…Through the virtue of training, Enlighten both body and soul — Morihei Sensei

Posts tagged “workers

Democrats have foresaken the working man: Death tax.

The death tax disproportionately taxes working class families, so why do Democrats refuse to reform or abolish it. Don’t believe me? Read on. . .

The Democratic Party in the United States has forsaken the base they so loudly claim to represent. Working men and women, the working class, as they are referred to are not represented by the Democratic Party. Certain segments of that demographic, particularly Black Americans, are particularly not represented. In fact, I would venture to say that the interests of Black Americans, in particular, but the working class in general, are harmed by the policies and positions of the Democratic Party. Three examples of this negative representation are illustrated in three party platform issues: The death tax, social security reform, and welfare reform. Each of these examples represents area where working class people could really benefit from dramatic reforms, but the Democratic Party has classically resisted.

One of the most ironic issues affecting working class Americans is the death tax. This is a tax, which ostensibly is supposed to even the playing field in the transfer of wealth between generations. One of the strongest proponents of the death tax is Warren Buffet. He argues that a major barrier to meritocracy, versus a defacto aristocracy is the issue of wealth being tranferred from the generation that earned it, to following generations did not earn it, but due to no particular merit of their own, can now wield that wealth. This is a true issue, however, the mechanism of the death tax only serves to exacerbate this disparity.

The generationally educated and wealthy are not deeply affected by the death tax. They have the financial sophistication to establish estate transfer mechanisms which greatly side step the deliterious effects of a 50% tax on one’s entire estate. There are many technical and legal mechanisms and entities that allow the wealth to be preserved and passed along, largely unaffected by the 50% tax. However, one must have the advisors and the advance planning in place to take advantage of these. The entrenched wealthy do, and the working class stiff generally does not.

On the face of it this may seem like a non starter because the death tax is only effective on estates valued at 3.5 million dollars or higher, and which low educated working class family would fall into that categroy? The answer, as it turns out is many would. Take my grandfather for example, a child of the Jim Crow era, his father was an ex-slave. My grandfather served in WWII, and after that as a young man, came out to a world that did not offer many breaks. He made his own breaks. He was a carpenter, a general contractor, a junk man, and a landlord. He worked every day of his life until alzheimer’s got the upper hand. He honored his word. He paid his way in cash. When he died, he had amassed a small fortune, primarily by the sweat of his brow, and the strength of his character. What he did not do was finish high school, let alone learn anything about estate planning.

My grandfather’s story is not unique. There are millions of plumbers, truck drivers, teachers–working class people who will die with sizeable estates, and be victims of the death tax.

Our United States Senators, Congressman, and Presidents are not stupid people. They know that the wealthy may pay some tax, but it does not approach the percentage that the death tax will cut from a the small roofing company owner. As I said, they are not stupid, and they have heard the argument I’m making before. There are smaller caucuses in the Democratic party that argue against the death tax, for the very reasons I lay out here. So it is not that the Democratic National Committee, or the Democrats in Congress or the White House, do not know what the death tax actually does. What I can’t seem to get my head around, is why, when the death tax so disporportionately taxes the people it is supposed to create equanimity for, do Democrats oppose its reform, or ablolishment? Why when it so unfairly taxes their loyal constituency,
do Democrats insist on it continued existance?

Well this rant has gone on long enough. The other two issues, I will need to address in a future posting.

Night of the Living Death Tax: Obama’s budget quietly resurrects it in 2010.

Beating the estate tax to death: With estate tax set to end this year, retroactive lawmaking in 2010 is likely
Check me out on Twitter: Twitter.com/Old454

Advertisements