Dying to Avoid the Death Tax

James Parke at Colorado Planning and State Probate Blog writes this in response to yesterday's Wall Street Journal article, "Too Rich to Live":

As a refresher, there is currently no estate tax in 2010. Thus, if a person dies this year, they can pass an unlimited amount of wealth to their heirs without paying a dollar of federal estate taxes. In 2011, however, the estate tax reappears with a top marginal rate of 55% and an exemption of $1M. For example, if a person worth $20M died on December 31, 2010, they would not pay any federal estate taxes. If that same person lived a few hours longer, and died on January 1, 2011, they would pay almost $10.5M in federal estate taxes. Seems a little arbitrary, doesn't it?

People have been speculating for years about the perverse incentive that this creates for wealthy people and their families. Will this result in a string of suicides? Or even worse, homicides? Until recently, I thought that these speculations were simply ridiculous hyperbole masked as legal analysis. The Wall Street Journal has taken this discussion to a new level by listing jurisdictions that offer physician assisted suicide. The one thing that kept going through my mind as I read this article is: are you serious? Why would they go through the trouble of doing that research and publishing that information? It almost seems like they are encouraging this ridiculous behavior.

Of course the WSJ is the paper of money and inherently conservative but before they give the partial details that get Parke upset, they make the obvious point:

Of course, there is a "death incentive" whenever Congress raises the estate tax. But it hasn't happened in decades; the top rate has held steady or fallen since 1942, according to tax historian Joseph Thorndike of Tax Analysts, a nonprofit group.

How is it that the inheritance tax has remained steady for 68 years? A concerted, organized and devious effort by conservatives to brand it the "death tax," thanks to Frank Luntz, get-one-over-on-the-people-for-the-sake-of-the-stinky-rich extraordinaire. (In part, Luntz is also responsible for the horrendous health care bill we've got. All that socialism talk, death panel stuff can be traced back to him.)

Disparaging taxes is easy. Nobody wants to pay more than they have to. But that's only part of the story -- the part that the WSJ, folks like Luntz, and, well, the wealthy, have worked to spread. The wealth disparity in the US -- and the world -- is greater than it has ever been. If the poor were poor because they just didn't care to earn money -- as if that desire to be rich were golden! -- then we'd have another issue altogether. But wealth disparity is created by taking advantage of the disadvantaged. Shaming project-born children, giving them futile educations, keeping them out of college. Allowing corporations to treat their low income workers any way they want. Preventing restructuring of health care. Spending more on infrastructure in wealthy areas than elsewhere. We've got a national system of keeping the down down. Any time you hear entitlements, socialism, natural law, and the like, pay attention to who is saying it and what privilege they're speaking from. Those that have wealth have employed our American mythology to make sure they keep it. And yet, greater equality means a brighter future for the nation.

And that's why the estate tax has remained unchanged for so long. Common Americans were hoodwinked into believing that the increase of death taxes would grossly affect them. And yet, I'd like to see the numbers on how many Americans are going to suffer unsurmountable penalties. The WSJ uses the case of an estate worth 50 Million to demonstrate the taxes cost. How many U.S. estates are worth that? Why doesn't it give us real statistics on how many Americans have 1 million and do the math from there? Because the WSJ -- and Parke -- have a clientelle to protect. And its most likely not me or you.

To Parke's other point: that the WSJ is irresponsible to publish information regarding legal assisted suicide. Pure rubbish. There are currently three states and the battle in those states was so pronounced that residents and their lawyers and doctors couldn't have missed it. Instead he should be concerned for the end of life tragedies that abound because of lack of health care, poor finances, few resources and abuse in the U.S. Assisted suicide laws make states accountable for their ill and elderly. And besides, it's a hell of a lot easier to buy a gun than to get a lethal dose of anything from your physician. Parke's is a moot point, misdirected.

In fact, because of the sad economic state of the U.S. right now, this is probably the best time to reinstate the inheritance tax. I can think of some other policies we could change too.

Frank Luntz, Dissected.

The Dailykos' Jed Lewison cuts up Luntz' new talking points about health care reform:

Now let's see what Luntz has to say about the public option:

Nancy Pelosi and Harry Reid’s recent insistence on including a massively expensive "public" option (in reality, it is a "government" option) has been met with a resounding thud by a majority of Americans. For some reason, advocates of government-run insurance are intent on including it in health reform even if its inclusion brings down health reform altogether. Whether this insistence on public/gov’t option is driven by ideology or by a misplaced belief in some of the more recent superficial polling on this issue is hard to know – and it’s just plain wrong.

One thing is for sure – anyone who would place their political future in the hands of a single survey question purporting to show that Americans want Washington to jump into the healthcare business probably deserves to lose.

Um:

1. The public option is not "massively expensive." It cuts the deficit. In fact, the more robust it is (Medicare + 5), the more it cuts.

2. "Met with a resounding thud"? What planet is Luntz on? The public option is one of the most popular elements of health care reform. (See here, here, here, here, and here for just a few examples of the oodles of data showing the public option is popular.)

3. "Its inclusion brings down health reform altogether." Uh, he's right...in reverse. Multiple polls show that not only do people want the public option to be included in health care reform, they want it even if it means no GOP support. (See here, here, and here.)

4. Does Luntz really believe the popularity of the public option comes from "a single survey question"? If you don't believe the data cited above, how about this: the public option is so popular that Fox won't even poll on it.