Richmond College '09
One of the biggest differences between the two American parties is taxes. Republican success is based largely on advocating for lower taxes (for the most part) and no one likes paying taxes. Do keep in mind taxes are a necessary part of any civilized society to be run by a government.
Think of government as a business. The government's business is that of the people -- their prosperity, pursuit of happiness, and safety. How does government charge for its business? Taxes. Under this paradigm, government is the only business that can make their charges (taxes) compulsory. However, have you ever imagined a business that charged for its services from people who have deceased? That's the whole point of the estate tax (aka: the death tax). This is simply just wrong.
Let's start with the major premise the death tax is based on. Many would argue that it prevents or at least inhibits a permanent economic aristocracy. This Marxist logic is quite the contrary because it hurts small business owners who can prosper and contribute to society with their services. Unlike Mr. Calhoun's crowd, conservatives (not all Republicans) realize this idea that benevolent intentions can cause traumatic outcomes. The law of unintended consequences strikes again!
Consider, for example, the situation that Brad Eiffert of Columbia, Mo., is in. He is vice president of family-owned Boone County Lumber. His father founded the lumber company in 1964 and now brings in $12 million to $15 million a year with many assets in equipment and land. Under current federal tax law, after the Bush tax cuts changed it from a 55 percent maximum with a $1 million exception to a 45 percent maximum with a $3.5 million exception, Boone County Lumber qualifies for the tax. The company must either pay $60,000 in life insurance premiums each year to cover projected estate tax payments, or the company would risk liquidating when Brad's father dies.
Regardless of what Mr. Calhoun's Marxist response printed to my right may argue about the death tax promoting aristocracy, the death tax hurts our economy. Someone inherits their recently deceased uncle's business and its assets, the government taxes a percentage of the inheritance. That person has less capital with which to continue the business' operation and the service it provides. Last time I checked, the world markets were headed towards chaos and credit was being choked in the United States. Lowering the death tax would provide for more capital for businesses such as Boone County Lumber without taking loans from financial institutions.
I'm not arguing that the death tax has played a major factor in recent economic and financial developments of the past month, but it certainly has not helped. Sen. McCain wants to lower the percentage rate of the tax to 15 percent with a $5 million exception and make that proposal permanent. This reasonable plan brings the percentage to a lower rate as opposed to Obama's 45 percent rate with a $3.5 million exception, what current law says. Contrary to Obama's rhetoric, he would actually prefer to keep the status quo in this case while McCain wants a less harsh death tax so that business can thrive.
I guess hell just froze over.
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