Posted on 06/12/2002 7:02:27 PM PDT by StopDemocratsDotCom
WASHINGTON (AP) - Senate Democrats dealt defeat Wednesday to President Bush ( news - web sites)'s call for permanent repeal of the estate tax, and Republicans signaled plans to turn the vote to their advantage in the fall campaign for control of Congress.
The vote was 54-44, six short of the 60 required under Senate rules to approve the measure, which Republicans said represented simple fairness and Democrats derided as a giveaway for the superrich.
"Strip it all away, this is a tax relief for billionaires when we have a very big deficit and we have other priorities," such as health care, education, Social Security ( news - web sites) and Medicare, argued Sen. Byron Dorgan ( news, bio, voting record), D-N.D.
Sen. Phil Gramm ( news, bio, voting record), R-Texas, countered that opponents of the repeal measure "believe it is worth forcing people at the death of their parents to sell off their life's work to give half of it to the government."
The president expressed disappointment. "It is wrong that, as a result of a quirk in the law, millions of Americans will be subject to the death tax beginning at the end of the decade," Bush said in a written statement. "The Congress must fix this unfair tax and provide families with certainty so they can plan for the future."
Democrats advanced two alternatives in the run-up to the final vote, both of which fell short of the 60-vote threshold required by Senate rules.
One option, which got 38 votes, would have made the tax repeal permanent for all but the largest estates — those over $3.5 million for individuals and $7 million for couples. The second, which gained 44 votes, would have added permanent relief for all family-owned farms and small businesses.
Gramm belittled the Democratic tactics, saying their proposals were not designed to help taxpayers, but were "about protecting 40 senators by giving them a fig leaf when they vote" against killing the tax.
The repeal measure was passed by the House last week on a vote of 256-171 and drew the support of 41 Democrats, an indication of the political potency of the issue in rural areas.
"It's very much an issue in the campaign for folks who vote against it," said Ginny Wolfe, spokeswoman for the GOP senatorial campaign committee. "Is this an issue which on its own will make or break a single election? Probably not. It's an additional burden on vulnerable Democrats who vote the wrong way."
"Republicans will try but they're going to have a hard time" making use of the issue, countered Tovah Ravitz-Meehan, spokeswoman at the Democratic campaign committee. "Being fiscally responsible" will be attractive to voters, she said.
The bill drew the support of 45 Republicans and nine Democrats, including three who are on the ballot this fall — Sens. Max Baucus of Montana, Max Cleland of Georgia and Mary Landrieu of Louisiana. Three other Democrats facing tough challenges — Sens. Paul Wellstone of Minnesota, Jean Carnahan of Missouri and Tim Johnson of South Dakota — voted for at least one of the Democratic alternatives.
Voting in opposition were 41 Democrats, one independent and Republican Sens. Lincoln Chafee of Rhode Island and John McCain of Arizona.
Congress approved a phase-out of the estate tax last year as part of the major tax reduction that Bush pushed to passage in his first few months in office. To conform with Senate rules, though, the legislation expires on Dec. 31, 2010, meaning that the levy would be resurrected in 2011.
As a second act, Bush has prodded Congress to pass new legislation making the cuts permanent. The GOP-controlled House hastened to comply, first passing an overall repeal measure, and then, when Senate Democrats refused to schedule a vote, breaking the bill into pieces.
Even then Democrats made no move to hold an estate tax debate willingly, but were maneuvered into it weeks ago by Gramm. For his part, Daschle picked the moment most likely to emphasize the Democratic contention that the bill would harm the economy.
He brought the issue to the floor on Tuesday, only a few hours after the Senate had pushed through legislation to increase the federal debt limit, a fact that Democrats pointed out over two days of debate.
Both sides used well-rehearsed arguments.
"Should death be a taxable event? I emphatically believe the answer should be no," said Sen. Wayne Allard ( news, bio, voting record), R-Colo. "If we want to help farmers and ranchers and if we want to help small business owners we need to kill the death tax," he added, using the term that Republicans employ to describe the estate tax.
But Dorgan said that unlike a year ago, when Bush's first tax cut measure was passed, "the country has an economy that's in some trouble and we now have deficits for years and years into the future."
Democrats produced figures showing the repeal would cost the government more than $750 billion in the decade that begins in 2011, and Sen. Jack Reed ( news, bio, voting record), D-R.I., said state treasuries would be affected, as well.
The House Wednesday, for the seventh straight year, rejected a proposed constitutional amendment requiring a two-thirds majority by both houses of Congress to raise taxes. The vote on the GOP-backed measure was 227-178, well short of the two-thirds majority needed to approve a constitutional amendment.
Rep. Pete Sessions ( news, bio, voting record), R-Texas, sponsor of the measure, argued that a super-majority was appropriate because "raising taxes should be an absolute last resort, not an easy fix for excessive government spending." But Democrats said the amendment would undermine the democratic system of majority rule and make it more difficult to close loopholes used by tax dodgers.
The education bill was a good one, IMO. Bush didn't ask for vouchers until the schools had been measured for 3 years. He got everything else. If the schools are failing in 2-3 years, he will get the vouchers.
The sunsets on the tax cuts are all part of this same stuff with eliminating the estate tax. It's probably easier to eliminate the sunset provisions one-by-one than to try to eliminate all of them at once. And the estate tax is one of the worst sunsets - the tax would be gone in 2009 and come back in 2010. Can you imagine the number of deaths on 12/31/09??
Only on their terms. What about this:
Democrats advanced two alternatives in the run-up to the final vote, both of which fell short of the 60-vote threshold required by Senate rules.That was a compromise bill offered by Kent Conrad. Among those voting against this permanent repeal of the estate tax were:One option, which got 38 votes, would have made the tax repeal permanent for all but the largest estates — those over $3.5 million for individuals and $7 million for couples.
Frist, Bond, Gramm, Nickles, Grassley,Santorum, Hagel, Sessions, Hatch,Shelby, Hutchinson, Cleland Kyl Stevens Cochran Landrieu Thomas Domenici Warner Ensign McConnell Wyden
Those are just the big name GOPers so adamant about protecting the small businessmen and women of America. As Phil Gramm once said:
"I think small business is to people and government today what the small farmer was during the time of Jefferson," said Sen. Phil Gramm, R-Texas. "Small business is really the face of American prosperity."
So why not compromise? If they had voted for the Conrad bill, the estate tax would be repealed today for ALMOST everyone. I have read that the entire estate tax AS IS affects 2% of the population. I wonder how many people would have been affected under the Conrad version. Can you explain any of this?
This money is not being taxed on death, but as income to the beneficiaries of an estate. A significant portion of the value of all estates, and a majority of the value of the largest estates, have NEVER been subject to either the income or capital gains taxes even once. Most of this income is and has been sheltered between the generations. The estate tax completes the income tax; much of it is applied to money that has never been taxed as income in the first place. --from njnonprofits.orgAnd if you just think that a certain amount of money is "enough", well, $7M isn't a lot for a farm or business these days, and there is no COL provision in the Dem bill. $7M will be even less in 10 years. Most people would like to leave their entire business to their children.
In 1998, only 1.4 percent of the taxable estates included a farm that accounted for at least half of the gross estate, and only 1.6 percent included a small business. In estates valued at less than $5 million, farms and small businesses accounted for less than 4 percent of the assets. Right now, only 6 out of 10,000 people who die leave a taxable estate ($675,000 or more) in which a family business or farm forms the majority of the estate.Current law also provides for higher estate tax exemptions for farms and family-owned businesses. The exemption for most estates that include such a farm or business is $1.3 million. A couple can exempt up to $2.6 million. Also, beneficiaries can defer the payment of estate taxes on businesses or farms for up to 14 years if the value is at least 35 percent of an estate.
--from njnonprofits.org
And, I might point out that if small businesses and family farms were a priority concern, there was a Democrat proposal which according to this article "gained 44 votes" and "would have added permanent relief for all family-owned farms and small businesses."
Now speekinout, I realize it's a bit much to post this anti-estate tax repeal information on Free Republic. But here's how I see it. I don't really know how many people are affacted by the estate tax. I don't know how many "family farms. I know that in Georgia, for instance, the average family farm is valued at 600K, which is well below 7 million. I know that most of the small businesses listed for sale go for less than 1 million. But I don't have well established, scientifically collected data. So how do I know that Phil Gramm or Don Nickles is telling the truth?
Isn't it possible they might be fudging the facts? And what would it mean if the people who represent us, our party, the GOP, learned that we are ignorant people, that we will swallow what they feed us because we believe whatever they say and nothing the Democrats say. What would that mean? It seems to me it would mean that the GOP would be unaccountable. The people who need to hold them accountable are the people who DO vote for them, not the ones who don't. Same goes for the other side, the Democrats. Blind allegiance is foolish.
So, you can go on adhering to your principle that "it's your money" if you like. It's a nonsensical idea, in my opinion. Of course it's your money. Since when do you get taxed on someone else's money? Tax policy is a battle for power, and that's all it is. And I would be ashamed and embarassed if Phil Gramm or Don Nickles or Kent Conrad or Hillary Clinton could come on FR, and see that people are blindly following whatever they are told without even checking the facts, or looking up the data, before taking a position. It is embarrassing. But then, if you've ever heard Sean hannity's man on the street interviews, I guess you will agree that the national constituency is already an embarrassment.
You are obviously very ignorant about farming. It does not take much for the assets of a farm to be above $7,000,000. Land is valued at about $1,500/acre around here. Thus, you only have to own about 5,000 acres. Throw in a few $300,000 tractors and a couple $500,000 combines and all the other equipment required to operate a farm and it doesn't take long to get well above $7,000,000 in assets. Keep in mind those are ASSETS not cash so where exactly are my brothers supposed to come up with the big fat check the Gov't is going to request upon my father's death? Yup, you got it. I guess they will just have to sell off some of their livelihood!!! How ANYONE can defend that is beyond me.
But I guess those farmers don't deserve it. The assets should be sold so the Gov't can give it to the have nots. After all, they are the one's who were out there slaving away in the heat and humidity sometimes for as long as 18 hrs. a day.
People like you make me so angry! It is the principle of the matter. It does not matter if it affects you personally or not. This tax should repealed because it is unjust, unfair, and UNAMERICAN!! PERIOD! Hard work should be rewarded not penalized. I am so sick of this kind of crap!
Okay, rant over.
Now he has a family farm with assets in total of well over $7,000,000. PLEASE TELL ME EXACTLY WHAT RIGHT THE GOV'T HAS TO STEAL THIS UPON HIS DEATH?!?!?
I congratulate your father on his accomplishments. To answer your question, the right of the government to raise taxes is found in Article I, Section 8 of the US Constitution:
The Congress shall have Power To lay and collect Taxes
The right of the Congress to tax income is explicitly granted in the 16th Amendment to the Constitution:
Amendment XVIThe Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration.
Perhaps you find this answer snide, but this is a conservative forum, where we supposedly look to the plain meaning of the Constitution for our anwers. There's your answer. The government, according to our system of government and in compliance with the law, is not "stealing" anything. It is laying taxes. Further, it is the inheritor who is taxed, not the deceased. If you inherit the farm, you will be taxed on it. Thanks to the GOP turning down the Conrad amendment, you will be taxed more than you otherwise would have been.
I don't need your sorry "if it doesn't affect me why should I care" ass coming in here and telling me that this does not affect ordinary people.
I didn't say it doesn't affect "ordinary people", did I? I don't think I would use that phrase. I cited statistics which show the tax as having an effect on a very small segment of the population. If the statistic is wrong, please provide more accurate data. I welcome it.
You are obviously very ignorant about farming. It does not take much for the assets of a farm to be above $7,000,000.
I don't have access to data on the worth of farms. I ran across data for the state of Georgia, which puts the average farm at 600K, well below 7 million. If you have data on farms nationally, I would love to see it. I don't see why anyone would take a position on the effect of this bill on farms without having that data(unless, as in your case, one will stands to gain significantly from the repeal) , although I see there are plenty of people willing to do so.
But I guess those farmers don't deserve it. The assets should be sold so the Gov't can give it to the have nots.
What the government does with its revenues is a separate problem. I think it is the fundamental problem. But it is irrelevant. The fact is that the government will take on its obligations, and someone will have to pay for it. The only way to stop it is to cancel some of those obligations. Unfortunately, by far the biggest part of the pie is Social Security and Medicare, and they are getting bigger still.
People like you make me so angry! It is the principle of the matter. It does not matter if it affects you personally or not. This tax should repealed because it is unjust, unfair, and UNAMERICAN!! PERIOD!
Let me use a baseball analogy. I don't know if you know baseball, but there are two leagues, the AL and the NL. The NL plays by the traditional rules. In the AL, back in the 70's they invented the DH, the Designated Hitter. The DH takes the place of the pitcher in the batting order, because pitchers are lousy batters. The NL never adopted the rule.
Now, let's say I am a manager in the AL and I hate the DH rule. I think it goes against the tradition of baseball, degrades the game, and is principally and fundamentally wrong and bad for the sport. But all the other teams in my league, all my competitors, use the DH, and score more runs than they would without the DH. What should I do?
I don't HAVE to use the DH. I could use the pitcher, on principle. I will lose more games, and give all my competitors an edge over me. It won't induce any of the other teams to stop using the DH. It won't elevate the principle. It will simply cost me. Why do it?
That's how I see this situation. The government appropriates money. Once that happens, it's spent. And once it's spent, someone will have to pay for it. Why should I support a bill that will result in me paying more taxes on my income, so that someone else can pay less? Why should I transfer someone else's tax burden to me? Principle? What principle is that? The principle of being a sucker? Farmers get a lot of money from the government, if I am not mistaken. Hell, how many billions of dollars went out this year alone to farmers? I'll tell you what, once I see farmers marching on Washington demanding an end to crop subsidies and all the other goodies, I'll march with them to relieve them of their tax burden.
Hard work should be rewarded not penalized.
Actually, the government should stay out of the way as much as possible. I don't believe "hard work" should be especially rewarded. Productivity should be rewarded in the free market. If some fella can get rich without breaking a sweat, he is no less entitled to the rewards than someone who busts his hump 18 hours a day. Don't mistake movement for progress. What the government should do is appropriate money necessary for doing its business, and lay taxes to come up with the necessary loot. We all get our income taxed, and we all think we are taxed too much, but each of us has some gubmint program that we aren't willing to give up, and when you add them all up, it costs what is costs, and the government taxes what it taxes.
Consider this: With all that taxation going on, we are still billions and billions of dollars in debt. And demographically, that is going to get WORSE. I am 34 years old. I have been hearing with increasing regularity ever since the early 90s that I will end up paying an incredibly high tax to pay for the boomers Social Security benefits. I could scream and shout WHAT GIVES THEM THE RIGHT??IT'S UNJUST!!! Are any retirement age farmers going to step up and take on that burden for me? I doubt it. And why would they?
Okay, rant over.
I see your rant and raise you one :-)
The 16th Amendment says refers to taxing income not estates. Plus that income has already been taxed once.
Section 8. The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States; </P
The estate tax is not "uniform" as not all people have to pay it. Of course, the progressive income tax is not uniform either.
BTW, you are right in your "hard work" versus productivity argument. There should not be a death tax on any estate regardless of how it is earned. I didn't mean to apply that I meant otherwise. I didn't word that very well. But hard work usually leads to productivity. Atleast that has been my experience.
The lifetime exclusion amount on estates is only $1,000,000 right now which increases to $1.5 million in 2002 and 2003. It does not take a very large farm to meet that amount and the estate is not in liquid assets which means the inheritor has to sell off the business assets to cover it. That makes it kind of hard to sustain a business.
Don't have the farm data you requested, but somehow I suspect farms in Georgia are not as large as those in Kansas, but I could be wrong.:-)
You will be happy to know that my father is completely AGAINST farm subsidies. He thinks the markets should be left to operate freely. If he wanted farm subsidies wouldn't he vote Democrap? Considering this discussion, you are much more likely to vote Democrap than he or I.
Besides, the death tax raises very little net revenue, if any, after the cost of assessing it. It is simply a redistribution of wealth. Our country has the second highest death tax in the world and I thought this was the USA we were living in!
The estate tax is a tax on income. When someone inherits an estate, it is treated as new income. The inheritor is then taxed on the new income. Mincing words, perhaps, but it's a legal tax on income.
If it is raising very little revenue, it can't be redistributing very much wealth.
"Treated as", in this context, means of course that it is defined as "income", by the government.
The inheritor is then taxed on the new income. Mincing words, perhaps, but it's a legal tax on income.
Yes, of course. The government calls something "income" and then taxes it. By this standard then, no taxes on anything whatsoever are unconstitutional as long as the government defines what they are taxing as "income". Kinda takes the teeth out of that constitutional clause altogether, doesn't it? :)
Anyway, overall Huck I just wanted to say that your posts on this thread are very good and reasonable. Many who are arguing with you do not appear to be digesting what you are saying, because they opposite the estate tax so vehemently. For the record, so do I, and perhaps so do you, but you are making tons of valid points here. And this is coming from someone who (as I recall) has argued with you a lot before. ;) Best,
And should the children be forced from their home just because a parent died? It's the same thing to say they should lose the family business and their source of income.
I don't know if your numbers are right or not. But would you think the numbers mattered if the law affected only you? Fair is fair, no matter how many people are affected.
I agree that we shouldn't be blind to party politics. But the "soak the rich" mantra is the most poisonous of all.
My favorite example of how this death tax is wrong has to do with the Wash. Redskins. Jack Kent Cook couldn't leave the team to his son, John, even though John had run the team for years. He thought he had managed to leave John enough money to buy the team. Alas, that didn't work. Now the team is owned by bratty danny. And it hasn't been the same since. If the tax laws had allowed John to keep the team, a lot of us would have been happier.
And the amount of money the Feds got from that disaster probably financed maybe 2 minutes of the gov't.
We do tax income, but if you want to tax assets, be consistent. And tax assets every year.
Well, at least the Democrats are very up front and honest about their government thievery. They want to confiscate the money up front and spend it, in contrast to the republicrats, who want tax cuts implemented over a decade, which then disappear.
Why would they do that? Because the GOP is spending money like crazy, worse than the democrats and Clinton did, and they know the bill will have to be paid. They just want to pay it after they leave office.
Republicans overall are worse than Dems. The dems wage class warfare up front. The GOP pays lip service to conservatism, smaller government, etc. then break all promises now that they are for the most part in power. And Bushie doesn't care, he is all for spending our money.
If you don't see the difference between the two parties, then you, my friend, are blind. Facts won't help you, so I won't give any more of them.
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