the kind of cash flow it takes to feed, clothe, house and educate even a small a family. What looks like great wealth to some looks like stock on store shelves to others.

    “Do these people [the rich] really, really really have it so hard, Dave?” Sheesh. “Is it really, really, really about these people?”

  • Bill

    Taxes are not only about raising revenues, they are also, inevitably and like it or not, social tools for promoting some behaviors and discouraging others. Thus the most common explanation for why long-term capital gains receive such favorable tax treatment…to encourage the rich to invest…and thus the reason why detrimental products such as tobacco and alcohol are subject to ‘sin taxes’…to discourage consumption. The estate tax has never been much of a money-maker; rather it plays the socially useful role of a braking function opposing the generation-on-generation accumulation of all of the nation’s wealth in a few ultra-rich family dynasties, which is otherwise a mathematical certainty and the surest way to destroy a free and democratic society. And, at the end of the day, this is what Republican operatives object to most about the estate tax. The Republicans are the party of the oligarchs, and oligarchy would be so much easier without estate taxes. The genius of the Republicans is their ability to persuade the non-wealthy, like Dave, that favored treatment for the ultra-wealthy is in Joe Six-Pack’s self interest. Pee on my head and tell me it’s raining.

  • Dave

    Bill, I think it presumptuous of you to make offhand statements about how I have come to my persuasions. I have made no defense of the rich, corporations or Republicans. We may be talking Keynesian Eco here, you know, the “there are sooo many people, and only sooo much of everything to go around” economic theory of the last century. The genius of some (including Democrats who have their fair share of Oligarchs) has been to convince Joe Six-Pack that he’s having to walk to work because somebody else is riding a bicycle.

    The estates of the ultra rich can survive inheritance taxes. Many thousands of small businesses cannot.

    • Jim Cook

      Dave,

      How small would you say the net worth of a “small business” has to be to be a “small business”? The Small Business Administration and Congressional Research Service mention $15 million as one standard.

      A mom-n-pop small business is exempt up to $10.5 million ($5.25 million per spouse, even if the spouses’ death dates are separated by years). This means that if you’re inheriting a small business with $10.5 million in net worth, you pay no estate tax. For a $15 million net-worth business, that makes $4.5 million taxable. I’m no accountant, but my reading of the estate tax laws indicates that if you’ve inherited a small business with a net worth of $15 million, you’d pay $1.65 million and keep $13.35 million in net worth in the small business. That’s entirely survivable.

  • Dave

    Yes, Jim, from our armchair perspective it is survivable, but for much of small business, a drop in gross receipts of even 15% can be fatal. Receipts are tied to inventory. I’ve been going on about this because confiscation of a chunk of inventory that size (the liquidation of which pays the estate taxes) only hurts people who bring variety and choice to our mundane lives. They may have them in Maine, but in my neck of the woods the independent hardware stores are gone. Does anyone think that politicians in the pocket of mega home supply corporations would agitate for tax relief for the smaller businesses? I’m old enough to have seen too much of this in my lifetime.

    • Bill

      Just FYI, your example of a mom-and-pop hardware store doesn’t work here, Dave. Consider True Value hardware stores…a good example because True Value is a co-op of independent retailers, not a franchise. According to True Value, its members have “over 4,500 stores worldwide and more than $1.9 billion in sales”. That’s $422K in annual sales for the average store. From these hard numbers we can estimate the estate tax on a typical True Value store.

      If Ma and Pa Kettle (who are about to die, leaving the store to Little Timmy) have been remarkably successful proprietors, with annual sales twice the average (i.e., $844K) and an annual inventory turnover ratio of 10 (which would be stellar for any retail operation, let alone a mom-and-pop shop) then the average retail value of Kettle’s True Value Hardware Store’s inventory at any one moment is thus $84K. Contrariwise, if the store is dramatically unsuccessful and its inventory turnover ratio is just 2, its average inventory is $422K — we’ll go with the latter number because it is less favorable for my argument. Finally, let’s say The Kettles own their building and all its fixtures, and its value is an astonishing $5 million dollars (i.e., Kettle’s Hardware isn’t just a grungy old building, rather it is the stately pleasure-dome of True Values, one of the Ten Wonders of the World). When the Kettles die, the store Little Timmy inherits is thus worth at most $5.4 million, on which the estate tax is…hmmm, let’s see here…oh yeah, here it is: ZERO.

      Opponents of the estate tax frequently raise the spectre of its disastrous effects on such largely non-existant entities as family farms, mom-and-pop shops, and other such Lassie Come Home fantasies. This is, in a word, horse-hockey. If you want to blame somebody for the passing of the family farm and the mom-and-pop shop blame corporate mega-farms, Walmart, and the laws Congress passes to stack the deck in the latter’s favors…but you can’t blame the estate tax.

  • Dave

    Bill, regarding the “generation-on-generation accumulation of …wealth” being a mathematical certainty, I would check the math again. Corporations meet up with the law of diminishing returns while at the same time families pass ownership down to ever larger generations who, individually, each have less of the pie. The grandchildren of many of America’s dynasties are working day jobs like the rest of us.

    • Bill

      Dave, it is easy to mis-apply the so-called “law” of diminishing returns, as you have done here. If it applied in the way you suggest, it would be impossible for us to explain why airlines keep merging into ever fewer and ever larger entities, as do banks, as do law firms, as do industrial corporations, etc. And as regards the division of family wealth into ever-smaller chunks as ever-larger generations of heirs inherit it, I doubt this bears any relationship to reality. Most parents will their entire estates to their children. The Total Fertility Rate in the U.S. is just slightly below 2.0 (and even lower for rich white folk), whereas the Replacement Rate would be 2.1 …i.e., with every generation fewer children inherit more wealth. If those children are smart enough to invest that and live off the interest, not the principle (and that’s how smart rich folks do), then chances are they’ll pass an even larger estate onto their own heirs. The favorable tax treatment of long-term capital gains insures that their wealth will grow much faster than that of working stiffs (if the latter’s wealth grows at all, which is usually not the case today). And don’t forget that rich folks mostly marry other rich folks, thus merging two families’ wealth into one.

      And thus more and more wealth accumulates in fewer and fewer hands. You don’t really think that the Koch brothers and their clubhouse chums got rich through hard work, do you?

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