Reply #5: links to support an estate tax, and posts

[RainDog]

Estate tax link base

http://www.arktimes.com/030110coverstorya.html
"The argument for repealing estate taxes has been that the tax often forced people who inherited family farms and busineses to sell the farms and businesses in order to pay the tax, but there is almost no record of that happening. Farms and family businesses make up less than 3 percent of the estate tax filings in the United States. Estate taxes on family farms and businesses can be stretched out over 14 years."

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"Keep in mind that the inheritance tax, even before President Bush took office, was paid by fewer than 2 percent of all estates. Reforms then in progress would have further narrowed its reach by exempting estates of up to $1 million ($2 million for couples.) Farmers? During the debate in 2001, the American Farm Bureau couldn't cite a single family farm lost to the estate tax.

Shopkeepers? Turns out small business owners pay less than 1 percent of all estate taxes.

No, the ones with a big stake here are the fortunate 50,000--the tiny fraction of U.S. families who count their wealth in eight figures or more."

http://www.chicagotribune.com/news/printedition/chi-0311210415nov21,1,623146.story?coll=chi-printcommentary-hed
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From United for a Fair Economy\'s Myth vs. Fact regarding the Estate Tax...

Myth: The estate tax must be repealed because it forces family businesses to close.
Fact: This issue has been wildly exaggerated. Only 3 of every 10,000 people who die leave a taxable estate in which a family business forms the majority of the estate. A recent Federal Reserve study found that the average small business is worth $702,566, well below the level at which estate taxes kick in. Virtually all small family businesses can be protected by simply raising estate tax exemption levels.

Myth: The estate tax must be repealed because it forces family farms to sell.

Fact: As with family businesses, this issue has been distorted. Only 3 of every 10,000 people who die leave a taxable estate in which a farm forms the majority of the estate. On April 8, 2001, the New York Times reported that the pro-repeal American Farm Bureau Federation could not cite a single case of a family farm lost due to the estate tax. Like businesses, family farms can be protected by raising exemption levels.
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Facts

* Farms —Only three of every 10,000 people who die leave a taxable estate in which a farm forms the majority of the estate. On April 8, 2001, the New York Times reported that the pro-repeal American Farm Bureau Federation could not cite a single case of a family farm lost due to the estate tax. Like businesses, family farms can be protected by raising exemption levels.

* Businesses—Only 3 of every 10,000 people who die leave a taxable estate in which a family business forms the majority of the estate. A recent Federal Reserve study found that the average small business is worth $702,566, well below the level at which estate taxes kick in. Virtually all small family businesses can be protected by simply raising estate tax exemption levels.
Pat Wolff, a D.C. lobbyist for the American Farm Bureau says,

"The government can take almost half of your belongings when you die." However he could not say how many families have actually been forced to sell off their farmland by the estate tax. His response to the question was, "We don't have those numbers and have never seen those numbers. All of our economic arguments are anecdotal."

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Here's some FACTS on the estate tax, thanks to United for a Fair Economy, to help set the record straight.
http://www.ufenet.org/estatetax/ETMythsFacts.html
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The following is found at this site: http://www.ufenet.org/estatetax/ETMythsFacts.html

Myth: The estate tax is a “death tax.”

Fact: The estate tax is not a tax on death. It’s a tax on the transfer of large amounts of money. Ninety-eight percent of Americans who die pass their estate on to their heirs completely tax-free — in fact, they get a valuable tax break on capital gains. Zero estate tax is charged on assets left to a spouse or to charity.

Myth: The estate tax must be repealed because it forces family businesses to close.

Fact: This issue has been wildly exaggerated. Only 3 of every 10,000 people who die leave a taxable estate in which a family business forms the majority of the estate. A recent Federal Reserve study found that the average small business is worth $702,566, well below the level at which estate taxes kick in. Virtually all small family businesses can be protected by simply raising estate tax exemption levels.

Myth: The estate tax must be repealed because it forces family farms to sell.

Fact: As with family businesses, this issue has been distorted. Only 3 of every 10,000 people who die leave a taxable estate in which a farm forms the majority of the estate. On April 8, 2001, the New York Times reported that the pro-repeal American Farm Bureau Federation could not cite a single case of a family farm lost due to the estate tax. Like businesses, family farms can be protected by raising exemption levels.

Myth: The estate tax is “double taxation.”

Fact: The phrase “double taxation” is a rhetorical device meant to confuse the issue. Money is taxed any number of times as it cycles through the economy, generally during transactions. Workers, for example, pay income, payroll, and sales taxes on their wages. What’s more, the bulk of the largest estates, which consist of unrealized capital gains, would never have been taxed were it not for the estate tax.

Myth: The estate tax “confiscates” over half the value of all estates.

Fact: For 98% of Americans, the estate tax takes away nothing. For the other 2%, the average effective tax rate is 19%.

Myth: The estate tax discourages work and inhibits capital formation.

Fact: There is no hard evidence that U.S. capital accumulation has been held back by the estate tax. There is evidence, however, that large inheritances do reduce work effort and saving among recipients.

Myth: The estate tax raises little revenue, so repealing it will have no effect.

Fact: In 2001, the estate tax raised $28.4 billion for the federal government. That’s about 7% of the non-military discretionary budget. Permanent repeal will cost at least $796 billion between 2012 and 2022. This will deprive the Treasury of resources that could be used to address pressing needs such as safeguarding Social Security, improving education, or extending prescription drug coverage for seniors.

Myth: The wealthiest Americans use tax shelters to completely avoid paying estate taxes.

Fact: Most estate tax revenue comes from the top 0.15% of Americans – the few thousand people each year with estates larger than $5 million. In 2000, an even smaller and wealthier group, the 549 people with estates greater than $20 million, paid almost a quarter of all estate taxes that year – for an average tax of $10.4 million per estate.

Myth: The estate tax doesn’t raise enough revenue to cover the cost of collecting it.

Fact: This staple of talk-radio shows is based on an imprecise guess made by a researcher back in 1987. It was based on faulty assumptions, and is easy to disprove. While the estate tax has raised about $28 billion in each of the last few years, the budget for the entire Internal Revenue Service amounts to only $8 billion a year.

Myth: The estate tax is unfair.

Fact: Unfair compared to what? Should revenue come from a tax on wages? Should it come from sales tax? Or should it also come from the estates of multi-millionaires? The estate tax is eminently fair. It is collected from those most able to pay, and it encourages the recycling of wealth through the non-profit sector. It limits the size of family dynasties that would otherwise distort our democracy and shrink economic opportunity for succeeding generations.