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Obama's Huge Would-Be Gift To The Scions Of The Super-Rich
WASHINGTON -- Millionaires and billionaires would reap big rewards if President Obama's tax cut deal becomes law, but thanks to the agreement's estate-tax provisions it's their heirs who will make a real killing.
The estate tax is a particularly hot-button issue with progressives who see the increase of income inequality and loss of social mobility as being the main underlying problems with modern American society. (Credit: Reuters/Rick Wilking) The Obama concession that's getting most of the attention in the
media is the one that would extend the Bush income tax cuts even for
households making over $250,000 a year. That's a gift to your average
millionaire of $139,000 a year for the next two years.
But it's the estate tax cut which, despite its relatively lower public profile, has proven even harder for congressional Democrats to swallow. Obama's deal would free an estimated 40,000 of the biggest estates in the country each year that would otherwise have been subject to the tax from paying a single penny.
And the approximately 3,500 estates that would remain subject to the tax at all -- consisting of the top 0.14 percent of all U.S. estates each year -- would pay at a much lower rate.
Compared to current law, that would amount to a gift in 2011 averaging about $3.5 million for each of the thousand or so estates worth $20 million or more.
The total cost to the taxpayers would be about $23 billion a year.
Those estimates are based on an analysis by the Tax Policy Center, a Washington research group.
Estate tax rates have been all over the map in recent years. As one of George W. Bush's last gifts to the incredibly wealthy, the estate tax is actually zero in 2010, meaning even the estates of such billionaires as New York Yankees owner George Steinbrenner paid nothing. (Cost to U.S. taxpayers for Steinbrenner alone: Something like $500 million.)
Under the current law, however, the 2011 estate tax was set to return to the 2009 level of 55 percent for estates over $1 million. That's still considerably less than the 77 percent rate that applied from 1942 to 1976 on estates over $60,000.
Obama had previously proposed lowering the rate to 45 percent for estates over $3.5 million in 2011. The deal he struck with Republican Majority Leader Mitch McConnell, however, reduces the rate yet further, to 35 percent, and only for estates over $5 million. (All the minimums are for individual estates; the limits double for couples.)
The estate tax cut may end up being the biggest obstacle to winning Democratic support for the package. House Speaker Nancy Pelosi on Tuesday called the lower estate tax "a bridge too far." Rep. Chris Van Hollen, head of the Democratic Congressional Campaign Committee, told MSNBC on Wednesday: "This provision makes it "very, very difficult for me to support in its current form." The House Democratic caucus on Thursday non-bindingly rejected the overall deal, with the estate tax cut a key factor.
The estate tax is a particularly hot-button issue with progressives who see the increase of income inequality and loss of social mobility as being the main underlying problems with modern American society.
And the nation's more benevolent billionaires are not just vowing to give away at least half their fortunes, they're asking to have their estates taxed. (Among other things, high estate tax rates encourage charitable giving, which is of course tax free.)
Omaha investor Warren Buffett told the New York Times in 2001 that the estate tax plays a critical role in promoting economic growth by helping create a society in which success is based on merit rather than inheritance.
Repealing the estate tax, Buffett said at the time, ''would be a terrible mistake,'' the equivalent of ''choosing the 2020 Olympic team by picking the eldest sons of the gold-medal winners in the 2000 Olympics."
He continued: "Without the estate tax, you in effect will have an aristocracy of wealth, which means you pass down the ability to command the resources of the nation based on heredity rather than merit.''
Or, as Karen Dolan, a fellow at the Institute for Policy Studies, put it in her Huffington Post blog on Thursday: "Merry Christmas, Paris Hilton."
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56 Comments so far
Show AllBe it Russia, China, all the Arab dictatorships or Empire USA, without deadly force the rich who dwell within -- would not survive one day.
For it takes but one gun to protect a farmer’s land, a thousand guns to protect a gold mine owned by the rich.
Obama's "temporary payroll tax holiday" provision that cuts Social Security funding has more far reaching negative consequences than the estate tax provision.
Now that Obama's catfood commission's attempts to unravel Social Security have stalled, Obama's plan B for gutting Social Security is the "temporary payroll tax provision".
Republican Senators Corker (TN) and Johanns (NE)told the press that whenever Democrats attempt to end the "temporary payroll tax holiday" the Republicans will scream TAX HIKE and the Democrats will make the "holiday" and Social Security funding cuts permanent. Republicans will then claim that Social Security is underfunded and end the program.
Contact tour US Congressional Representative and tell them to vote against the "temporary payroll tax holiday".
Yeah, right! Bob Coker, Lamebrain Alexander, and Little Jimmy Duncan. Talk about taxation without representation! Why bother?
Arrrgh___MD
Now even Hope and Change is assaulting our Social Security. Can we secede now?
Barry HOPES he can CHANGE SS into a money pile for Wall Street.
John, theyvHAVE the guns. And an army to back it up. DN had a segment earlier this year and the guy stated that their army is bigger then the US's. Don't forget the sobic cannons desugned to burst eardrums. They were used on the crowd at the G20 in Canada. Turned them down but they can also fry a person. The FEMA camps are not CT. And look at all the EOs written in the last 30 years. They can separate families, consfiscate food stuff and a shit load of other things. Like forced labor. You are right that it would take one shot. But getting near to any would be suicide. Don't forget the military unit Bush created. Hopefully by then the troops will see family members and remember their oaths about enemies. Foriegn and DOMESTIC. They can declare Martial law too. Remember Bildenburg? I heard they are a front for about 7 billionares. Their goal is to decrease the world's populstion from forced vaccinations to drugs. Chips are being inserted now to track drugs. Soon it will be mandatory to get vaccines and take drugs. Natural News.com.
We don't stand a chance thou many brave people will die. I won't be one of them. I confess to being a coward.
The tax cuts that are set to expire were a bribe for tax payers to go along with Bush's illegal war.
It created no jobs and the war debt along with the ponzi bank schemes tanked the economy.
If all the tax payers had to pay for the war now instead of more borrowing and government debt for the future, I think it would revitalize the Peace Movement similar to how the Draft did in the 60's.
We saw the movie "Inside Job" last night and it explains how this criminal economy is run and it didn't even mention the lost trillions in black budgets in the Pentagon during Clinton and the lost trillions since for the war Economy.
We have a traditional Progressive tax structure or it is supposed to be, so why would anybody but the greedy oppose the rich paying a higher percent than the average tax payer?
We are still being told we can make something out of nothing, but even the big Bang theory which claims that indirectly is being questioned by some free thinking scientists.
The War and its debt will kill us directly.
Both ramping up the war debt and the continuation of paying the rich to be rich are firmly on Obama's plate. He had little credibility before this performance. Now he has none.
Thanks for the reminder about the connection between Bush's illegal wars and the tax cuts for the rich. I guess it was their version of guns and butter. So many outrages and only so many neurons.
Hey Clinton bent over and got rich, why not O?
Yea their daughter married an investment banker. The whole family is marinated in the corrupt government/bankster collusion.
Isn't Chelsea a hedge fund manager now?
Yes and married to one also - hedge hog love!
Her father-in-law (Ed Mezvinsky) was convicted and imprisoned for five years for banking fraud.
You can't make this sh-t up.
America suffers a truly corrupt political class.
Yes, the movie interviewed Ivy league professor economists who were payed hundreds of thousands for reports on how the ponzi schemes, default swaps and others were great for the economy and now we have Obama who will have a millionaire's estate giving himself future tax breaks.
It is typical conflict of interest as pointed out in the film.
I've always believed that was the plan with Obama. I cited a link on another article about this yesterday, but this just popped up this morning. For all those bots saying the only problem with Obama is that he has to get rid of Clintonites can now take solace in this:
The Clinton Crew Takes Over
http://www.huffingtonpost.com/2010/12/09/the-clinton-crew-takes-ov_n_794430.html
The article I cited yesterday talked about a Obama and Clinton having a get together -- Bill, that is, not the Hillary variety -- to talk about strategies going forward.
I think Barry W. Reagan was trying to snooker somebody.
This is a travesty! I am ashamed. Ashamed of the corporations and the greedy rich, ashamed of every "conservative" Democrat who voted with the Republicans against universal healthcare (they're just Repubs in Dems clothing), ashamed of the Repubs themselves (they DISGUST me!), ALMOST ashamed that I voted for President Obama in the first place. How dare he let us down this badly! He really doesn't understand, does he? Is he too smart to have common sense?
"30 needles, 30 pins,
30 DIRTY Republicans!"
-"The Curious Savage"
I am SICKENED by it all!
This will further cement a permanent "aristocracy" in America. Unearned wealth, and with it, political power, handed down in family lines. Instead of earning their fortunes, a new class will arise, more arrogant, more entitled, more dismissive of the needs of the common man and of societal obligations. Unable to relate and unsympathetic to those in poverty, or even what's left of a middle class. In the long term of course, it's unsustainable and will eventually lead to revolution, probably violent. In the short term, it is a corrosive acid that will destroy a democracy from within.
Democrats and Republicans, a pox on both their houses for facilitating this destruction of America.
Next step for libs. Have the IRS pull the gold teeth from the corpse, refurbish the pacemaker, and sell both on Ebay.
Actually, kid, you're not that special to United Health, or Comcast, or DynaCorpse, or Boeing, or Archer Daniels Midland, or ATT, or any other corporate behemoth that has your life, and that of your future children mortgaged against the derivatives gained on the off-shored production line of disaster/disease capitalism paid for by your tax dollar.
Your eating of your own, garnished with ignorance, is tragic folly indeed.
The estate tax is a monstrous sweetheart deal whose effect of raising the debt will be eventually paid by the sick and elderly. A first step has already been taken by sucking an estimated 120 billion dollar out of the SS "non-lock-box". Anyone who believes that the 120 billion will be "refunded" to Social Security needs to see a psychiatrist. That can will eventually be kicked down the road by our champion can-kicker Obama. The two measures are intertwined and must both be defeated by the House or else the Senate.
GOP got their precious tax cuts / sweet heart deals
but this deal also preserves...
1. Tax cuts for 100 million families
2. Jobless pay going just before Xmas
3. kept Student tax credit so they get jobs AND PAY TAXES !
4. SOCIAL Sec tax down from 6.2 % to 4.2 % for a year
5. Small business breaks
6 This puts Obama / Dems in a good place in 2 yrs
so Obama can win No more GOP Pres we saw what came of that
28 yrs under 1980 Reaganomics - huge cuts and huge ' hidden ' debt-
total amnesty for slave wages
Bush Cheny GOP congress Tom Delay- Newt GOP clowns
led us to 2008 global crash 700 billion TARP
2 very long wars lies- fear - greed
For what it is worth, here is another view:
1. The tax cuts for normal-income people could be preserved. The issue is the tax cuts for the mega-rich.
2. ditto.
3. ditto. Why are we inextricably linking a continuation of tax cuts-- for those who don't need them-- with tax breaks to those who need and deserve them? Does this make sense, that the rich should not pay their fair share of tax, in order that students get a tax break?
4. I think we all know that this is just a way to incrementally kill off Social Security.
5. Again, there is no reason why small business tax breaks should be linked to tax cuts for the uber-wealthy.
6. I thought we were being serious, but this is a welcome attempt to add levity to a fraught topic. Good for a chuckle.
Regarding how this bill incrementally kills off Social Security is one of the underreported stories in this bill.
The Social Security payroll tax rate cut that replenishes SS by transferring money from Federal Funds is a setup to 1) blame Social Security for contributing to the deficit; and 2) call any expiration of those benefits as a tax increase. Social Security should stay a stand-alone program.
Progressive101
"Regarding how this bill incrementally kills off Social Security is one of the underreported stories in this bill."
I am amazed how could Obama did not know or could he have assumed that we will never find out that FICA wage withholding from 6.2 per cent to 4.2 per cent a total of 4% (2+2) reduction will ultimately kill SS. Is Obama that shrewd or are we that stupid?
What may happen with the SS tax cut is this. The shortfall will be replenished from "general funds" but will immediately be replaced by I.O.U.'s at roughly 0 percent interest. Meanwhile the shortfall will be filled with loans from China, Saudi Arabia, etc., all very friendlily nations who care tremendously about our SS recipients.
I hint sarcasm in this sentence "Meanwhile the shortfall will be filled with loans from China, Saudi Arabia, etc., all very friendlily nations who care tremendously about our SS recipients."
That is a good point that was made in an earlier comment that SS will be used as a lightning rod by tea partiers when it does set to expire. They will call it a tax increase for sure.
This is just a stealth way to borrow from SS.
I called Democratic representatives and told them to stop the temporary payroll tax holiday and to save SS. Also told them this tax compromise stinks.
It is NOT a 4 % reduction, it's a reduction from 6.2% to 4.2%. So the actual FICA line on your pay stub is going to decrease by about 30%.
This is really a 30+% cut in Social Security funding.
If they wanted a payroll tax holiday they could have cut the rate on the federal taxes line on your pay stub. This is nothing but a huge attack on Social Security. This is MUCH more important than estate taxes.
http://www.ncpssm.org/news/archive/payroll_tax_holiday/
Thanks, where did you get the 30% decrease from?
Well the uber-rich needed another Christmas present didn't they?
The Democrats need to find a replacement
for Barry as soon as possible. Let Barry
run a primary for the big prize is he dares.
The Democratic Party needs to be destroyed, who cares who they choose to run against the Obamination. It'll be a lying sack of scum anyway, all Democrats are, at least Republicans don't pretend, they are openly and proudly criminal.
It isn't dissimilar in Britain, where the rich have had their tax load greatly lightened with the nostrum that money will consequently cascade down to the porer classes. When did the rich ever willingly cascade their money away? Maybe the benevolent industrialists of the nineteenth century, but never since.
I am astonished by just how rich the very rich in America are, and just how destitute the poor. The myth always sold to the poor is that America is the land of opportunity.
Maybe, before the frontier closed and all the means of production got deeds of ownership attached to them, yes. Now, no. The US is as mature a country as any other, and it appears to have created its own aristocracy, one which makes those of Europe look very sad indeed. The thought that it could be voted away, and isn't being, is truly amazing.
I too see real problems ahead for the American polity, and the very coherence of the nation.
Take a look at the people who have signed onto the Warren Buffett/William Gates pledge to give half their billions to charity. Virtually all of them -- and there are now quite a large number (see yesterday's story in The Wall Street Journal) -- did not inherit their money. They made it during their lifetimes by founding or co-founding companies that made them billionaires.
I take it that Britain, with its landed gentry, is far different. We don't have lords and ladies, barons and baronesses. The United States is, in comparison, the land of opportunity. People in Europe stare in amazement at someone like Arnold Schwarzenegger who arrived poor and worked hard to get to be where he is today (regardless of whether you approve of his politics). Try that in the U.K.
Being the land of opportunity includes the opportunity to fail as well as the opportunity to succeed and a majority of the voters, being somewhat right of center, do not think it appropriate for the government to have as a principal goal the redistribution of income. That's one reason why the Dems got shellacked last month.
The U.K. (at least under a Labor Government) and the other European Union nations are very much different. Confiscatory taxation, a hatred of the wealthy, widespread approval of income redistribution, and much less opportunity to either succeed or fail.
You cannot EARN a billion dollars. You have to steal ideas and labor to accumulate that much. And certainly their kids did not earn it.
Joe
Time to take your meds.
I find that ad hominem attacks are generally a very good way to sway the person you are attacking toward your point of view.
Do you think someone who responds with the knee-jerk reaction that person exhibited is capable of being persuaded of a contrary view?
Exactly, and Bill Gates, the richest man in the world with $58,000,000,000 dollars is a perfect example. He bought the orignal DOS for $50,000 from the poor shlub who wrote it. Then he licensed it to IBM. Then he stole the first Windows operating system from a Xerox Park research facility. That is how Gates got his start on making his fortune on the backs of the hard work of others.
Your allegation of theft is pretty serious. Do you have facts to back it up, or are you just bloviating and exposing yourself to liability for defamation?
Google 'xerox parc windows microsoft'
MEDIA CONTROL will not allow Joe the Plumber or Jane the Bartender to know about that. That way, they will continue to vote for Republicans and Democrats, both of whom are largely owned by MEDIA CONTROL.
BE ALL YOU CAN BE -- THANKS TO THE RICH NOBILITY
But the rich, our 1% High Society, surely they are only giving the 51% voting majority a freewill, the freedom to take all they can take, to own all they can own and be a dictator over all who are on land that they own.
So who are in this voting majority? Surely no one in my uneducated and impoverished lower half of society. You just try and be all you can in one or our slums, and see how long the cops will put up with it.
And so, let me give you a quick clue, for my profession of 20 years was that of a Wisconsin Registered Real Estate Broker, and all you need do to identify all those who have the wealth needed to self-actualize, is to open up the real estate section of your local paper.
For this over fed and over glorified 51% of society all have terrific homes, great jobs and as can be seen by all their well nourished and healthy kids, they all have what none in my laboring class has -- deluxe healthcare.
Ever notice how they all have PERFECT teeth. You know what that costs? Way the 'f' more than I have, I can tell you that. My teeth suck so I always notice teeth.
If your joing to run for office on the plateform of reducing government's ability to use deadly force, then drive as if your about to get a ticket, super careful, and avoid all dentists. Take it from a man of experience.
This is more of that "Change" we can't believe in courtesy of the Oily Bomber.
Obama is the biggest Trojan horse ever to be seen in American politics. Note how the election was engineered with Rogerian rhetoric. We had plenty of common ground with Obama. He was against war, he desired economic justice, he wanted healthcare for everyone. Notice how that Rogerian rhetoric was in reality, nothing more than bald-faced lies. The actual implementation of this administration has seen our murderous rampages go on the rise, seen affordable healthcare for everyone go out the window, seen Bush's tax cuts for the wealthy get extended and now witness, unsolicited, the biggest give away to the wealthy elite will be enacted in the form of estate tax rollbacks. Let's not even mention his catfood commission and his assault of SS.
This man needs to be impeached. Fraud, phony, charlatan.
President O'Bushka, you're doing a heckuva job!
Republican President Barack Obusho strikes once again.