The Punning Pundit

Congress should scrap inefficient death tax
By STEVE BACCUS
Special to The Star
I love this guy's name. Baccus. So very nice and pagan. And given that he is a farmer, it is not at all inappropriate...

Congress has a golden opportunity. It can help reinvigorate our economy, slow the disappearance of farmland and help small businesses stay in business and be more profitable.

Given current economic uncertainties, one would think Congress might take that opportunity, especially since it won't cost taxpayers much of anything.

Congress let this same opportunity slip away last year but, this week, it once again has the chance to spur economic growth by getting rid of the burden of death taxes.

So... if Congress gets rid of the "death tax" today, that will be the magic bullet that makes people start more businesses? Never mind that the vast majority of these businesses end up bankrupt within 2 years. Do people really think that way? Does anyone say "boy, I'd better do everything I can to leave less than 3.5 million to my children. I wouldn't want to be a burden to them"? My father is a small business owner, and I am, quite frankly, glad that he doesn't think along those lines...

Legislation to end the death tax permanently is expected to come up for a vote in the House this week. The Death Tax Permanency Act of 2003, HR 8, would finish the job Congress started when it voted in 2001 to phase out death taxes over the next nine years, repealing them entirely for only one year -- 2010. The tax will return in 2011 unless it is permanently repealed before then.
Repealing the death tax for good is a very good idea. The tax, which allows the government to take up to 50 percent of an estate,
Up to 50% of an estate not going to a charity or spouse. And only an estate that is A) poorly planned, and B) only on chunks of which are over 3.5 million. Two 25 year old freeloaders whose Mom dies can pocked US$3,499,999.99 without being liable for any of it.

runs counter to the American tradition of building up a farm or small business and passing it on to the next generation.
Oh, yeah. I totally remember most Americans who have millions in assets being small business owners. In fact, US$3.5 million is exactly the definition of "small" business.

The tax is double taxation, because the income it took to build the business already has been taxed.
Right. Just like how first my company is taxed when it makes a dollar, and then that money is taxed when I get it. See, the principle here is simple: when large chunks of money change hands, the State gets a piece of it. The less the person did to earn that money, the more it should be taxed. If all I did was wait for my Dad to drop dead, I didn't exactly earn anything

And it doesn't even raise much money for the government, because the costs of ensuring compliance are about equal to the money it brings in.
This would be damning if true. Show me the proof. Or, explain why we shouldn't tax the money at a higher rate, so that we get a higher rate of return

The death tax makes it difficult, if not impossible, for the heirs to carry on the farm or business, because many have to sell part or all of the estate in order to pay the death tax.
*sigh* This isn't a tax on Death, it's a tax on unearned wealth. And if I can't carry on an established business with US$3.5 million in capital, nothing is going to keep that business running. Oh, and how many is "many"? What percent?

When farms are sold, developers often buy them and literally pave much of our green, rural paradise to put up a parking lot. According to the American Farmland Trust, more than a million acres of farmland are lost each year to development.
Ok, but how many of those acres of farmland are "lost" to development each year because of the estate tax? How many are simply sold off because developers are offering more than farmers can make by growing food? Keep in mind that agribusiness has become a capitol intensive industry where small concerns can no longer compete with the economies of scale offered by large corporations. We may not like to see Aunt Emma kicked off the family farm, but that battle was lost decades ago. The irony is that our nation really is better off with only a few large farms than it was with many smaller farms. Or do we want to have the agricultural practices of China?

Death taxes hit farmers particularly hard, because most of their assets are tied up in land, livestock, farm buildings and equipment. And they hit families at one of the worst times they will face, the loss of a loved one. Money paid to lawyers and accountants in an effort to reduce the death taxes owed could be better spent on reinvesting in the business, hiring workers and supporting the local economy. It is estimated that eliminating the death tax would create 200,000 jobs a year.
Who estimates that? Without a citation, I don't believe it...

Most farmers work a longer day than the average worker can imagine. And at the end of that day, the farmers sometimes get prices for their crops that don't even pay the cost of production. But farmers keep doing what they do because they love it. They love the land. They love taking a bare patch of ground and producing from it the food, fiber and fuel on which our nation and much of the world rely.
In a recent survey of young farmers, 88 percent said they would like to pass the farm, and the farming way of life, along to their children. Our government should be making it easier, not harder, for them to do that. Please encourage your members of Congress to repeal the death tax permanently by supporting HR 8.
So, you want me to contact my member of congress (who would be receptive, all things considered), and ask him to either cut governmental services or raise my taxes so that some people who love their jobs can keep wealth they didn't earn? Huh? In what weird world is that at all in keeping with the best practices of Capitalism?

Steve Baccus is president of the Kansas Farm Bureau. He lives in Minneapolis, Kan.

I must say that I am disappointed with the Kansas City Star. When I was an editor of my school's newspaper, it was one of my jobs to ensure that any fact that ended up in my section was cited. It was also my job to ensure that arguments were well thought out and followed logically from one sequence to the next. In printing this article, the Star shows that it doesn't have the journalistic ability of a Junior College newspaper...