# Lawmakers search for a wealthy Katrina corpse **URL:** \ **Category:** The BBQ Pit\ **Created:** [September 19, 2005, 6:21pm UTC](https://boards.straightdope.com/t/lawmakers-search-for-a-wealthy-katrina-corpse/322396 "2005-09-19T18:21:14Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![RTFirefly](https://avatars.discourse-cdn.com/v4/letter/r/c77e96/32.png) [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)\ **Post date:** [September 20, 2005, 2:24pm UTC](https://boards.straightdope.com/t/lawmakers-search-for-a-wealthy-katrina-corpse/322396/21 "2005-09-20T14:24:31Z")
> [@Hentor the Barbarian](#): > > As far as I know, they have yet to find one farm that had to be sold to pay the estate tax, and that is after 5 years of making the claim. It’ll be hard for them to find one too, seeing as how the estates of both farmers and small businesses can pay their estate taxes over a 15-year period. It’s devilishly hard to come up with even a hypothetical set of numbers that would require the heirs to sell the business or farm; I’ve tried. In the case of a business, it would have to be valued for tax purposes at well above what its income stream could justify. In the case of a farm, if the land is worth a lot more as a site for mini-mansions, then you sell off a small corner of the farm for that purpose, make the first several years of payments with that cash, and keep farming the rest of the land. Or just sell out as the exurbs encroach, and buy a new plot of farmland 20 miles further out, where land is cheaper. > [@](#): > > Or maybe they’ll do what they did before, and just lie about it, given that the pig-fucker Rove remains in charge. It’s worked well for them so far. ---
**Author:** ![UncleBeer](https://avatars.discourse-cdn.com/v4/letter/u/977dab/32.png) [@UncleBeer](https://boards.straightdope.com/u/UncleBeer)\ **Post date:** [September 20, 2005, 3:38pm UTC](https://boards.straightdope.com/t/lawmakers-search-for-a-wealthy-katrina-corpse/322396/22 "2005-09-20T15:38:56Z")
While this approach to reviving Sessions’ pet cause is repugnant, the estate tax should be abolished. It’s an overly-punitive tax on an overwhelmingly miniscule portion of the tax base. It’s such an insignificant part of the total federal tax revenues, it isn’t needed - unless its real purpose is to keep the high-hat tax lawyer buddies of our congressfolf employed. And it certainly isn’t worth the huge public debate it has engendered. Wouldn’t it be much simpler just abolish the damned thing, call the proceeds of inheritance personal income and tax it that way? ---
**Author:** ![LavenderBlue](https://avatars.discourse-cdn.com/v4/letter/l/e95f7d/32.png) [@LavenderBlue](https://boards.straightdope.com/u/LavenderBlue)\ **Post date:** [September 20, 2005, 4:55pm UTC](https://boards.straightdope.com/t/lawmakers-search-for-a-wealthy-katrina-corpse/322396/23 "2005-09-20T16:55:41Z")
> [@UncleBeer](#): > > While this approach to reviving Sessions’ pet cause is repugnant, the estate tax should be abolished. It’s an overly-punitive tax on an overwhelmingly miniscule portion of the tax base. It’s such an insignificant part of the total federal tax revenues, it isn’t needed - unless its real purpose is to keep the high-hat tax lawyer buddies of our congressfolf employed. And it certainly isn’t worth the huge public debate it has engendered. Wouldn’t it be much simpler just abolish the damned thing, call the proceeds of inheritance personal income and tax it that way? I like the last sentence. Treat inheritances like other forms of revenue and tax it accordingly. ---
**Author:** ![Runestar](https://avatars.discourse-cdn.com/v4/letter/r/74df32/32.png) [@Runestar](https://boards.straightdope.com/u/Runestar)\ **Post date:** [September 20, 2005, 5:01pm UTC](https://boards.straightdope.com/t/lawmakers-search-for-a-wealthy-katrina-corpse/322396/24 "2005-09-20T17:01:40Z")
The best argument for retaining the estate tax is two simple words. Paris Hilton 'nuff said. ---
**Author:** ![TwistofFate](https://avatars.discourse-cdn.com/v4/letter/t/cdc98d/32.png) [@TwistofFate](https://boards.straightdope.com/u/TwistofFate)\ **Post date:** [September 20, 2005, 5:03pm UTC](https://boards.straightdope.com/t/lawmakers-search-for-a-wealthy-katrina-corpse/322396/25 "2005-09-20T17:03:36Z")
Couldn’t sessions just have monitored his inbox for a while? No doubt he’ll be contacted by a bank worker in South Africa who has the sum of $14 MILLION (14,000,000 DOLLARS) in a slush fund bank account that a New Orleans landowner kept, and needs Sessions to act as next of kin… ---
**Author:** ![BobLibDem](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/boblibdem/32/3149_2.png) [@BobLibDem](https://boards.straightdope.com/u/BobLibDem)\ **Post date:** [September 20, 2005, 6:04pm UTC](https://boards.straightdope.com/t/lawmakers-search-for-a-wealthy-katrina-corpse/322396/26 "2005-09-20T18:04:54Z")
> [@UncleBeer](#): > > Wouldn’t it be much simpler just abolish the damned thing, call the proceeds of inheritance personal income and tax it that way? Absolutely, but their intent is to do one and not the other. I haven’t seen any proposals to do as you say, it’s always just do away with it and not tax that income at all. No matter how you feel about the estate tax, and reasonable men are on both sides, to try to seach for a martyr for your cause seems downright ghoulish. ---
**Author:** ![Giraffe](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/giraffe/32/129_2.png) [@Giraffe](https://boards.straightdope.com/u/Giraffe)\ **Post date:** [September 20, 2005, 6:57pm UTC](https://boards.straightdope.com/t/lawmakers-search-for-a-wealthy-katrina-corpse/322396/27 "2005-09-20T18:57:38Z")
> [@UncleBeer](#): > > While this approach to reviving Sessions’ pet cause is repugnant, the estate tax should be abolished. It’s an overly-punitive tax on an overwhelmingly miniscule portion of the tax base. It’s such an insignificant part of the total federal tax revenues, it isn’t needed - unless its real purpose is to keep the high-hat tax lawyer buddies of our congressfolf employed. And it certainly isn’t worth the huge public debate it has engendered. Wouldn’t it be much simpler just abolish the damned thing, call the proceeds of inheritance personal income and tax it that way? Ignorance alert: I had thought inheritance was already taxed as personal income, and the push was to make it tax-free using the ridiculous “double-taxation” argument that worked so well for the tax on dividends. Huh. Color me embarrassed. As such, I agree with **UncleBeer** 100%. ---
**Author:** ![Debaser](https://avatars.discourse-cdn.com/v4/letter/d/3da27b/32.png) [@Debaser](https://boards.straightdope.com/u/Debaser)\ **Post date:** [September 20, 2005, 7:09pm UTC](https://boards.straightdope.com/t/lawmakers-search-for-a-wealthy-katrina-corpse/322396/28 "2005-09-20T19:09:40Z")
Taxing estates like income would be even worse than the estate tax. The estate tax only affected larger estates ($600K and up, IIRC). Taxing estates as income tax would affect almost everybody with an estate, since nearly everyone already has income. People with a moderate estate such as $1,000,000 would get nailed with the highest tax rates for most of it (33-35%). This is actually higher than the existing estate tax. The rate of 47% only applied to money after that first $600K, which would be a lower effective rate. I pay taxes my whole life. I pay them on the money I earn, and I pay them on the money I spend. If I give my wife or child money to go to the store, this isn’t taxed nor should it be. Transfering money around inside a family is not a taxable event, and is none of the governments business. Similarly me passing on my estate to my heirs isn’t a taxable event and the government should butt out of it. My heirs will just spend or invest the money anyways which will result in government getting tax revenues. It’ll just take a bit longer. ---
**Author:** ![ElvisL1ves](https://avatars.discourse-cdn.com/v4/letter/e/5daacb/32.png) [@ElvisL1ves](https://boards.straightdope.com/u/ElvisL1ves)\ **Post date:** [September 20, 2005, 7:19pm UTC](https://boards.straightdope.com/t/lawmakers-search-for-a-wealthy-katrina-corpse/322396/29 "2005-09-20T19:19:41Z")
> [@UncleBeer](#): > > It’s an overly-punitive tax Who is it punishing? Dead people? Or the heirs who did nothing to earn it and don’t have it yet anyway, and whose characters might benefit from making their own way in life with less than a multi-six-figure windfall? > [@](#): > > on an overwhelmingly miniscule portion of the tax base… It’s such an insignificant part of the total federal tax revenues, it isn’t needed [Cite time:](http://www.taxadmin.org/fta/rate/b-0701.html) > [@](#): > > Federal estate tax receipts were $29.0 billion in FY 2000, and the Joint Committee on Taxation expects cost of the fully phased-in estate tax repeal to exceed $50 billion per year in 2009. You got any newer numbers, cough 'em up. Granted, even more money could be saved by pulling out of Iraq or abandoning New Orleans, but it ain’t “overwhelmingly minuscule” or “insignificant”. How do you plan to make up the shortfall, anyway - with even more debt? > [@](#): > > unless its real purpose is to keep the high-hat tax lawyer buddies of our congressfolf employed. Close. The people hit hardest by it are (the heirs of) the biggest campaign contributors. They naturally expect a return on their investment in the congressfolk they “employ.” > [@](#): > > And it certainly isn’t worth the huge public debate it has engendered. Aw, gee, who engendered it and why, huh? Sure, it would be easier for your party to have its opposition simply bend over, but why do you think sound fiscal policy is not worth the trouble? > [@](#): > > Wouldn’t it be much simpler just abolish the damned thing, call the proceeds of inheritance personal income and tax it that way? If you like, sure. Is there a proposal on the table, as part of the “huge public debate” you claim to see, to do that, though? No? Why ever not? ---
**Author:** ![BobLibDem](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/boblibdem/32/3149_2.png) [@BobLibDem](https://boards.straightdope.com/u/BobLibDem)\ **Post date:** [September 20, 2005, 7:21pm UTC](https://boards.straightdope.com/t/lawmakers-search-for-a-wealthy-katrina-corpse/322396/30 "2005-09-20T19:21:29Z")
Often the money left in estates has never been taxed, let alone “double taxed”. Scenario: In 1950 John Smith invests $1000 in Acme at $1.00 per share. He keeps those stocks all his life. In 2000, those 1000 shares are worth $500 per share. John’s stock which was worth $1000 is now worth $500,000. John dies in 2000. John Junior inherits the stock. That $499,000 in appreciated value has never been taxed. Why should John Junior get off tax-free? ---
**Author:** ![Hentor\_the\_Barbarian](https://avatars.discourse-cdn.com/v4/letter/h/8edcca/32.png) [@Hentor\_the\_Barbarian](https://boards.straightdope.com/u/Hentor_the_Barbarian)\ **Post date:** [September 20, 2005, 7:38pm UTC](https://boards.straightdope.com/t/lawmakers-search-for-a-wealthy-katrina-corpse/322396/31 "2005-09-20T19:38:09Z")
> [@Debaser](#): > > Taxing estates like income would be even worse than the estate tax. The estate tax only affected larger estates ($600K and up, IIRC). Taxing estates as income tax would affect almost everybody with an estate, since nearly everyone already has income. People with a moderate estate such as $1,000,000 would get nailed with the highest tax rates for most of it (33-35%). This is actually higher than the existing estate tax. It’s actually way higher than the existing estate tax in your example, since estates up to $1.5 million are currently exempt from the estate tax. ---
**Author:** ![Debaser](https://avatars.discourse-cdn.com/v4/letter/d/3da27b/32.png) [@Debaser](https://boards.straightdope.com/u/Debaser)\ **Post date:** [September 20, 2005, 7:39pm UTC](https://boards.straightdope.com/t/lawmakers-search-for-a-wealthy-katrina-corpse/322396/32 "2005-09-20T19:39:19Z")
> [@BobLibDem](#): > > Scenario: In 1950 John Smith invests $1000 in Acme at $1.00 per share. He keeps those stocks all his life. In 2000, those 1000 shares are worth $500 per share. John’s stock which was worth $1000 is now worth $500,000. John dies in 2000. John Junior inherits the stock. That $499,000 in appreciated value has never been taxed. Why should John Junior get off tax-free? I’m no expert on inheritance law, but I think that the estate would be taxed on any appreciation, just as if he were alive. But, there shouldn’t be another tax paid by John Junior after that just as a punishment for Dad dying. The same could be said about any other investment. I buy a house for $200K and fix it up. I sell it within the same year for 300K, and now will owe a big check to the feds for the 100K difference as a short term capital gain. If I die before tax time, does my estate still have to pay the tax on this? I’d have no problem with this being the case, it’s when you start adding on another additional tax just as a result of my death that I have a serious problem with it. In any case, the guy is dead. Do you really need to slap him with a final tax bill? This isn’t exactly a likely scenario to happen in large numbers. ---
**Author:** ![Debaser](https://avatars.discourse-cdn.com/v4/letter/d/3da27b/32.png) [@Debaser](https://boards.straightdope.com/u/Debaser)\ **Post date:** [September 20, 2005, 7:51pm UTC](https://boards.straightdope.com/t/lawmakers-search-for-a-wealthy-katrina-corpse/322396/33 "2005-09-20T19:51:49Z")
> [@Hentor the Barbarian](#): > > It’s actually way higher than the existing estate tax in your example, since estates up to $1.5 million are currently exempt from the estate tax. Yep, you’re right. It’s 1.5 mill and going to 2 mill in 2006. I don’t know where I got the 600K figure from. I think I confused it with something regarding Real Estate taxes that I dealt with recently. In any case the point stands: Taxing estates like income would be devastating. It would dwarf the current estate tax for nearly everybody. Even an estate of 5 million would be taxed higher under the “tax as income” scheme. Total income: 5,000,000 After 1.5 excemption: 3,500,000 48% tax on this: $1,680,000 Total left for heirs: $3,320,000 Using a turbotax [tax calclulator](http://www.turbotax.com/tax_calculators/avetaxrate/?source=ttcom4home1): Taxable income: 5,000,000 Avg tax rate: 34.62 Total taxes paid: $1,730,908 Total left for heirs: $3,269,092 Meanwhile an estate of $1,500,000 which would currently not pay any estate taxes would be hit with a bill for $505,908. It amazes me sometimes the things that people think are good ideas. ---
**Author:** ![BobLibDem](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/boblibdem/32/3149_2.png) [@BobLibDem](https://boards.straightdope.com/u/BobLibDem)\ **Post date:** [September 20, 2005, 7:53pm UTC](https://boards.straightdope.com/t/lawmakers-search-for-a-wealthy-katrina-corpse/322396/34 "2005-09-20T19:53:54Z")
> [@Debaser](#): > > I’m no expert on inheritance law, but I think that the estate would be taxed on any appreciation, just as if he were alive. But, there shouldn’t be another tax paid by John Junior after that just as a punishment for Dad dying. I’m no accountant either, surely one will come along and enlighten both of us. I believe in my scenario the entire $500,000 is part of the estate, Junior would pay tax on his share of the estate minus the allotted deduction. Let’s say this was all that Junior got- I believe that he would get off tax free and the appreciation never taxed. This from my reading of [this IRS link.](http://www.irs.gov/businesses/small/article/0,,id=98968,00.html) > [@](#): > > To reemphasize: Most relatively simple estates (cash, publicly traded securities, small amounts of other, easily valued assets and no special deductions or elections or jointly held property) with a total value under $1,000,000 and a date of death in 2002 or 2003 and $1,500,000 and a date of death in 2004 or 2005 do not require the filing of an estate tax return. ---
**Author:** ![UncleBeer](https://avatars.discourse-cdn.com/v4/letter/u/977dab/32.png) [@UncleBeer](https://boards.straightdope.com/u/UncleBeer)\ **Post date:** [September 20, 2005, 8:20pm UTC](https://boards.straightdope.com/t/lawmakers-search-for-a-wealthy-katrina-corpse/322396/35 "2005-09-20T20:20:01Z")
[quote=ElvisL1vesOr the heirs who did nothing to earn it and don’t have it yet anyway, and whose characters might benefit from making their own way in life with less than a multi-six-figure windfall?[/quote] Yep. Them folks. There is absolutely no honest argument which demonstrates the government has a greater right to this money than does the heirs. And, hey, thanks for the condescending morality lesson, too. I really hate having those imposed on me, particularly by such smug assholes as yourself. But even less so when it’s proposed to be enforced by legislatively-authorized theft. > [@](#): > > You got any newer numbers, cough 'em up. Granted, even more money could be saved by pulling out of Iraq or abandoning New Orleans, but it ain’t “overwhelmingly minuscule” or “insignificant”. Yeah. [Right here](http://www.ers.usda.gov/Briefing/FederalTaxes/TaxesEstateTax.htm). > [@](#): > > Estate and gift tax receipts have historically accounted for a relatively small share of total Federal revenues annually. However, while the aggregate importance of estate and gift taxes is small relative to other Federal Government revenue sources, the potential impact of these taxes on an individual or group of individuals, such as farmers and other small business owners, can be substantial. A tax that disproportionately affects a small segment of the public while generating little revenue. Sounds like the very definition of punitive to me. Other sources tell me that the Estate & Gift tax make up only 1.1% of total federal revenues. Insignificant. > [@](#): > > How do you plan to make up the shortfall, anyway - with even more debt? What shortfall? Did I not say something about taxing this money as income to the heirs? And there are many studies showing that for every dollar the estate generates to the federal government, another dolle of potential revenue is lost elsewhere. So, it’s not even certain that the estate tax actually generates a real federal revenue anyway. ---
**Author:** ![UncleBeer](https://avatars.discourse-cdn.com/v4/letter/u/977dab/32.png) [@UncleBeer](https://boards.straightdope.com/u/UncleBeer)\ **Post date:** [September 20, 2005, 8:29pm UTC](https://boards.straightdope.com/t/lawmakers-search-for-a-wealthy-katrina-corpse/322396/36 "2005-09-20T20:29:43Z")
> [@Debaser](#): > > Meanwhile an estate of $1,500,000 which would currently not pay any estate taxes would be hit with a bill for $505,908. My apologies; this not being GD, I haven’t explained myself fully. I believe the existing trigger points should still apply as a deduction. ---
**Author:** ![Kimstu](https://avatars.discourse-cdn.com/v4/letter/k/ecd19e/32.png) [@Kimstu](https://boards.straightdope.com/u/Kimstu)\ **Post date:** [September 20, 2005, 9:58pm UTC](https://boards.straightdope.com/t/lawmakers-search-for-a-wealthy-katrina-corpse/322396/37 "2005-09-20T21:58:37Z")
> [@UncleBeer](#): > > Estate and gift tax receipts have historically accounted for a relatively small share of total Federal revenues annually. However, while the aggregate importance of estate and gift taxes is small relative to other Federal Government revenue sources, the potential impact of these taxes on an individual or group of individuals, such as farmers and other small business owners, can be substantial. The “ **potential** impact” of these taxes “ **can** be substantial”? Sounds rather feeble to me. As **Hentor** mentioned, has anyone ever found even a single example of a family farm or other small business that actually had to be sold to pay its estate taxes? I’m all in favor of setting exemptions at reasonable levels to spare undue strain on what are no longer “large” estates in modern financial terms. But I certainly don’t think that the estate tax _per se_ is “overly punitive” or is unwarrantably afflicting those who have to pay for it. The richest few in US society are doing just fine financially. Their incomes and wealth have increased greatly over the past few decades. Continuing to pay estate taxes won’t kill them, if you’ll pardon the expression. And as for the estate tax bringing in “only” 1–2% of total federal revenues: dude, that’s 1% or more of about **1.8 trillion dollars**. That’s at least **18 billion dollars a year**. In our currently strapped financial position, I don’t think we can afford to go tossing away $18,000,000,000 annually in government revenue with no idea how we’re going to replace it or reduce expenditures to balance it. Indignation that the government somehow doesn’t have a “right” to tax huge estates of the wealthiest Americans, who are thriving financially anyway, is beside the point. The government doesn’t tax because it’s got a better moral claim to money than anybody else, but simply because it’s got to get money from somewhere if it’s going to pay for the things citizens expect it to do. Our current administration’s alternative policy of spending ever more money that it doesn’t have while continuing to cut revenues, thus running us ever deeper into debt, is not a good strategy for the long term. Eliminating the estate tax is not an act of fiscal rectitude or responsibility: it’s sheer elitist cronyism for the advantage of a small group of people who are **already** doing much better, in terms of their current prosperity **and** the rate at which their prosperity is increasing, than everybody else. ---
**Author:** ![Otto](https://avatars.discourse-cdn.com/v4/letter/o/bbe5ce/32.png) [@Otto](https://boards.straightdope.com/u/Otto)\ **Post date:** [September 20, 2005, 10:01pm UTC](https://boards.straightdope.com/t/lawmakers-search-for-a-wealthy-katrina-corpse/322396/38 "2005-09-20T22:01:24Z")
> [@UncleBeer](#): > > Estate and gift tax receipts have historically accounted for a relatively small share of total Federal revenues annually. However, while the aggregate importance of estate and gift taxes is small relative to other Federal Government revenue sources, the potential impact of these taxes on an individual or group of individuals, such as farmers and other small business owners, can be substantial. Um, how many dollars are there in a “substantial”? ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [September 21, 2005, 2:29am UTC](https://boards.straightdope.com/t/lawmakers-search-for-a-wealthy-katrina-corpse/322396/39 "2005-09-21T02:29:31Z")
> [@Giraffe](#): > > Ignorance alert: I had thought inheritance was already taxed as personal income, and the push was to make it tax-free using the ridiculous “double-taxation” argument that worked so well for the tax on dividends. Huh. Color me embarrassed. > > As such, I agree with **UncleBeer** 100%. I didn’t see this addressed…the estate pays the tax. When the heirs get it, they don’t pay any tax. We were lucky enough to inherit money that had estate tax associated with it several years ago. We never paid a dime in tax. The estate did, and as such, reduced our “take.” The person leaving us money was a relative of Brainiac4’s that he’d met only a few times. Its hard for me to begrudge the government their share of the estate. We sure didn’t do anything for that money other than be lucky enough to be related. ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [September 21, 2005, 4:42am UTC](https://boards.straightdope.com/t/lawmakers-search-for-a-wealthy-katrina-corpse/322396/40 "2005-09-21T04:42:33Z")
Would it be a hi-jack to note Republican efforts, as reported, to find a way to blame the levee failure on environmentalists? It appears we have underestimated the congnitive capacity of the reptilian brain. [Previous page](https://boards.straightdope.com/t/lawmakers-search-for-a-wealthy-katrina-corpse/322396.md?page=1) [Next page](https://boards.straightdope.com/t/lawmakers-search-for-a-wealthy-katrina-corpse/322396.md?page=3)