Talking Economics - Estate Tax

By K. Russell Carlsson, Rogue Economist

Before I get into the topic at hand, I must tell you that my real name is Keith. If you see me at the bar or the ballgame, call me Keith. Calling me K. Russell will earn you a spirited punch in the dick. My agent insisted that I publish under my first initial and middle name “to lend gravitas” – which is weaselese for saying people only trust economists who act, sound, and dress like dorks – so there’s that. Now to business:

Estate tax reduction is in the news, with the party in power trying to attach it to a minimum wage increase bill. (I will address the minimum wage question in a later column. I want to keep these short to match the average attention span for a conversation immediately following utterance of the word “economics”. I’m here to help you – not make you look around the room and check your watch like a Vancouver hooker working a 16-year-old white boy.) Sorry for the long parenthetical – I’ll summarize the estate tax concept in the next paragraph.

The estate tax is little more than a capital gains tax on the assets of a dead person. Capital gains are realized when somebody sells an asset for more than what they paid, and those gains are only taxed upon their transfer of ownership. Pussy, cock, anal sex. (I had to get technical and boring, so I thought I’d bring you back around.) Often those as-yet-untaxed gains are on the assets (most often stockholdings) of a company of the dead person’s founding which the dead person wishes to leave to his or her children intact. In order to prevent inheritors from having to sell off the family business in order to pay estate taxes, Congress authorized an exemption from taxation on the first $2 million or so of an estate being transferred. Thus ends the summation of the estate tax concept - I hope that didn’t hurt too badly.

Many members of the political party in power consider lowering or eliminating the estate tax critical to America’s economic future. They wring their hands and bemoan the plight of the poor family farmer whose family has to sell everything just to pay the evil Government what they like to call the Death Tax. Bullshit. I grew up in farm country, and I know what a real family farm is worth. The only way I know a true family farm could be worth more than $2 million is if the words “street value” usually follow valuation of its crops. In fact, unless its founder-corpse was a drooling goat-molesting goober, every business entity currently subject to the tax is in some way incorporated in order to ease the transfer of ownership and minimize the tax burden - and frankly no decent government should make provisions for the feeble-minded fuckfruit of rich morons who failed to do so at the expense of the national treasury.

In summary: whether it is called the Estate Tax, the Death Tax, or the Reaper’s-Nutsack-Slappin’-Against-Your-Daddy’s-Ass Tax, as written, it is quite possibly the fairest tax in all the tens of thousands of pages of IRS code. Anybody who argues against it is either a raving idiot or a paid-off fartcatcher for the wealthy elite. It can be said this is just one man’s opinion, but that one man is a trained economist opining in his field of expertise - suck on that, O’Reilly.