Category Archive 'Death Tax'

04 Jul 2010

Large Tax Hikes In Six Months

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Remember all the RINO Republicans back in the GOP majority Congress that voted on George W. Bush’s tax cuts? The only way it was possible to pass any tax reductions was to allow liberals to include expiration clauses.

The Snow Report lists the tax increases we have to look forward to.

In just six months, the largest tax hikes in the history of America will take effect. They will hit families and small businesses in three great waves on January 1, 2011:

First Wave: Expiration of 2001 and 2003 Tax Relief

In 2001 and 2003, the GOP Congress enacted several tax cuts for investors, small business owners, and families. These will all expire on January 1, 2011:

Personal income tax rates will rise. The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed). The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise. Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates. The full list of marginal rate hikes is below:

The 10% bracket rises to an expanded 15%

The 25% bracket rises to 28%

The 28% bracket rises to 31%

The 33% bracket rises to 36%

The 35% bracket rises to 39.6%

Higher taxes on marriage and family. The “marriage penalty” (narrower tax brackets for married couples) will return from the first dollar of income. The child tax credit will be cut in half from $1000 to $500 per child. The standard deduction will no longer be doubled for married couples relative to the single level. The dependent care and adoption tax credits will be cut.

The return of the Death Tax. This year, there is no death tax. For those dying on or after January 1 2011, there is a 55 percent top death tax rate on estates over $1 million. A person leaving behind two homes and a retirement account could easily pass along a death tax bill to their loved ones.

Hat tip to Dr. Mercury.

08 Jun 2006

Death Tax Repeal Fails

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The Wall Street Journal put the debate on the Death Tax (which costs more to collect than it adds to the Federal coffers).

Americans favor repealing the death tax not because they think it will help them directly. They’re more principled than that. Two-thirds of the public wants to repeal it because they think taxing a lifetime of thrift due to the accident of death is unfair, and even immoral. They also understand that the really rich won’t pay the tax anyway because they hire lawyers to avoid it.

For proof that they’re right, they need only watch the current debate. The superrich or their kin–such as Bill Gates Sr. and Warren Buffett–are some of the loudest voices opposing repeal. Yet they are able to shelter their own vast wealth by creating foundations or via other crafty estate planning. Edward McCaffery, an estate tax expert at USC Law School, argues that “if breaking up large concentrations of wealth is the intention of the death tax, then it is a miserable failure.”

Do the Kennedys or Rockefellers look any poorer from the existence of a tax first created in 1917? The real people who pay the levy are the thrifty middle class and entrepreneurs who’ve built up a modest nest egg or business and are hit by a 46% tax rate when they die. Americans want family businesses, ranches, farms and other assets to be passed from one generation to the next. Yet the U.S. has one of the highest death tax rates in the world.

But two Republican poltroons in the Senate joined the Party of Envy to defeat the repeal 57-41. A 60 vote majority was needed to end a democrat filibuster against basic decency.

Besides Mr. Baucus (D – Montana), three other Democrats voted to end debate and clear the way for a vote on repeal. They were Senator Ben E. Nelson of Nebraska, Senator Bill Nelson of Florida and Senator Blanche L. Lincoln of Arkansas. Two Republicans, Senator George V. Voinovich of Ohio and Senator Lincoln Chafee of Rhode Island, voted to block the bill.

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