Dying to Know the Truth
Congressman Steve Pearce is proud of his vote to approve the Death Tax Repeal Act of 2015. The measure passed the House and faces almost certain defeat in the Senate.
Congressman Pearce votes the ultra-conservative line and it works for him. He is a big hit with most of his Second Congressional District constituents. The fact many on the other side of the aisle vigorously dispute his politics is of little concern. He da man.
One gets almost an icky gut reaction when thinking of the Estate Tax. It surely doesn’t seem the American way. You start a business or run a farm, you work 16 hours a day building your enterprise, you employ lots of people, contribute to the community, and then you die. And, boom, the government steps in and swoops up almost half of your hard-won assets.
That’s the image one might gather from the Pearce press release bragging about his vote to fully repeal this tax.
“Small businesses account for 98 percent of the jobs in New Mexico. Most of these businesses are family-owned. Penalizing a family for a death or a loved one is no way for government to work,” said Pearce.
“From ranching and farming to an urban small business, families throughout the nation work together to build and grow a successful life. Yet, the ‘death tax’ authorizes the IRS to take 40 percent of a family’s living, which they have worked so hard to grow – burdening our economy and killing jobs.”
The congressman promises getting rid of the “destructive tax policy” will help protect farming and ranching and “the entrepreneurship fundamental to the culture and history of New Mexico.”
Right there is a heaping bucket of bull crap for you. The congressman has every right to attack the Estate Tax, but he needs to be more intellectually honest in doing so.
Pearce knows full well this tax does not permit the government “to take 40 percent of a family’s living.” His readers might have been interested to know that unless your individual estate value exceeds $5.4 million – $10.8 million for a couple – the tax is zero.
Zero as in nothing.
A single person with an estate value of, say, $8.4 million would be taxed 40 percent of $3 million, or $1.2 million. That stings. And maybe it violates America’s bedrock principles as interpreted by Pearce and company. But be honest. A lot of people struggling to make ends meet, including folks who depend on food stamps whose funding Pearce voted to cut, are going to be hard pressed to dig up much sympathy.
And Steve Pearce also knows that just a whole lot of this estate wealth, not all, is held by trust-fund children, wealth handed down from generation to generation. Key employees tend to be in the pilot and tax accountant professions.
The Pearce release cites the 98 percent of small business jobs in New Mexico, as if these jobs are going to disappear if the estate tax is not abolished. Such nonsense.
This tax applies to two-tenths of 1 percent of the richest Americans. That’s a total of 5,500 of the wealthiest households in the country. How many of those households are in New Mexico, 49th poorest state in the nation? A miniscule scattering, and that’s just an estimate.
Pearce points out the non-partisan Tax Foundation supports the repeal of the Estate Tax. If you want to pursue that logic you can find it here: www.taxfoundation.org.
A well-respected New Mexico businessman who knows how this stuff works weighs in on the subject:
This issue has nothing to do with small business. It is to protect the super wealthy. This may include some very large businesses that are partnerships or other closely held companies. Most of them use sophisticated estate plans that really minimize the taxes. Anyone who uses the term "death tax" is dishonest. No one is taxed for dying. 998 out of 1,000 Americans die owing no tax. We are catering to the top 0.2%. Those that have a taxable estate aren't paying 40%. You start out with a $10.8 million exemption, which increases annually, and after (the tax accountant) goes to work the rate is well below 40%. Obviously the bill is dead in the Senate but we are already in another election cycle and the place to raise lots of campaign contributions is from those with lots of money.
Today, this is the home of New Mexico no nonsense.