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Dr. Del Tackett is the author, architect and teacher for Focus on the Family's The Truth Project, a nationwide initiative designed to bring the Christian worldview to the body of Christ.

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USA Today Cries Over Failure to Loot Steinbrenner’s Pockets

Posted on July 19, 2010
Filed Under Marriage & Family, The State | 11 Comments


I don’t usually read USA Today, but I’m in Florida again filming for Cross Examine and the hotel offers it for free. Today’s “Our View” editorial was on the estate tax. Here is the subtitle: “Steinbrenner’s ‘smart’ financial move reveals stupidity of inaction”.

In case you missed the news, George Steinbrenner, owner of the New York Yankees, passed away recently. The “stupidity” USA Today is referring to, is the stupidity of the Federal Government for missing a chance to loot his estate. Evidently this was a “smart financial move” on Steinbrenner’s part because the estate tax in 2010 is zero, which means that people who die this year will be able to pass on the family china to their kids.

This galls some people, including USA Today which believes that we missed out on a grand opportunity to rifle through a dead man’s pockets and take half of his stuff.

A little history: the modern form of the estate tax in the U.S. began in 1916 with a top tax rate of 10% for estates over $1 billion (in today’s dollars). That may seem like no big deal because it only effects a very few estates. But it is the principle that is important and additionally the normal pattern is that a tax once established, like the proverbial camel’s nose, will, over time, reach out and touch more and more people. (If you give the state the power to take your neighbor’s cow, it will eventually come after yours). The estate tax was no exception and it soon rose to a top tax rate of 77%.

That is, until 1997, when Congress passed a law that would gradually phase it out. We are at the “out” stage this year, when the tax rate is zero. However, if Congress does not make the law permanent (which you can bet they won’t), this is the only year it will be zero and the estate tax will return in 2011 and take 50% of estates over $1 million.

That is why USA Today said that George made a “smart” move by dying this year. (how disgusting!)

But USA Today isn’t happy about this and bemoans the fact that, over all, we will lose out on getting about $15 billion in revenue from a bunch of “smart” people who die in 2010. This is consistent with a newspaper (and a populous) that increasingly thinks the state owns everything, even the cattle on a thousand hills (or at least 50% of a thousand hills) and it has the right to retrieve it at will.

However, listen to the rest of their logic:
“It makes sense to tax inherited wealth, derived simply by having the right parents, at a higher rate than money acquired through hard work or investment.”

Okay, let me see if I understand the argument. A family farm where children (who are often working along side the parents and looking forward to continuing the family business, which has been fully taxed already) are somehow not worthy to receive that inheritance just because they have the “right parents”?

And what USA Today obviously thinks is “right” is to take it away from them and give it to others?

Hmmmm.

So (still trying to make sense of their argument), the child doesn’t have the right to receive what their parents wanted to pass on to them because they may not have “worked” for it, but those who aren’t related at all and those who, for sure, DIDN’T “work” for it, DO have a right to receive it?

Have I fallen down a rabbit hole????

It seems that what USA Today REALLY means is that the children of the dead man are actually children of the “wrong” parents. Because the children of the “right” Daddy are those who end up with the dead man’s loot.

Ugh! Does this make anyone else ill?

One of our first Cross Examine shows will deal with this very issue. If you, or someone you know, has had to sell their ranch or farm or business in order to pay the death tax, please let me know. First of all, I’m very sorry. The last thing grieving children need to worry about is the lurking Federal Vulture. But, your story may help clarify the egregious nature of this tax to others and we would like to share it.

By the way, if I die this year, please don’t let anyone insult my children by saying it was a “smart financial move” on my part.

Added P.S. In three letters to the editor that refer to this article, two take the side for the inheritance tax. The first argues that the “money is free” and therefore should be taxed “in all fairness” and the second argues that those who oppose it are merely using a scare tactic because very few will be hit with it and that it is much better to tax the dead than the living. (Can you see how we have bought the notion that the state and therefore “we” really have the right to other people’s property? Especially if we can label the “others” as rich?)

Comments

11 Responses to “USA Today Cries Over Failure to Loot Steinbrenner’s Pockets”

  1. Tony on July 20th, 2010 9:32 am

    Del:
    This is how my parents kept their small, modest house in the family. The house was sold to me for $1.oo with a covenant placed on the deed which states that mom (dad recently passed on at the time) would be a rent-free tenant the rest of her life. She was protected in that she always had a place to live. Some years later, when she had to go to a nursing home, the state required me to liquidate her assets, including her life insurance policies to pay for her care before Medicaid would pay for expenses. For this reason, an “irrevocable burial” fund had to be established to pay for her funeral. No one could touch the house since it was on my name for a number of years at the time mom was admitted to the nursing home. When I finally lost her, the property escaped the “death” tax since I legally owned it.

  2. Isaiah on July 20th, 2010 10:24 am

    America, “Land of the free”? WOW.The sad news is that WE’RE the ones-The American People, both christian and non-christian- who have allowed these kinds of things to happen. God help us all-Isaiah

  3. Alan on July 20th, 2010 10:40 am

    Another demonstration of the State taking over parenting in is the decision that the Dutch government can override parents in a 14 year old’s decision to sail around the world: http://news.yahoo.com/s/ap/20100720/ap_on_re_eu/eu_netherlands_young_sailor

    While I agree that such an adventure might result in the death of a child, it’s a dangerous precedent to set, and I think individual parents can allow such risks without government interference.

  4. John on July 20th, 2010 12:00 pm

    While the federal “estate” tax does not affect a lot of us, we all feel its effects when it disenfranchises the families of successful business owners and farmers who have the misfortune of passing on (except in 2010).

    The “death” tax will, undoubtedly, once again impose an onerous burden on the deceased’s estate despite the fact that everything the person earned and all goods the person purchased during his or her lifetime were already taxed at least once in most cases and despite, in many states, the person’s real estate was taxed yearly, death allows the government another enormous bite of the person’s life and that of his family. Ten dollars per hundred for property taxes means you pay for your real estate again every ten years or so.

    Anyone who believes this repeated taxation is fair must be in favor of wealth distribution to those who have not earned it. Know anyone like that? Not only does the federal government have its collective hands out, but many states have their own “death” tax which takes a bite at death too (Indiana does). If these death taxes went to something worthwhile perhaps it would feel better to give it up, but that just is not the case.

  5. mike on July 20th, 2010 12:23 pm

    Thank you for exposing this Del!

    What is really dysfunctional is the philosophy behind this article. They are actually saying that the state has the right to penalize personal responsibility. The state would do well to remember that its constitutional role is to serve the people and to reward that which is good.

    Inheritance money that is passed on to the children is far more likely to have a better impact on the local economy and community than that which is taken by the state to be spent at the whim of self-seeking politicians who are obviously incompetent at balancing budgets. And do I need to point out that they also like to reward others who have the same problem?

    Wake up American citizen! Do justly, love mercy and walk humbly with your God.

  6. Kevin on July 20th, 2010 1:08 pm

    There is an interesting article in the American Spectator that explores the American “Ruling Class.” These are the political and powerful who believe the masses are stupid, backwards, and unable to make decisions that are best for the “community.” Their solution is to “shape” us by taking control over every aspect of our life – with our finances being a large piece of that. It’s a long read but well worth it.

    http://spectator.org/archives/2010/07/16/americas-ruling-class-and-the

  7. Paul on July 20th, 2010 1:11 pm

    For some reason power and greed corrupt:( Focusing on God’s Plan gives an eternal purpose:) Could we use a parable or two to clarify God’s Plan In all this.
    Sincerely Paul

  8. Pete on July 20th, 2010 5:15 pm

    Dr. Tackett,

    Speaking of rabbit holes, and your reference to the “lurking Federal Vulture” i share this experience with you that have led to my understanding of what you refer as the “lurking Federal Vultures”

    i refer to an experience in 2000 in Basle Switzerland, I had joined my bride after we were wed barefoot on the beach in Sarasota Florida. I joined her there in Basle CH as she was on contract at a place called the BIS Bank of International Settlements as a Senior HR consultant. Each day as I drove her to work i would drop her in front of the BIS and my interest was intrigued one day in the Fall when flags flew from all around the world. Alan Greenspan would be there to represent the United States. My questions began buzzing What was the Federal Reserve Chairman from the United States doing in Basle Switzerland??? and what was this Bank of International Settlements anyway. My research began a diligent search of just what was going on here, and more importantly what was the Federal Reserve, needless to say i entered into a rabbit hole that uncovered some incredible truths never had i known …….. and uncovered the illusion called money.

    There is probably not enough blog space here to go into such detail although i would love to, the bottom line is what i did learn is the The Federal Reserve is no more Federal than the chair I sit upon. The Fed creates a fiat currency that has an illusion of being money when in fact it represents debt…… WOW! It is private and has been since 1913 when the Federal Reserve Act was allowed to be passed through Congress. Under Article 1 section 8 of the Untied States Constitution the Congress shall have the power to coin money and regulate the value thereof…. What happened on Jekyll Island in 1910 in total secrecy I might add was nothing short of the greatest tyranny to the American People and has crippled our Nation.

    The truth behind the economic woes, wars, inflation and deflation and enslavement for the last 100 years can be traced directly to this cabal of bankers and world elites.

    I have always said if you want to find a motive follow the money trail and you find your answer. Who owns our media is the very cabal elite that have been controlling the American people through excessive taxation that is feeding their agenda. Deception is masqueraded with just a little bit of the truth.

    If our media controlled Vultures is continually successful of convincing gullible viewers into believing what they feed them, our polarized country will stay divided. the Truth is we live in a country that is a Constitutional Republic. Liberty and freedom will only fly with both wings of freedom.

    Remember when you asked? Do you believe what you believe to be real is really real? and wanted to haunt us with that question as well?? I took it to heart. and my fervent prayer has been Lord Jesus show me the lies and the illusions that are holding us captive……

    The heart of this matter is that our Freedoms are so desperately at stake here in America and the pendulum does not appear to be able to swing any further.

    Hope that you might be able to Cross Examine the Fed and why did President Woodrow Wilson apologize to the American people on his death bed feeling as though he allowed the greatest tyranny to happen on his watch.

    I love this country and love the freedoms for which we enjoy and love the men and women who risk all for our freedoms…. I swore to defend and uphold the Constitution upon entrance into the USCG. It continues as one who enjoys this beautiful land that God has given us.

    Truth and freedom comes through the Cross of Jesus Christ alone, the finished work of our Lord Jesus Christ. My prayer is that God raises Godly men and women into influential roles of local state and national Government and We the People Wake Up!!! and take back our country.

    ..being part Cherokee there is an old indian proverb … we don’t don’t inherit the earth from our fore-Fathers we borrow it from our children….

    the truth that sets us free ? Our Savior told us the grace mercy love and forgiveness of our Lord Jesus Christ.

    ~jps

  9. Roger on July 21st, 2010 7:20 pm

    The current system seeks to penalize success. I’ve argued the point often in online forums. The rebuttal is “the American system allowed you to gain the wealth, and therefore, you should return at least 50% back to the government.”

    This issue has plagued us personally, and as a family. We recently had to sell a major portion of the family farm to satisfy the estate taxes. Personally, we have a second-to-die insurance policy to cover the taxes for our inheritors. The cost of the premiums is the major annual household expense, exceeding all others by a factor of two. It pains us much to pay to keep what we already have acquired. None of it came from another inheritance, just hard work, frugal living, disciplined saving, and intelligent investing over many years. I know, I know, … these behaviors are frowned upon in contemporary society. We are thankful on having been blessed, but cringe to think the government will get their paws on much of it in the end.

  10. Bob on July 22nd, 2010 9:31 pm

    Dr. Tackett,

    For your story on this, you might try to contact Roy Rogers Jr. about what he went through when his father passed. I heard his story on the radio several years ago. I don’t recall the exact amount, but you would not believe what our government says a stuffed horse (Trigger) is worth. And they don’t want the horse!

  11. Brian on July 23rd, 2010 8:18 pm

    Dr. Tackett

    Thank you for your insights and humor on this serious issue. What I find most troubling is your mention of the fact that the populous increasingly finds little wrong with this confiscatory mindset! One prime example of this occurs every year beginning around the end of January. Most of the people I work with are so excited if they get a tax refund check. They are happy to be getting money “from the government”! I have tried to point out the flaws with this thinking, and encouraged them to up the number of their withholding allowances so as to end up owing a small amount of additional taxes, rather than receiving a refund. Most agree in theory but few if any are willing to change their actions. One of our corporate VPs (Federal Express – not a government entity despite the name) addressed us today. He was very sharp with a great deal of business experience. Among other things, he made it very clear that the “stimulus” is not self-supporting because it has been focused primarily on government jobs and is therefore not self-sustainable. He was also very adamant about the fact (as others have been) that our nation’s current financial path is unsustainable, and that taxes will soon be going up, not just on the “wealthy”, but for most income categories.

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