author's note: The following is a conversation that takes place in the context of an essay. The essay is written in black text with red interludes by Mr. Joseph Dunlap and my responses to his comments in blue.
Our Republican lead House of
Representatives voted 240-179 in favor of H.R. 1105, or the Death Tax Repeal Act of 2015. Then we heard through the 24-hour news cycle the false merits of repealing the Federal Estate Tax.
How is it that a majority of people will support a measure that benefits 2 of every 1,000 deaths, or 0.2% of America? Through false and misleading Republican rhetoric the lay, and often ignorant, American public are lead to believe that the Federal Estate Tax will prevent their hard earned wealth to be fairly passed down to their next of kin. In order to get closer to understanding these issues an examination is needed of the actual cost of the Federal Estate Tax, the falseness of the Republican oratory, and finally the contradictions of the fanatical Christian-Right’s supposed platform of biblical teachings with supporting a repeal of the Federal Estate Tax
If you are reading this let me
make this very clear - you will not be negatively affected by the Federal Estate Tax. Not only will you not have to pay the Federal Estate Tax but there are benefits of having it. The Republican rhetoric to make you believe otherwise is misleading and makes a very clear case study on the importance and value of an educated society and the liberal arts.
Upon their passing, if a single American leaves an estate valued at $5.43 million or if an estate is left by a couple valued at $10.86 million then, and only then, will their heirs face dealing with Federal Estate Tax. However, it is important to understand that the only part of the estate that will be taxed by the Federal Government is any dollar after the $5.43 million/$10.86 million threshold. While the tax rate for any dollars after the $5.43 million/$10.86 million threshold is 40% the IRS reports that on average the effective rate is slightly above 16%.[1]
Upon their passing, if a single American leaves an estate valued at $5.43 million or if an estate is left by a couple valued at $10.86 million then, and only then, will their heirs face dealing with Federal Estate Tax. However, it is important to understand that the only part of the estate that will be taxed by the Federal Government is any dollar after the $5.43 million/$10.86 million threshold. While the tax rate for any dollars after the $5.43 million/$10.86 million threshold is 40% the IRS reports that on average the effective rate is slightly above 16%.[1]
The benefit is the $246 billion
incurred by the Federal Estate Tax,
albeit only 1% of the USA budget, has an impact on our function as a country
that if striped from the tax code will pass on a burden for 99.8% of Americans
to foot an extra $246 billion [or an extra $71 toward your federal taxes for
every man, woman, and child in this country]. According to the Center on Budget
and Policy Priories the Federal Estate
Tax will cover the cost of the “Food and Drug Administration, the Centers for Disease Control
and Prevention, and the Environmental Protection Agency combined” with money left over.[2]
The Federal Estate Tax also taxes what economist refer to as unrealized
capital gains, which in layman terms, are illiquid assets, or assets that
cannot be converted into cash quickly. Interestingly enough these assets, using
a variety of shelters, are often not taxed during the lifetime of their owner.[3]
It was this major justification that caused congress to permanently pass, in
1916, the Federal Estate Tax, a tax
method that was traditionally only used as war time fundraising. With the rise
of monopolistic wealth, millionaires, and a shift of power to a minority of
wealthy Americans, our congress felt it was fair to tax the estate of a group
of Americans who had benefited from the protection and resources of the
Federal, State, and Local Government and yet sheltered much of their wealth
behind tax loopholes.
There is some legitimacy to the double taxation claim. And if
the assets value were never realized in the lifetime of the owner, but were tax
protected, the same laws can be passed down to the next generation when the
assets are liquidated. In other words, tax the assets when converted to cash,
regardless of timing, upon the owner who cashed it...not when someone dies.
Doesn’t this go against the intent of the 1916 purpose of the Federal
Estate Tax? If we wait to tax the assets upon the time the owner converts it to
cash or a taxable liquid asset then are we not supporting and creating an oligarchy
class?
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It is important to point out two
very important, and often under discussed issues; 1) the unproportioned use of
Government by the wealthy and 2) the criticized 2012 comment by President Obama
stating if you have been a success, whether in business or in life, “you didn’t
get there on your own.” The two issues are interconnected and vital in framing
how the Federal Estate Tax, and
arguably politics, is examined.
Often societies want to examine
an economic system separate and without consequence from political systems. It
is important to note that while certain economic systems are often present with
certain governments, correlation does not equal causation. A free market does
not create a republic, nor did the republic create a free market. The two
systems, due to support from equal thinking political and economic enlightened
thinkers, have historical co-existed. To truly exist and prosper [economic goal
of growth] while also protecting and improving order [government goal of
existence] the two systems must cohabitate even when their natural goals of
advancement contradict each other. This dual system works when a natural
platform or overarching principals guide a society. The fight for the Federal Estate Tax calls into question
our natural American principals.
These principals can be framed
by the aforementioned two points. Both parties would agree that some form of protection
is a justification for the existence of Government. Therefore, defense, both
national and local are the roles of Government, which manifests itself through
our military and police. The other agreed upon role of Government is
infrastructure, most often represented through transportation [i.e. road
maintenance, FAA, safety, public use]. For the sake of time it is at this point
in which the question needs to be asked, who benefits from these to functions
of government more, the wealthy or the poor? While it may be easy to point to
the “welfare nation” or a liberal ideology of progressive social issues and
immaturely and quite ignorantly claim the government overwhelmingly benefits
the poor, it is incorrect. The function of Government, both directly and
indirectly, benefits the wealthy. In fact, it is Government that protects and
allows the prosperity of wealth to flourish. Therefore, the bourdon of keeping
the Government should never disproportionally fall on the poor [in this
argument the poor is simply 99.8% of America].
You put a lot of faith in what seems to be the inherent morality
of a soul-less, face-less government. Why?
We have talked about this before. If morality [defined
as a doctrine or system of conduct aka principles] doesn’t come from the bible
[and I know you argue it can come from no other place] then it must come from
the Constitution. This comes into play in my later point that American politics
no longer has defined principles to stand on. But to answer your question
straight on, I put a lot of faith in my soul-less, face-less government because
I believe in the greatness of it. I believe in the government that was forged
together as a greater whole of 13 independent colonies. The government that conquered
the west. The government that made travel from ocean to ocean possible. The
government that built a military that won the defining war in modern history.
The government that put a man on the moon. And I also recognize a government that
enslaved black Americans and counted them as 3/5th of a person, that holds back
woman and minorities, that murdered Native Americans, that stole land, that interred
Japanese Americans. But the “inherent morality” of that government recognized
those wrongs. And is still trying to change them. To better itself. America is
the greatest nation because we have the ability to look at our mistakes and
stand on the principals of a constitution to make them right. This is where
both parties are wrong. Inherent greatness does not mean to be infallible nor
perfection. Neither does it mean that we are a broken or failed country that is
not great. Our greatness has been, and will always be, our potential. And that
potential is guarded by our Constitution.
______________________________________________________________________________
As President Obama said, “you
didn’t get there on your own.” And no matter the cries from small businesses
everywhere, a small business is not built alone. No one person is Robinson
Crusoe, thrust on an island of America by yourself to survive and create a way
of life. The success and growth a business hinders on several factors;
location, dedication, business practices, quality goods or services, market
conditions, and consumers. And even then the success of a business can be told
in countless stories of support. Support that starts with the community of
parents, educators, and friends that fostered the environment of ideas and
ingenuity that lead to a business to be born. A key point to understand is that
a business that can absolutely claim to have found success with minimal support
and little to no aid from the Government will never be the business that is
affected by the Federal Estate Tax.
In fact, the businesses that are directly impacted by the Federal Estate Tax have to admit that the Government played a large
role in their success. And more importantly any business/estate effected by the
Federal Estate Tax can noy deny that
they accessed and used Government at a higher rate and with more access due to
their wealth and connections that it buys.
If you are making a point that rich folk are the primary
recipients of government services, it wasn't supported clearly to me. The
closest I thought you came to defining the support that builds oligarchs was
"parents, educators, and friends"...nothing to do with government
services. (Educators are private for the 1%). You could argue that the lay-folk
dollars make the oligarchs rich and draw the point there. If you're saying the
tax code is working for them...I mean, alright, but at one point in our nation
there was no federal income tax...and taxes were the reason we started the
revolution in the first place. So it's too easy to say Republicans are using
false rhetoric and shackling the poor when in fact "free market
economics" and a "republic" co-existed for a very short time in
our history and neither currently exist. We aren’t [a] free market at all, and
thanks to PACs and Super-PACs, the "republic" label is tenuous. In
other words, I don't think there's a clear, absolute position on the role of
taxes in American society. It's been a roller-coaster since colonial days.
Fair point.
______________________________________________________________________________
This naturally leads to the next
issue, false assumptions, exaggerations, and lies that surround the Federal Estate Tax. First and foremost,
and most closely impacted by President Obama’s “you didn’t get there on your
own” statement is the fact that small business [again most - one could almost
say nearly all - will not be affected by the Federal Estate Tax] are shielding other concerns by stating they
fear that the Federal Estate Tax
“takes their hard earned money” from being passed down to their appointed
heirs. In truth, they are making an argument against taxes, over reaching
Government, and regulations. However, while an argument can, and should, be
made on those three points, making the Federal
Estate Tax the fighting point and masking your discontent with those three
issues by supporting a repeal of the Federal
Estate Tax is not valid.
A disagreement with the factors
that allow the Federal Estate Tax to
exist is not a reason to attack or repeal it. It is even more inexcusable to be
ill-informed in your disagreement or attacks on the Federal Estate Tax. Of all the farms and small business that exist,
only 20 owned an estate tax in 2013.[4]
Furthermore, the payment for estate taxes can be paid out over 15 years and are
often reduced through tax loopholes and deductions. This serves as an example to
shine a light on the real issue, the tax code itself, which is not an IRS issue
but rather a congressional one. So a more factual rhetoric may to be attack
congressional leaders, not for the Federal
Estate Tax but rather for a reluctance to tackle larger more substantive
issues. However, in order to do that congress will find themselves at odds with
2 out of every 1,000 voters. The same 2 that are likely to be affected by the Federal Estate Tax and who happen to be
the population that funds elections.
You should address trusts. Because really, a smart person can
avoid the estate tax entirely if placing their money in a trust instead.
I think that simple sentence makes my point for me. Thank you.
______________________________________________________________________________
It seems counterproductive that
998 voters would argue and defend the right for the “earned wealth” of the top
0.2% of Americans to be passed on without taxation when “earned” would hardly
describe their path to wealth. To project middle to lower class struggles and
earning power on a class of Americans that are so far removed from normal
understanding is a hindrance for the statistical masses in America. The fact is that a majority of the estates
that are taxed are, as stated above, taxing unrealized capital gains mostly in
the forms of stock and real estate in which no taxes have been paid - due to
shelters, loop holes, and deductions - during the life time of the owner.
Listening to many pundits argue in favor of repealing the Federal Estate Tax just highlights the disparity of understanding
between average Americans, the wealthy and the top 1%. To place common blue
collar value on the wealth of the top 2% of the top 1% is foolish at best and
dangerous at worst.
The 99.8% are called "lay and often ignorant" in one
part of the essay, but "argue and defend" with 998 votes later on
[here]. Are the sheep in fact sheep, or do they get to be wolves on Election
Day? You are once again flirting with feudalism, which you know I always enjoy.
I
would answer by saying that in relation to the wealth, power, and resources available
to the top 0.2% that the “998 voters” are lay [average] and ignorant [without
knowledge or understanding of] to the life lead by the 0.2%. I can see your
notion of feudalism but I would accuse those that hold the power of Lords and
Kings of failing to fulfil their duties. Which as you know means a solid
beheading.
______________________________________________________________________________
This danger is made evident in
the swirl of Republican rhetoric that is often repeatable and catchy to hard
working Americans, and easily distributed in quick segments that are favored in
the 24-hour news cycle. Statements such as:
“It’s not fair to ask anybody to visit an
undertaker and tax collector on the same day”
“We are tacking American’s hard earned
wages.”
“The tax we collect is so small why are we
bothering?”
“We can save the same amount by closing the
IRS.”
“How can we tax the same money twice?”
“Why are we attacking the rich?”
While
this rhetoric appeals to the pathos of the typical American a simple clear
headed examination of these hyperboles show that they are thinly vailed misdirection.
None of these statements are
arguments in favor of repealing the Federal
Estate Tax, rather they are clinics on argumentum
ad hominem, or the evasion of an argument by attacking the opposition.
Further many of the evasions are false attributions. This is not a defense for
or against the Federal Estate Tax. It
is an attack on the American pathos through manipulation of ethos and a removal
of logos. Simply stated, too often the Republican answer to criticism or
critics is to appeal to the simplest emotion through the handling of
credibility by removing or manipulating logic.
Arguable the most widely used
form of appealing to the emotional core of America through logical manipulation
is the inconsistent and highly questionable use of Christianity as the bases of
arguments or counter arguments. In a cunning move, after losing the 1976 Republican
Nomination for President of the United States, Ronald Regan put together a
stunning coalition of never before joined fragments of the American population
in order to defeat the much more centrist and pragmatic George Herbert Walker
Bush in the 1980 Republican Presidential Nomination. A surprising and
unimaginable force in that coalition has been the Fundamentalist Christian
Right. The Republican nomination, much like acceptance to heaven, now must run
though Christ. However, the Republican use of Christianity mirrors man’s own
perversion of faith in order to maintain power of Church. Any hack or false
prophet can pick up a bible and use its passages to make emotional appeals to
Americans to who hold those words as infallible ordained by God; doing so does
not mean a principled belief in God, and/or Jesus Christ’s teachings. This
manipulation of circular logic has removed real sustainable debate in favor of
a divisive partisan culture that disparages the word of God and mocks lack of
political understanding of the average American.
In short, if the Republican
Party fundamentally believed they stood on the principals of Christianity, as
expressed by Christ in the New Testament, Republicans would answer and build
all political platforms to serve the teachings of Christ rather than to pay
homage and service to the billionaires that bankroll the elections in this
country. Due to power that decisions like Citizens
United have leaved on the ultra-rich this country now prays at the altar of
money. Luke 16:13 states that, “No one can serve two masters. For you will hate
one and love the other, or be devoted to one and despise the other. You can not
serve both God and money.” The American Democratic Republic of our founding
fathers has given way to the Oligarchy of our founding billionaire class.
American has no principle to
stand on. She has turned her eyes from the principles of freedom for all, she
has turned her back on the principles of God, and most of all she has turned
away from the principles laid out by our founding fathers. If either party had
a stable set of principles they would discover that issues like the Federal Estate Tax do not merit the time
and lies it has garnered.
My principles, of humanity and
faith, lead me to believe that I am here to serve. Our generation’s
responsibility to is make a better American than was given to us. Our Christian
responsibility to lead a Christ like life. While I cannot say that I personify
that, I can say that like Peter I have failed, but like Peter, I know Christ
still believes in all of us. His teachings are littered with lessons to use
wealth to serve God, to share with the poor, to be humble, to be truth seeking,
to avoid greed, to love, to not pass judgement, and most of all to treat others
as we want to be treated.
One foundational understanding of Christianity
that must be appreciated in your essay...Christians pay taxes in spite of the government not
as a means of promulgating Christ's teachings of helping the poor. Christ
followers are told to help the poor regardless of political circumstance. The
whole "Give to Caesar what is Caesar's, (Matthew 22)" and there is no
law against the fruit of the Spirit (Galatians 5). Government has a purpose
(Romans 13) that is ordained by God, but in no way bears primary responsibility
of the Christian metanarrative. So while progressive government offers
seemingly Christian ideals, there's understandable resistance to assigning a
biblical corollary to progressivism...especially if the government claims no
allegiance to God.
While I agree that the progressive movement
would be hesitant to assign a biblical corollary to their platform I would
argue that in refers there is no reason for the Christian to not assign a
political corollary to their believes. Therefore, in doing so, a realization should
be made of which party closer stands for the teachings of Christ.
______________________________________________________________________________
Supporting the Federal Estate Tax is closer to standing
on the principles that many Americans claim to stand on. The Federal Estate Tax mirrors the wishes of
our founding fathers closer than Republicans would have us believe. The Federal Estate Tax protects our fragile
experiment of a true Democratic Republic from becoming an Oligarchy that our
founders fought and died against.
Our tax system is broken. And it
needs to be fixed. Repealing the Federal
Estate Tax is not the first step. God Bless the United States of America.
I mostly read this and thought, "Ok, he wants Christian
socialism." Which is challenging because if you own the
"Christian" aspect of socialism, you gotta deal with more than the
economic part.
Which brings me full circle into the political party morality
arguments...Democrats are "more Christian" in their economic
platforms and worldly/expedient on their social platforms ("as long as it
doesn't hurt anyone"). Republicans are more wordly/expedient in their
economic platforms and "more Christian" on their social platforms
(inserting God into everything from schools to TV commercials to sex ed
classes). The great commission in Matthew 28 was irrespective of culture or
government. When mixed, I don't see any obvious, non-debatable
"Christian" path forward. That's why our citizenship is in heaven
(Phillipians 3:20). If gov't systems were that important to furthering the
gospel of Christ, then he would have done something about government when he
was here. He didn't. God uses governments to further his will when needed (see:
Joseph and Pharoah, Moses, Saul, David). Or he lets it lie, but doesn't forget
his people (kings of Israel, Babylonian captivity, Assyrian captivity).
Is it fair to say
then that since Biblically there is no government importance to furthering the
Gospel of Christ then it is futile to use Christianity as a reasoning to
inherently change government? Rather, the morality of Christians would better
them to be positive agents in and out of government. Therefore, is it that the separation
of Church and State is not only constitutional but biblically logical?
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[1] IRS website accessed
4/17/15
[2] http://www.cbpp.org/cms/?fa=view&id=2655
accessed 4/17/15
[3]
ibid
[4]
ibid
