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Thursday, June 15, 2006

Wall Street Journal Editorial On The Death Tax

Back when I was selling real estate I ran into a small tragedy that is replayed often across America.

A widow had her house for sale to pay the IRS death tax.

It was a very nice house in a good area, but she and her kids would have to move. Her husband had been conscientious. Knowing she would not be able to run his business if he died they had saved and bought a small apartment complex to generate cash flow for her - it was for sale also.

The death taxes were large - and they were due now. The house and the apartments would have to be sold fast - at that time meaning under their true value, before large penalties were incurred with the IRS (the behemoth that assumes you are guilty until you prove your innocence.)

They thought they had enough life insurance - but it had been sold by an agent more familiar with his commission schedule than their needs - or the IRS rules.

Dad had died thinking his family had been taken care of - instead they were taken to the cleaners. Plans he may have made for college and careers for his kids were gone - and his widow was not prepared for all of the expenses.

If you wonder why small family farms and businesses get sold to conglomerates - the death tax helps rip them from their owners families.

You can be sure that congress and their wealthy supporters do not suffer such indignities - they write both the laws and the loopholes that allow them to hide their wealth from taxes.

Most Americans favor capitalism because it offers the opportunity to improve their lives. They may not be wealthy - but they want a level playing field where wealth is available to all.

The death tax is easy for a politician to sell as a Robin Hood gesture, having you join their band of merry thieves - "Rob the rich to feed the poor."

Bear in mind Robin Hood feed himself very well first, he was not robbed by himself - and he and his merry band were still crooks - so is congress and those that ask them to steal on their behalf.

To simplify, In California petty theft is usually a misdemeanor - while receiving stolen goods is a felony. If it is wrong for you to do something, say steal from your neighbor, it is an even greater wrong to delegate someone else to do it for you.

If it is wrong to steal from a widow, how does it become right to ask congress to do it for you?

Most new jobs in America are created by small business and entrepreneurs - and according to this Wall Street Journal piece they are the ones hurt by the death tax - not the rich. These are service jobs - like nurses, small business owners, accountants, doctors, programmers, creators - the kind of jobs folks want.

High paid manufacturing jobs are a thing of the fading industrial age - boring mindless jobs that are no better than being a wage slave. The death tax perpetuates wage slavery while punishing business creation.

The rich will create foundations and trusts and all sorts of fancy hedges from the tax man for themselves. Their supported friends in congress will make sure they are protected - or they will become congressmen themselves.

There is nothing wrong with wealth, it gets invested and spent, all benefit from its acquisition. And wouldn't you like to be wealthy one day too?

If we could get rid of the IRS and de-fang congress with term limits ---- but that is another bed time story fairy tale ---- like Robin Hood.

"When buying and selling are controlled by legislation, the first things to be bought and sold are legislators." ‚– P.J. O'Rourke



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