Wednesday, August 02, 2006

Careful KvM, Your Ignorance is Showing


My buddy Andy at KvM is pushing the ole Right Wing Estate Tax deception again:
The Estate Tax is a terrible thing that destroys small businesses and family farms and must be done away with permanently.
Now, those of us that pay attention know the truth. Let's look at the facts from the American's for a Fair Estate Tax (PDF):
A recent Federal Reserve Survey of Small Business Finances indicates that the average net worth of small businesses is $702,566. Only 4 percent of small businesses have a net worth of more than $3.5 million, the amount exempted from taxation by 2009, thereby exempting 96 percent of all small businesses.
Maybe we can agree that 'destroy' is too harsh of a word to use. How about family farms:
The USDA’s Economic Research Service reported that the average farm household net worth ranged from $576,400 for small farms to $1.5 million for very large family farms. The estate tax already exempts $2 million of all estates, and the exemption level rises to $3.5 million by 2009 (double for couples). The New York Times has reported that the American Farm Bureau could not cite a single case of a family farm lost due to the estate tax.
Yeap, for a tax that is destroying family farms, not a single case was discovered to support the claim of destroying even one.

What's the bottom line here:
Myth: Many average Americans people are hurt when forced to pay the estate tax.

Reality: 98 of every 100 people who die face no estate tax whatsoever. Only the super-wealthy – the richest 2 percent of Americans – are subject to the estate tax. By 2009 when the exemption level rises to $3.5 million, it is estimated that less than one-half of one percent of Americans will have to pay the estate tax.
Yeap, half of one percent. And the revenue lost if the tax is repealed that will protect the mega rich will have to be spread out amongst those whom the Right are actually trying to protect.

So we can debate the punitive nature of this tax if you'd like, but don't let anyone tell you that it is destroying small businesses and family farms. This is nothing more than GOP smoke and mirrors so that their Richie Rich friends* have more money to donate to their campaigns.


*an estate tax repeal would save the estate of Vice President Cheney between $13 million and $61 million, according to the publicly available data on his net worth. It would save the estate of Defense Secretary Donald Rumsfeld between $32 million and $101 million. The estate of retired Exxon Mobil chairman Lee Raymond would pocket a cozy $164 million. As for the late Sam Walton's kids, whose company already makes taxpayers foot the bill for the medical expenses of thousands of its employees, the cost to the government for not taxing their estates would run into the multiple billions.

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