Of death and taxes
Whoever is inaugurated on January 20, 2001 should help Congress do something about the death tax. Bill Clinton vetoed a death tax reform bill earlier this year. George W. Bush would sign a death tax reform bill in a New York minute. Al Gore won’t say.
Here is the problem: If a farmer or rancher leaves the farm or the ranch to his or her heirs, Uncle Sam takes a huge tax bite out of the proceeds in the form of an estate or death tax. Unless the farmer or rancher has the money to hire high-powered CPAs and tax lawyers, the heirs are often forced to sell the family farm or ranch to pay the death taxes.
And, all-too-often real estate developers gain control of the land and chop it up for second homes or condos. What was once beautiful open space falls victim to urban sprawl.
Many liberals like the death tax because they have a class-warfare mentality that assumes all farmers and ranchers are rich land barons who deserve to have their holdings confiscated by the government in the form of taxes.
Where I grew up, ranchers still joke: “I stole the cattle. I stole the feed. And, I still lost money.” They say that because farming and ranching are tough, dangerous and often poorly-paying occupations.
Believe it or not, we do have a cheap food policy in this country. If you doubt it, visit grocery stores in Europe or Great Britain. Our cheap food policy makes it tough for farmers and ranchers to get money ahead. And, when they do, they tend to invest it in more land without realizing that Uncle Sam is waiting like a vulture to pick the bones of their land holdings when they die.
Death taxes were not created to benefit pluggers. They were devised by the English Kings as a way of gaining more lands and power for the Crown. Whenever the landowner died, the lands would “revert” to the King. It was simply a royal way of taking power back from those who didn’t wear crowns. So, from days of yore, the death tax was undemocratic.
Now that so many blue-collar workers and other work-a-day Americans have their company and union pension funds invested in stocks and bonds, they are beginning to feel the pain of capital gains taxes. They are starting to ask: What entitles the federal government to take a 20 percent bite out of my retirement investments?
Those pluggers could have chosen to put their money into a better car or pickup or more beer and brats. Instead, they put their money at risk in a way that helps the overall economy and in a way that makes them less likely to have to fall back on one of Uncle Sam’s welfare programs in later years. Uncle Sam says “thanks” by confiscating 20 percent of the gain on their investment savings.
Whoever is running this country needs to take a fresh look at the death tax and the capital gains tax. Neither tax is democratic or fair. Both need to be repealed. More and more working-class Americans are shooting themselves in the foot when they buy the liberal line that repeal of these two taxes will only help the rich.
The very rich, such as the Hollywood Left, think it is just fine for you and me to pay these taxes. That’s because they have legions of CPAs and tax lawyers who make sure they either avoid them or only pay a pittance. Yet the Hollywood Left want their favorite welfare programs funded – as long as you and I do it.
Pitting one group of Americans against another group is the lowest form of politics. The people who do it are not interested in a fair deal for the pluggers who want to climb the ladder of economic security and success. If they cared about fairness, they would demand the repeal of these undemocratic taxes.
William Hamilton is a nationally syndicated columnist and a featured commentator for USA Today.