This is why I love Wyden. He's honest, acts on his principles, and won't cave to a crook like Norquist. Bravo, Senator. You earn your title of "Honorable" better than anyone else I've seen.

Yes, thank you Ron.

Warren Buffett recently made a couple of great points. It's not a "death tax" to the one who inherits it. He said, "Why should it be treated differently than winning the lottery?". He also pointed out that that money may never have been taxed before. He has profits on a lot of investments that he has not taken and would not have been taxed at all if he should die tomorrow.

Karl,

thanks for mentioning Buffett. As reported this week in every newspaper in the country, Buffett has entered into a structured gifting program with Bill Gates charitable foundation. The value of the gift exceeds $30 Billion dollars.

People vote with thier wallet. Warren just voted. He decided that the Gates charity is a much better custodian of his wealth than the US Gov't.

Buffet is actually a proponent of the estate tax and is against its repeal. He has said so publicly.

It is quite interesting that he has decided to keep the Gov't from getting their paws on 90% of his wealth though.

I am opposed to a complete repeal of the death tax as it would have an adverse effect on charitable giving. However, Buffett was fortunate. His wealth is in a liquid asset. He also will be one of the 100 richest people in the US after gifting 90% of his Berkshire stock.

There is a middle ground that protects family businesses and farms from estate liquidations.

Here is a start: Did you realize that an estate must make the full payment (that can range from 50-70% of assets) in just 9-18 months?

Why don't we let estates pay this off in installments so that businesses or family farms don't have to be auctioned off?

Danj:

Since you seem to think this is about family farms, I'll make you a deal.

To pay for the Estate Tax repeal, we also repeal every single agricultural subsidy in the US. The numbers should just about balance out.

All those family farmers who hate the estate tax should be willing to get off the government trough in exchange for getting rid of this hated tax that is ruining family farms.

Think they'll go for it?

Here is a start: Did you realize that an estate must make the full payment (that can range from 50-70% of assets) in just 9-18 months?

Bullshit. Every word in this sentence is complete bullshit.

50-70% of assets? Nonsense. No one pays that. Roughly 99 percent of estates pay no estate tax at all. Among the few estates that do owe taxes, the "effective" tax rate — that is, the percentage of the estate that is paid in taxes — averaged about 19 percent in 2003, according to the IRS, far below the top estate tax rate of 50 percent that these estates faced. Why is the effective tax rate so much lower than the top tax rate? Estate taxes are due only on the portion of an estate’s value that exceeds the exemption level, not on the entire estate. For example, at today’s $2.0 million exemption level, a $2.5 million estate would owe estate taxes on $500,000 at most. In addition, a large portion of the estate’s remaining value can be shielded from taxation through available deductions (for charitable bequests and state estate taxes paid, for instance).

9-18 months? Nonsense. IRS Code Section 6166 allows you to pay the estate taxes due on a closely held family business in installments with interest over a 15-year period if the business remains in the family. This is applicable to family farms and other family businesses. For the first $1 million in closely held business property, interest is charged on the balance of the estate taxes due at the rate of 4 percent per annum. For estates valued at more than $1 million, interest on the excess is calculated at the prime rate charged by banks during the six month period ending March 31 and Sept. 30 each year. From my point of view, 4% interest seems pretty damn generous. Especially on a business in which the net value is large enough to generate a tax bill in the first place.

The actual tax code is even more generous than I described. Under the 15 year payment schedule I described above, the entire tax payment can be deferred for the first 5 years with only interest due and then paid in 10 installments for the next 10 years. That's one heck of a lot more generous than any of us ever get when we pay our normal Federal taxes. Here's the actual IRS code:

Section 6166 of the Tax Code

This entire line of discussion perfectly exemplifies why I have been saying it is time for Republicans to (gasp) actually communicate with Democrats rather than cling to ideology and talk only to each other. When ideals, such as elimination of the "death tax," are challenged people must either look at the facts or look foolish. On the other hand, when political opponents are demonized and those who work with them ostracized, as too often occurs today, good people remain ignorant and the public is ill-served.

We would probably just be better off if we eliminated the estate tax completely. It doesn't bring in a lot of money compared to other revenue sources and it is a constant source of conflict. There is a huge amount of energy that goes into escaping the estate tax that could be put to better uses. The basis for the estate tax is basically just envy and class warfare which seems like a poor foundation. I'm all for a total elimination of the tax and if we need the revenue then pick it up by adjusting the income brackets or add on to the gas tax or some other consumption type of tax.

Torrid,

For a specific example of how the estate tax can impact a family business, see the Eugene Register Guard, front page, Thursday the 22nd.

This online version of story is a scaled down version of the print version. The print version estimates the value of the estate @ $21,000,000 with taxes due of $14,000,000. The print version also discusses how the IRS is fighting with the employee shareholders in what could actually impact the existing business and employees that remain. Don't take my word for it, go to the Library and look it up, or e-mail the reporter, Sherri Buri McDonald.

Kent,

You will see in the article that the effective estate tax is 70%. It goes without saying (so why did you even say it?) that smaller estates pay a smaller estate tax percentage.

Please get you facts straight and keep your emotions in check.

By the way, paying interest using the prime rate is very expensive. Do you even know what prime it? It is currently 8.00% per Bloomberg.com.

And yes, of course 99% of estates don't pay estate taxes. Do you even know the definition of an estate? An estate is the value of assets left after death. So, naturally a person that dies with $400,000 in assets won't pay any estate taxes. Most people do not die with large enough estates to be taxed. Business owners do! You know, those people that actually employee other people.

Kent, before acting like an authority, do us all a favor and actually become one. As for the rest of your Liberal blow-hards, pick your debate champions more carefully or you'll end up with another winner like John Kerry carrying your water.

Have a nice day,

Your Favorite Troll

Dan J:

Don't let Kent bother you. He's probably never borrowed any money or had any employees, so paying interest or making a payroll are foreign concepts.

If you are primarily a recipient of government subsidies, it's very easy to support taxing everybody at higher rates.

I read the Register-Guard story and a couple of things leapt out at me. First, the money being discussed was not being transferred to family members- it was being transferred to a business. Second, the reduced transfer rate of that business, according to the story, hasn't forced the liquidation of the business, the firing of any employees or any of the horror stories often told. Thirdly, the tax bill (which Dan J attributes solely to the inheritance tax) included revaluation of non-arms-length transfers of stocks which had been undervalued. So we really don;t know how much of the tax bill was actually inheritance tax and how much was correct fraud/oversight in the 1997 transfer of stocks. We also don't know what the rates would be had Mr. McDonald left the money to family members, and we know that at least some of the estate was in goods that had never had their gains realized (I.E. hadn't ever been taxed before.) Finally, we do know that Mr. McDonald's company would not exist if there were no roads for his trucks to travel on, educated employees for him to hire, telephones and the internet for him to conduct business over, courts to enforce his contracts, police and fire departments to protect his property, the FAA to ensure his employees ability to travel, the energy and water utility boards to provide his company with power, water and sewer or myriad other direct and indirect goods and services that others' estate taxes bought for Mr. McDonald and his business.

Peter: the article says his estate was left to his EMPLOYEE OWNED company! Weir McDonald could have created a foundation with his name on it, or given his estate to the Salvation Army. In both examples, he could have avoided the estate tax entirely. Instead, he chose to give it to his employees.

The Socialists among you ought to be arguing in favor of an estate tax exemption for employee owned companies that receive an inheritance, not debating the nuances of $17 million dollars worth of Federal and State taxes, interest, and penalties. Sheeesh.

Jennifer:

That's lovely that his company is employee-owned. It's still the fact that it fails to undermine the agruments for an estate tax. Mr. McDonald's employees (I believe the majority shareholder is his adopted son) get to benefit from the goods and service those $17 million can buy.

I suppose socialists could rejoice at one leaving money to employees. But it is rather beside the point here.

$17 million is a lot of money to tax any family owned business, let alone the Weir McDonald estate. I am surprised you would even be willing to debate this specific example.

<h2>Mr. McDonald's "stepson" is not a majority owner of the company which inherited the estate, not according to the Statesman Journal.</h2>