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Letters from July 12, 2006
pay their fair share
Mr. Bender (guest column in last Saturdays CK Reporter) focuses on the need to ensure the super-rich pay their fair share, but his arguments are fact-free and typical of class warfare that is actually harmful to our economy. His numbers are fabrications that dont add up unless you figure that no rich person will shelter his assets and you add up dozens of years of possible revenues that are very unlikely to occur.
First - the amount of revenue raised by estate taxes is extremely small; the super-rich, like Bill Gates and Warren Buffet, while supporting the concept of estate taxes, they actually avoid most of the amount that would come due by setting up trusts to protect their money from the government. Watch what the super-rich do, and you will see that they arent worried about the estate taxes, and they dont pay much, if any. Consider wealthy families such as the Kennedys they have a wonderful shell game supported by astute tax lawyers who help them protect their own mega-millions, while they push for confiscatory rates to gouge the new rich who only have a few million.
In the 1990s, Congress passed a luxury tax to tax the wealthy as they purchased yachts and other non-essentials. Instead of bringing in the expected revenues, it actually lost revenue, because the rich decided not to buy those things, and the yacht industry almost folded. It was class warfare, but the Democrats succeeded in harming the working people. High estate taxes actually create problems as people seek to avoid the tax bite. Some economists believe that estate taxes have a negative effect and more revenues would be generated if the estate tax was fixed so that the total bite was reduced and was more in line with capital gains tax rates.
The estate tax falls heaviest on the small business owner who lacks the understanding or money to pay for estate planning that the very rich pay for. The small businesses or family farms are destroyed when the tax man comes, as the family must sell off the assets to pay the high taxes but that is the goal of unions and large corporations who claim that their support for the estate tax is principled when it is anything but!
I will support estate taxes when the Kennedys and the Kerrys pay their fair share, and if the tax laws will ensure that Bill Gates estate will be taxed at the same rate as a small business owner, without the legal loopholes that are inserted by senators like Murray and Cantwell, designed to protect their super-rich friends while allowing them to engage in demogoging the hard-working people who create most of the jobs in the United States.