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My friend and Sorensen Institute classmate Tom Fox has just started writing column for The Washington Post, on the topic of leadership.
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In 1993, Sierra released a screensaver that told a story—taking months to unfold—of a man stranded on a tiny desert island. I hadn't thought of this for *years*.
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Now I see why teabaggers are so upset: they've got some wrong ideas in their heads. I mean, if I thought that 40% of the GDP went to taxes, I'd be upset, too. (It's more like 6-15%, depending on how you count.) And if I believed that an American making $50k/year paid 25% of that income in federal income taxes, I might be annoyed. (It's 1.7%.) Heck, two thirds of this bunch thinks that taxes are higher now than before Obama became president. (They're lower. For everybody.) Maybe somebody could gently explain things to them and they'll calm down.
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A burrito is not a sandwich. Though this might seem obvious, it took a 2006 legal dispute between Qdoba and Panera to settle the question in the eyes of the law.
Comments are closed.
meant to send you that Tea Party link, but you seem to have got there first.
(also, Tom Fox is both your friend AND your Sorensen Institute? by which I mean: I think your sentance is missing a word or three.)
I would say that most in the Tea party are not as ignorant as the average american. Very few people are aware of how much taxes are paid by the top 1%. I have seen code pink be just as classless and even dumber.
Also the article is incomplete and leaves a very important tax that is going up in reality by many times but by Washington speak not at all. That would be the estate/death tax whose exemption this year expires and goes up to 55% next year.
Many older tea party americans have actual talked about how if they die this year, how much in taxes they will save in 2010 as oppose to next year. This is a real problem for estates involving larger family farms and businesses.
That is just one tax that I have heard tea party complain about. There are also people in the movement that have stunned me with their knowledge of the founding fathers and passion for making this country better.
Waldo you can rightly spend days writing about the excess and stupitiy of some tea party people but there is a part that is well informed, passionate and as patriotic as anyone I have met. It’s quite unfortunate those people don’t make compelling TV or newspaper- or get to lead the movement.
Perlogik, your older tea party Americans are either very rich or very wrong. In 2009, the exemption for estate taxes was $3,500,000 – in other words, you had to have a taxable estate of $3,500,001 before you paid a dime in estate taxes. I doubt most of these folk have anywhere near that.
Oh, and there’s an unlimited marital exemption for estate taxes, meaning that surviving spouses can inherit an unlimited amount of money without paying estate taxes – we’d have to additionally assume that your older tea party folk were single, widowed, or gay/lesbian.
In other words, this is a fine example for Waldo about tea partiers being desperately misinformed. Thank you for proving his point so well.
Not entirely true. There is a segment of the population (the poor) that pays nothing in taxes… and that’s fine with me. But taxes on cigarettes jumped since Obama took office. The AP notes, “This is one tax that disproportionately affects the poor, who are more likely to smoke than the rich.”
So their taxes have gone up… just not the income tax. But it’s good to be specific.
Brian I will assume that your post is out of lack of knowledge and not trying to mislead. No estate-tax returns will be necessary in 2010, while a substantial increase in estate liability will return in 2011 as the exemption returns to the 2001 level.
Year Exclusion Amount Max/Top tax rate
2009 $3.5 million 45%
2010 * Repealed * 0%
2011 $1 million 55%
$1 million is not very much for a farm or business and it doesn’t affect a huge amount of folks but a return to the 2001 levels will mean a much higher tax level for older american by any rational measuure. Also not everyone gets the marital deduction with a 50% divorce rate. It’s a higher tax that will go up under the Obama admin
Perlogik,
If you honestly believe that Congress won’t reset the exemption amount to either 3.5MM or 5.0MM (as the two competing bills currently have them set), then I have Iraqi real estate I’m selling, and you should email to set up a bargain. Ain’t happening. Will likely have a COLA attached to it, making further adjustments unnecessary. The estate tax exemption got unwieldy because it was originally set up without any cost of living adjustments, googobs of years ago. Congress should fix that this year.
As for your $1M comment, I’ll refer to Michael Steele’s comment about $1M not being a lot of money, and snicker. God, I hope you guys run on that one.
You’ve offered no evidence that the estate tax threshold will be adversely affected (i.e., lowered to include more Americans) under the Obama administration, because there is no evidence. Zilch. Nada. The tables you quote were established in 2001 through passage of EGTTRA, and signed into law by President Bush. Congress will reset those rates to either 3.5M or 5.0M, Obama will sign it and be done with it. That’s not a tax increase.
Regardless of the level of estate taxes, I don’t quite follow how they might represent a “higher tax level for older Americans”. Do you mean the “older Americans” who are dead? Because taxes don’t impact dead people, on account of them being dead and all. It’s only the estate (and, effectively, the heirs) that pay estate taxes. And, frankly, I far prefer taxing inheritances (where people get windfalls, not by virtue of their hard work or merits, but due to circumstances of birth) than I do taxing income derived from the sweat of one’s brow. It seems more in keeping with the idea of America as a place where one’s position in life would be determined by hard work, rather than pre-destined by parentage.
Perlogik writes, “Very few people are aware of how much taxes are paid by the top 1%.” That’s probably true. But it’s the tea-partiers who are making a mountain out of an nonexistent molehill (“Obama is taxing us to death!”) and crusading on misinformation. That makes their ignorance worse.
Are there well-informed leaders of the movement who are rushing to correct the misapprehensions of the misinformed? Is the correct information (taxes are not higher now under Obama, here are the correct percentages) being disseminated at tea-party meetings? If not, then either the leaders are as ignorant as the worst of the followers, OR they’re cynically allowing the ignorance of the followers to fester.
Oops. That should have been “Sorensen Institute classmate.” Thanks, James.
Brian you or I have no idea what the exemption MIGHT be next year only what it’s schedule to be. And that would be a significant increase in estate revenues from this year or any year since 2001. If Obama signs the bill you speak of you will be right but that’s not what it looks like today. As for no evidence- um what I’ve quoted is the law unless Congress does something different.
Harry the older americans I speak of are worried about their ability to pass on their hard earned assets to those they raised. Will they be dead when that happens, yes. Will their taxes go up as the law currently stands , yes again. Could this change before 2011, yes again but I’m not hopeful. But Harry by your logic why not let the government take it all and make it 100%. I don’t think that’s what you meant but otherwise we’re just talking about where the line is.
Cecil I agree with you and my point there was not to paint all tea partiers with the same brush. I don’t think I showed much support for any of their leaders but spoke to many folks I’ve met who are concerned, sincere and well informed. Those folks will take this debate to the ballot box as our forefathers designed.
Perlogik, you again attribute to Obama what is not attributable to Obama. Obama did not create the estate tax schedule that is currently in effect. 2001-era Congress (222R – 211D in the House, 51D – 49R caucus in the Senate after Senator Jeffords bolted the Republican Party) passed that bill, and President Bush (R) signed it. If one has beefs with our current estate tax schedule, there’d be a good place to start.
As for how Congress and President Obama would *change* this estate tax schedule to be more fair, sure, there are good things they could do and bad things they could do. Bad would be doing nothing and letting that estate tax bounce back to $1M. Worse would be doing away with it altogether and permitting unlimited intergenerational transfer of wealth, which is a favorite rallying call of some (but not all) Republicans. Better would be resetting the limit to 3.5MM with a cost of living adjustment provision to increase over time. Best would be 5.0MM. Either of the last two would be fine.
So, it sounds like you’re an advocate for change here? And you’d support a bill or provision to reset the estate tax exemption to 3.5MM or 5.0MM? We may actually agree here, facts be damned.
Brian if there is no change to the Bush’s tax schedule it then becomes Obama’s. Doing nothing becomes doing something.
I think we are talking about where the line is and where it should be. My fear is with inaction a $1 million is too low and currently many tea partiers are fearful of inaction. I hope you are right and something is done. If not there is little doubt that death/estate taxes will go up a great deal.
I don’t want limitless transfer of wealth either perhaps we aren’t that far apart. Smart democrats will want to pass something before November lest this to will become a major issue with the AARP crowd
See that’s funny, my perception of Tea Partiers is that they’re far more afraid of action than inaction. :)
I’m quite confident that Democrats will not allow the estate tax to reset to $1M. I’m actually pretty confident that they’ll retroactively apply a 3.5M or 5.0M threshold on 2010 claims; my understanding is that they can do this in the current year. Part of the issue is that Congress has spent so much time on health care that all kinds of other worthy conversations – like this one – get pushed back because there’s only so much time in the day. This whole boondoggle started in 2001 when House Republicans wanted to be able to say they “repealed the death tax” but only financed it for one year (2010). I too await its resolution because it does make good estate planning hard to do as it stands now.
“…if there is no change to the Bush’s tax schedule it then becomes Obama’s. Doing nothing becomes doing something.”
The only reason Bush did what he did was so that he could pass the tax cuts under reconciliation (or majority rule, if you prefer). In either case, it was a typically gutless move to pass the responsibility onto another president. (And yes, Obama and the Dems have done the same with Medicare payments and health reform.)
Essentially, what is being said here is that Obama has to come behind the elephants with a broom and shovel.
P.S. to Waldo: I have been remiss in complimenting you on your anti-spam methodology that requires the GOPers to correctly name the opposing party instead of their “Democrat party” meme.