Ok, the kiddos are off for the next 9 days, I have a dozen boxes of wine to organize and deliver throughout the mountains on Monday and Tuesday, Thanksgiving is Thursday.
Meanwhile Washington is a freakin mess. The same old divisions are in place with both sides to blame. Silver is projected to go up 500% in the next 36 months (go buy a few ounces now!) and we’re heading towards the so called fiscal cliff on January 1st. Jobs are being cut everywhere (Hostess went out of business yesterday, the twinkie people) jobless claims have skyrocketed after the election, surprise surprise and lots of people are losing their jobs. Israel is getting ready to invade Gaza, what? And on top of that, look at some new legislation proposed by the guy lots of people voted for, here’s just one example.
Rancher Kevin Kester works dawn to dusk, drives a 12-year-old pick-up truck and earns less than a typical bureaucrat in Washington D.C., yet the federal government considers him rich enough to pay the estate tax — also known as the “death tax.”
And with that tax set to soar at the beginning of 2013 without some kind of intervention from Congress, farmers and ranchers like Kester are waiting anxiously.
“There is no way financially my kids can pay what the IRS is going to demand from them nine months after death and keep this ranch intact for their generation and future generations,” said Kester, of the Bear Valley Ranch in Central California.
Two decades ago, Kester paid the IRS $2 million when he inherited a 22,000-acre cattle ranch from his grandfather. Come January, the tax burden on his children will be more than $13 million.
For supporters of a high estate tax, which is imposed on somebody’s estate after death, Kester is the kind of person they rarely mention. He doesn’t own a mansion. He’s not the CEO of a multi-national. But because of his line of work, he owns a lot of property that would be subject to a lot of tax.
“Our number one goal is to repeal the estate tax, to get rid of it, not have it for every generation, when I die and my kids die and so on,” he told Fox News. “For everyone to have to re-purchase the ranch or farm over and over for each generation, that’s inherently unjust. So what we’re doing is asking our politicians to understand that and repeal the estate tax.”
That, however, is unlikely. Currently, the federal government taxes estates worth $5 million dollars and up at 35 percent. When the Bush-era tax rates expire in January, rates increase to 55 percent on estates of $1 million or more. While some Republicans want to eliminate the death tax entirely, President Obama has proposed a 45 percent rate on estates of $3.5 million and up.
“The idea behind the estate tax is to prevent the very wealthy among us from accumulating vast fortunes that they can pass along to the next generation,” said Patrick Lester, director of Federal Fiscal Policy with the progressive think tank — OMB Watch. “The poster child for the estate tax is Paris Hilton — the celebrity and hotel heiress. That’s who this is targeted at, not ordinary Americans.”
But according to the American Farm Bureau, up to 97 percent of American farms and ranches will be subject to an estate tax where the exemption is set at $1 million. At that rate, the federal government will pocket $40 billion in 2013 and up to $86 billion in 2021. That contrasts with just $12 billion this year.
Many Democrats argue the tax promotes equality among classes, especially in capital gains — or stocks passed from one generation to another. Since stocks are only taxed when they are sold, the government can’t profit from long-term investments without the estate tax.
“Very large portions of very wealthy estates are tied up in stocks and they have never been taxed,” said Lester. “The estate tax is one of the ways we make sure the wealthy pay a little bit more as an overall share of their wealth and income compared to low-income individuals.”
Many Republicans argue the opposite. Because the estate tax falls on assets, they say it hampers investment by reducing incentives to save and invest. A pending estate tax could become a disincentive to invest in an otherwise viable business, forcing older people to liquidate or shift resources out of an ongoing business and into a trust or tax-free investment.
“We’re not millionaires in the terms of making a million dollars a year,” said Kester who lives in a modest home and whose family — not outsiders or a corporation — runs his ranch. “I have a half-a-million dollars in soil.”
Kester can’t spend it, without selling land. But by selling the land, each year the ranch would become less viable.
The estate tax dates back to 1916 when then-President Woodrow Wilson imposed the tax of 1 to 10 percent on the wealthy because World War I reduced federal government revenues. Under Franklin Delano Roosevelt, the tax rose to 77 percent, as Congress tried to prevent wealth from becoming concentrated among a few powerful and super-rich families.
Ironically, many nations historically more concerned with class and wealth — namely Russia and China — have since abandoned their estate taxes.
So there you have it, socialism at its best. The gov wants everyone to be equal. Forget that my dads family homesteaded a ranch 100 years ago and that he worked hard all his life. Anything he left my Mom that will someday be left to us, the government wants to take almost half! The misses best friends dad (Kristin) who died a year or so ago, said he wanted to die BEFORE the estate tax was changed so his kids wouldn’t lose everything. How sad is that. Now as you get older you have to either get a fancy lawyer and accountant and transfer stuff to your kids before you die and hope for the best, or else let the government take what you earned, and the land your family has owned, for in many cases, generations. And again why is this, so everyone is more equal, so everyone has the same, except of course, the big wigs in Washington. They love to install laws for us but not for them. The number one example of this is Obamacare, not sure if you know, but it doesn’t apply for any congressmen or senator, just for us regular folk. They get their own cadillac plan.
Alright, I feel much better, venting a little bit on these jerks that supposedly “serve the people”.
The boys had a good day and are excited for the break. As I said, we’re off to Aspen for a few days on Monday but first we have lots to do today and the big Bronco game tomorrow. We’re supposed to win which always kind of scares me, sure hope we do.
It’s 5am, both pups have had their breakfast and I need to go wash the car and hit the gym. The misses also wants to get the Christmas stuff down from the attic today as Christmas will be here and gone before you know it. Uncle T and my mom both have their trees up already. We might have to resort to making gifts for people this year as we’re still working on last years taxes and a bunch of other unforeseen expenses, primarily medical. Oh well, we’re healthy and have a roof over our head, unlike many on the east coast who are still in shelters after the storm. I guess their still waiting for the gov to, as the big O says in his many photo ops, fix everything. Â Wonder how long that’ll take.
You see, you have to put it all into perspective. It’s not what you don’t have but rather what you do have. And by the way, things are just things. They’re nice sure, but they’re not what’s most important. Funny but that’s another one of those things you learn once you get older.
Have a good weekend, go Broncos and take care. God Bless.
Tom says:
Not to sound “upity†but I think you meant blow this popcicle stand! LOL
Happy Thanksgiving to everyone who reads this Blog:)