On February 17, 2005, Congressman Kenny Hulshof (R) (MS), and Congressman Bud Cramer (D) (AL), introduced HR 8 in the House of Representatives, which permanently repeals the Estate Tax (death tax) in 2010. HR 8 passed with a vote of 272 to 162.
From deathtax.com: "If you're concerned that eliminating the Death Tax will add to the budget deficit, don't be. Independent studies reveal that it would actually help reduce the deficit."
From deathtax.com on the legislative activity page: "President Bush has included $256 billion in his budget this year, for permanent repeal of death tax in 2010 and continues to advocate for permanent repeal."
Correct me if I"m wrong but, doesn't spending $256 BILLION dollars in ONE YEAR add to the budget deficit? Anyway I wanted to learn more so I visited the IRS website and, boy, did I learn something!
For starters, after valuating a person's estate (which allows for a fancy Section 2032A that can decrease the taxable value by $900,000) only Estates with a Taxable Value of over $2,000,000 are required to pay.
So, let's say you had personal assets (not shared with anyone else) with a taxable value of $2,100,000 at the time of your death. First, you subtract the $2 MILLION deduction standard deduction. The IRS table says your estate would pay $2,596.00 plus 35% of the excess over $10,050, for a total tax of $34,078.50.
The number looks big to those of us who don't have the proverbial pot, but that's only 1.13595% of an estate that began at $3 MILLION.
Okay, so how big of a problem is this in Arkansas? For 2004 (figures not available for 2005) estate tax collected by the federal government from Arkansas was a whopping six-tenths of one percent of estate taxes collected nationwide. Less than 1%.
With a national debt of nearly EIGHT and ONE-HALF TRILLION DOLLARS that grows by $1.68 BILLION PER DAY, should our government be occupying itself with giving a tax break to people with estates that exceed $2 MILLION after special valuation and deductions?
So, the Congresspersons from Mississippi and Alabama receive Uncle Brice's H-n-A Award for writing legislation that benefits only the upper 2% of our population: a clear and present sign that their heads were tucked firmly...well, just look at the photo.
How Arkansas Congress Persons voted: Marion Berry, John Boozman, Mike Ross voted to give the tax break to wealthy Americans. Vic Snyder voted correctly.
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