The Estate Tax in the Big Picture

estate-tax

A big part of the self-gifting buried in the GOP Tax Scam (that chimera they call a “tax reform” which I analyzed in great detail yesterday) is the elimination of the federal estate tax. And while this is so clearly a gift the rich are giving to themselves, the Republican Party and its allied corporate media amazingly manage to get a bulk of the people whom their actions harm to cheer and support them (as they have been able to do since Ronald Reagan who was an expert in making dastardly deeds sound good). What is really going on when a poor or middle-income person defends the rich against an estate tax? It boggles the mind of anyone who understands the estate tax. So, how does this abstruse behavior come to be? 

To solve this enigma, we best get the starter questions out of the way: What is an estate tax? Who does it apply to? What is its intention? To make it short, an estate tax is nothing more than a public effort to prevent generational concentration of wealth which creates the modern equivalent of aristocratic dynasties that lord it over everybody else like a gang of demon lords. What did someone like Paris Hilton ever do to earn the huge wealth she simply inherited? What do we working people owe those who are rich because they were born rich? Why are some of them famous for being famous simply because they were born rich? As Americans, we all understand – or don’t we? – that it is wrong to be born “blue-blooded” as the count, duchess, or king who gets to rule and tax us, living in splendor while we struggle in poverty and are denied a voice in our affairs and a fair share of our country’s resources and prosperity? Our founders fought a revolutionary war of independence to throw off the yoke of the British aristocracy.

And now there are working Americans who defend the modern equivalent of those feudal aristocrats from a very weak attempt to restrain the wealth that the rich pass on to their idle children, thus creating the next generation of moneycrats. How did our nation turn upside down like this?

How can a moral person in modern America justify to protect the rich from an estate tax which is intended to prevent the creation of a feudal system? And this when that same corrupted Congress claws back the comparatively paltry life savings form the poor and middle class in order to give yet more tax gifts, tax loop holes, and government subsidies to the rich?

Why this complete reversal of the American Revolution?

Why would someone who is never going to find him or herself in the shoes of a multimillionaire or billionaire feel sorry for those wealthy demon lords who deny him or her their fair share of the world that was provided for us all? Why would that working class citizen, an heir to the American Revolution, side with the ones whose riches come from squatting on our lands, exploiting us in our places of work, sending our jobs to China, crashing our economy, poisoning our air and water and otherwise destroying our environment, cheating us with overpriced self-destructing products, foreclosing on our homes, gouging us with excessive rents, pushing us into throttling debt, raking us over the coals in a for-profit healthcare system, extorting us with inflated medication prices, slaying millions in for-profit wars, and buying up our government and jurisdiction to chain us into our place as their peons and serfs for all eternity?

Might the answer be gullibility?

To pull gullible people to their side, the rich smeared the estate tax as a “death tax,” which naturally sounds like a bad thing for anybody who doesn’t see through the slight of hand used to make a good thing seem bad by giving it a bad-sounding name.

Let us here try to not fall for such dirty tricks, and instead take an objective look at the nature of the estate tax. It has nothing to do with death, except for its timing. What it really is, is an inheritance tax such as other anti-feudal governments also impose, except that they apply at much lower inheritance sizes in other countries. In the U.S. you had to inherit huge wealth for our estate tax to come into play, at all. And when it did, the government would grab a chunk of the wealth to essentially redistribute it to the less fortunate among us, following that idea that our country with its resources and economy belongs to all of us and there ought to be no aristocracy enthroned above us. The measure didn’t even get close to leveling the playing field, but it at least untilted it slightly.

The estate tax only ever hit the richest of the rich, not touching the lesser rich at all, and being still very generous to the very rich.

But what if you are poor? Does our government protect your home, farm, or life’s savings with that same generosity?

If you’re poor or a middle-income earner hit with a catastrophe such as an expensive medical emergency, we have (or at least once had) various kinds of welfare programs stemming from the New Deal, Great Society, and War on Poverty periods in our nation’s history. However, while they may have been straightforward and purely helpful originally, nowadays they tend to come with a catch called means testing. What this amounts to is that you have to sell that little family home you may have inherited or worked and saved hard for all your life before you will get any help. So, the government which is so kind to the rich leaving them with all or most of their inherited wealth while also showering them with tax gifts, tax loopholes, and corporate subsidies, will essentially confiscate your little piece of assets before helping you in your need. It will in essence take away that one piece of wealth that kept you from hopeless poverty as it protected you from having to pay high rents to landlords, rents which nowadays for many of us exceed half of our earned income.

Likewise, if you have no home of your own because you inherited nothing and were held down too much all your life, for instance by constantly getting laid off and loosing most or all of your savings between jobs, the government will still demand that you give up that nest egg you saved up all your working life to be able and own a home some day. You may have been saving hard all your life to try and come up with a down payment for your own home or at least enough dough to maybe buy an old, leaky trailer. But now, those life savings that you worked hard for, ate bad food for, and denied yourselves vacations and other pleasures for, are taken away. You are forced to give them all up before our poor excuse of a social safety net will help you in your need.

This is the equivalent of the government imposing a wealth tax on you (not called an estate tax because you are still alive and it isn’t officially called a tax), one with a far higher tax rate than the federal estate tax the goons in Washington are currently repealing to serve themselves and their wealthy donors. The federal estate tax only takes 40% of wealth such as exceeds the completely tax free exemption of $5,450,000 per deceased person ($10.90 million per married couple). When, as a poor or middle-income person who has all life been struggling to reach some degree of financial security, you fall on hard times and need help, ALL – yes ALL – of your savings and home ownership – save a few thousand bucks of exemption – will be stripped from you. That’s a 100% tax rate instead of the 40% tax rate the rich are favored with in their estate tax. And while the rich get $5 to 10 millions transferred to them tax-free, you only get to keep a few thousand of your hard-earned life savings. (the exact amounts depend on which government program applies; for instance an individual cannot have more than $2,000 in countable assets before becoming eligible for SSI disability)

So, the government – even before the current GOP Tax Scam bill – has all along been treating the rich with kids gloves, preserving a lot of their wealth even at times when it should be thoroughly redistributed, while it has for a long time been ruthlessly coming for our measly savings when we are in dire situations we should be helped to come out of unharmed rather than being reduced to square one.

How do you like this double standard?

Maintain the wealth of the rich but rip away the measly savings of working people at those moments when they are weakest and in need of help. Rip them away in order to give more gifts to the rich. That’s supposed to be moral or in keeping with the founding principles of our nation that declared the government the servant of the people requiring it to “promote the general Welfare?”

It’s neither moral nor in keeping with our founding principles. How did this reversal happen?

Remember this: whenever the bought-and-paid-for politicians from our twin-party tyranny give tax gifts and government subsidies to the rich, they always later cry about an unbalanced budget and claim that they are now forced to cut benefits for the poor and middle class. That’s how our government’s role as economic arbiter gets warped into taking from the poor and giving to the rich. It’s been the mechanism of operation of this racket for decades. If or when it is written into law, the latest “tax reform” will in the near term lead to cuts in Social Security, Medicare, and a range of other social programs for children, the elderly, minorities, and others. With such and similar tricks, our country – which in its beginning was widely shared among the settlers – has become the more or less sole property of the rich with the assistance of a bought-up government.

To sum it up, the current GOP tax scam is merely a continuation of what the Republicans and “Democrats” have been doing to us for at least a generation. However, we are getting to a point where we cannot bear this rip-off any longer since most of us are already standing on our last leg. Furthermore, the GOP-crooks are using this as a backdoor way to finally destroy the Affordable Care Act, throwing millions off of health coverage (thereby killing many of us), after the American People made it clear to them all year that they don’t want this to happen.

This is yet another sign that we must become bolder, not merely resist further rip-offs, but demand true progress, like Medicare for All, and kick out those false representatives from government when they brush aside our wishes. It’s high time we make the government OUR tool like our founders intended. I think that we will almost certainly need a new political party for this, even if it were only to serve as a club with which to pummel the party duopoly into compliance with the needs and wishes of the American People. Other ideas also apply.

Before I finish, let me now try and answer the question I raised of why people who are not rich defend the wealth of the rich. Aside from a certain odd psychology that afflicts many Americans — namely the delusion of seeing themselves as merely temporarily embarrassed rich people who therefore want to keep the wealth of the rich safe since they expect to be rich themselves some day despite of living in a system that is carefully crafted to prevent anybody who isn’t born rich or well-connected (or utterly unscrupulous) from ever getting rich — there is the old problem of certain people being easily manipulated. Oh, yes, it’s so darn easy! (a lot of readers will think of Trump supporters at that point, and they are not all wrong)

As someone who has worked as a school teacher (among my many careers), I can assure you that there exists a very sizable portion of folks in our society (in any society, in fact), who fit descriptive terms like dumb, low-brows, knuckleheads, or uneducated — where the latter term is an odd mix of cause and effect.

Those people believe in authority. They take as absolute truth, coming from the horse’s mouth, anything said to them by people they deem to be in authority, people in thousand dollar suits, people bloviating on TV, people skilled at posturing and applying a smooth or – better yet – loud tone of voice that reeks of self-assurance. Posturing and appearance impress them far more than logical arguments or verifiable facts. They run on that old childhood instinct that proclaims that father knows best. In other words, they fall for a blatantly lying psychopathic con-artist who radiates self-confidence and status every time.

Naturally, the rich can easily buy the expensive suits and air time for both themselves and their unscrupulous operatives who work for them in politics and the mass media. Selling lies and brainwashing a large chunk of the public (which infects others and grows over time) is therefore real easy for them. To make any so convincingly delivered lie stick, it only has to be repeated on a daily basis, and the easily manipulated people I just described will believe that water is dry, grass is red, the rich are hard-working and generous, and the poor deserve poverty and lifelong serfdom, even if they themselves are the poor and never had a chance.

These folks are a sizable segment of the population we must live with. Living with them and nevertheless progressing forward either means that we must decisively outnumber them in a majoritarian democracy or educate them out of their cultivated boneheadedness. The latter will never work with all of them, but it is worth the attempt since even lifting up only a portion of them so they will join us turns us into the majority if we are not already there — or a larger and more healthy majority if we already are (which many polls suggest we are in the U.S. these days). To do this, we must overcome the brain washing from the corporate media and corporate politicians who have been showering us with falsehoods all our lives in their service to the money aristocracy.

This is why we need independent media and citizen journalism. This is why we should all inform ourselves in places like this here site and share what we find with our friends — and even those who are not yet our friends because they need to be educated out of their brainwashed misconceptions. This is why we need to make it our goal to all become well informed and eloquent in discussing our economy and politics. This is why I spend almost every spare minute, researching the issues, writing articles, and screening videos to share with you, like the one below:

(Note: if the video linked above gets deleted, you may search the Internet for the title: “The Estate Tax Explained Hilariously By Comedians”)

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Ending Note: It takes me at least 100 hours a month to research and write for this site. If you find any value in what I do, please consider becoming a patron and supporting this site with an automatic monthly donation of $1 or more. If you can’t afford this, then don’t, but please share my posts, tell folks about my online course offering, refer others to this site, refer me to paying outlets, partake in discussion, or contribute essays of your own. Thanks. Only together can we change the world. 🙂

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