Barry Ritholtz: Estate Tax Gets A Lot More Attention Than It Deserves

Ted

FYI: The levy is portrayed as a big threat to family businesses and farms, though almost no one pays it.

Chatting recently with a politically active friend on the left, I was surprised when she mentioned her objection to the estate tax for “obvious reasons.” This discussion was instigated by a column in the right-leaning Washington Examiner, which wrote that “the death tax was the grim reaper of family-owned businesses,” an argument often invoked by those opposed to the levy.

Regardless, it is surprising that anyone would be concerned about the estate tax. Of all the tax issues to worry about, this one should be at the bottom of your list. The exemptions are high, and the ways to legally avoid the tax are well-known and relatively cheap, if a bit complicated.

For most families, the only excuse for paying estate tax is getting hit by a bus on the way to the attorney's office to sign the paperwork. Other than that, it is a nonissue for almost all Americans.
Regards,
Ted
https://www.bloomberg.com/opinion/articles/2019-04-12/estate-tax-gets-a-lot-more-attention-than-it-deserves

LewisBraham

Here is the real shocker: there are 6 million small businesses and 2 million family-owned farms in America. In the last year of the old law in 2017, only 80 small businesses and farms nationwide faced any estate tax.

Nothing makes more sense than the estate tax if you believe in American individualism and democracy, that people should make their own way in their the world and earn their keep instead of being coddled by the government or family wealth. It’s not a “tax on success” as the heirs didn’t actually produce the wealth they’re inheriting. If anything a high estate tax would force them to work hard and make their own way in the world. Moreover, massive inheritance is a threat to democracy as it concentrates power in a few families like kings or queens for generations in perpetuity. Yet nothing is more ridiculously maligned in the conservative press as this article illustrates. It’s a non-threat, a bogeyman that for 99.5% of right wing Americans with delusions of grandeur will never affect them.

Anna

Maybe it is who we are as a culture or, maybe, a species. Do we really worry more about the wealthy and their businesses and farms (or the profit derived from them) than about food for the young?

At the minimum, don't you find it interesting that taxing large estates brings more panic to the average American than cutting food stamps? Somehow it looks, to me, more like objecting to having a government that taxes than about class warfare.

Crash

I worry not one iota about the estate tax in my own case. Those who are obscenely wealthy owe (lots) more than I do toward society's ongoing welfare. There it is, plain and simple. The estate tax law is written so that it affects a tiny number of people, at the very top of the heap. It ought to be broadened, on a progressive basis. The larger tax code is a joke, too: it is actually regressive, as you go up the income chart. The top tax rate is ridiculously low. The tax laws--- particularly the estate tax--- is written to reflect the assertion that money is more important than our respective obligation toward society.

hank

Anna said:

”Maybe it is who we are as a culture or, maybe, a species. Do we really worry more about the wealthy and their businesses and farms (or the profit derived from them) than about food for the young? At the minimum, don't you find it interesting that taxing large estates bring more panic to the average American than cutting food stamps?”

Maybe that elite minority is better able to articulate and propagate their case to the masses? It’s not uncommon for Great Lakes coastal resort communities to invest millions of state / local tax dollars on amenities like public marinas for the “high-flyers” who visit the area 2-3 months of the year, while ignoring basic infrastructure and services for the less affluent locals residing only blocks away from all that extravagance. The contrast in many communities is stunning.

Worse, the “locals” who pay these taxes don’t seem to notice or mind. However, they’ll often begrudge a food stamp recipient or government employee or union worker earning a modest wage and living just a bit better than they can afford. Go figure.


“The rich are different from you and me ... .” (F Scott Fitzgerald)

“I should have called it Something you somehow haven’t to deserve.” (Robert Frost)

Superyacht: https://www.superyachtfan.com/yacht_seaquest.html

Crash

Just read via that link about DeVos and family. Made me nauseous.

hank

@Crash -

The size of Betsy’s boat may be best appreciated by observing the lone individual standing at the bridge. -
(Third Deck / Port Side).

Crash

Accccch. Fart-sniffing spooge-pig.