Heirs of Texas Billionaire Reap Windfall from Lapse of Estate Tax

Thanks to obstructionist Republicans in Congress and their perpetual campaign to kill the estate tax, the United States Treasury stands to lose billions in revenue in 2010. And as the New York Times reported this week, a large chunk of it won't be coming from a single family. The heirs of Texas pipeline billionaire Dan L. Duncan "may become the first American billionaire allowed to pass his fortune to his children and grandchildren tax-free" and so become among the first beneficiaries of the GOP's new slogan for the wealthy, "die here, die now, pay less!"
The Times described how the supposed deficit-hawks Republican Party conspired to unleash a flow of red ink that could cost the federal government billions this year alone:
Had his life ended three months earlier, Mr. Duncan's riches - Forbes magazine estimated his worth at $9 billion, ranking him as the 74th wealthiest in the world - would have been subject to a federal tax of at least 45 percent. If he had lived past Jan. 1, 2011, the rate would be even higher - 55 percent.
Instead, because Congress allowed the tax to lapse for one year and gave all estates a free pass in 2010, Mr. Duncan's four children and four grandchildren stand to collect billions that in any other year would have gone to the Treasury.
In 2009, only 1 in 500 American estates paid taxes. But barring new legislation in Congress, in 2011 the estate tax rate will jump back up to its pre-2001 level of 55%, starting at $2 million per couple. In December, the House voted 225-200 to maintain 2009's rate of 45% beginning at $3.5 million per person or $7 million per couple. But as 2009, Jon Kyl led the successful GOP effort to block the bill, ensuring the temporary expiration of the estate tax on January 1st:
"It's a problem that doesn't have to exist if they'll just leave the existing law alone and let the rate go to zero, which is where everyone wants it to be."
Well, not everyone.
But as ThinkProgress documented, even as she faced a tough reelection battle, millionaire Arkansas Democrat Blanche Lincoln remained in Jon Kyl's corner fighting to reduce the estate rate to 35% beginning at $5 million per person:
Key Senate negotiators are making significant progress toward resolving the tangled legislative mess known as the estate tax. Notably, Finance Committee members Jon Kyl, R-Ariz., and Blanche Lincoln, D-Ark., are finding revenue-raising offsets within the estate tax code to cover the costs of the more generous rate and exemption they want...If they can use estate tax offsets to bridge the estimated $60 billion to $80 billion gap between their proposal and the House-passed bill (HR 4154), Kyl and Lincoln could shield themselves from some class-based arguments about tax fairness.
But thanks to the new "Pay-Go" budgeting rules every Senate Republican voted against in January, that $60 billion to $80 billion hole must be filled by spending cuts or other tax increases.
Under the 2009 rate, 99.8% of estates owe no estate tax at all. And as the Center on Budget and Policy Priorities (CBPP) showed, over 62% of estate tax revenue comes from the "extreme wealthy" with fortunes greater than $20 million. "Only three percent of taxes owed" are paid by estates under $5 million. But as the Washington Post explained in April 2009, those are precisely the pockets Lincoln and Kyl want to line:
The estate tax is scheduled to disappear in 2010, only to be resurrected the following year at its 2001 level, when it applied only to estates worth over $2 million per couple at a rate of 55 percent. In fact, no one expects it to return to that level -- although letting it do so would be a far more rational response to the current crisis than the Lincoln-Kyl approach. Rather, President Obama has proposed holding the tax at this year's level: an exemption of $7 million per couple, with a 45 percent rate for amounts beyond that; this would cost $484 billion over 10 years. Senate Finance Committee Chairman Max Baucus (D-Mont.) has endorsed this solution, with indexing for inflation. This would hardly be punitive. At that level, 99.76 percent of estates would incur no tax whatsoever. Those who owe would pay, on average, $2.25 million less than they would have paid at the 2001 exemption level. Why in the world should these folks get more of a tax cut?
The Republican scam over the so-called "death tax" is as bogus now as it was when President Bush first perpetrated it nine years ago. (The House GOP budget, fittingly unveiled by Rep. Paul Ryan on April Fool's Day 2009, would eliminate the estate tax altogether. CBPP estimated that ending the estate tax would cost the United States Treasury $1 trillion over 10 years.) While Nevada Senator John Ensign griped, "It destroys a lot of small businesses and a lot of family farms and ranches in America," House Minority Leader John Boehner (R-OH) groused:
"People who aren't wealthy, who may have built up value in land over generations and many family farms find themselves in situations where they've got to sell the farm in order the pay the taxes."
As it turns out, of course, not so much.
While CBPP estimated that only 1 in 500 estates is impacted by the current law, the Tax Policy Center quantified last year just how few family farms or small businesses are actually impacted by the estate tax proposals under consideration:
We estimate that under the Obama proposal, 100 family farms and businesses would owe tax. (We define such estates as those where farm or business assets are valued at under $5 million and comprise the majority of estate assets.) The Lincoln-Kyl proposal would cut the number to 40. Even under current law, fewer than 2,700 family farms and businesses would owe tax.
Last month, supposed centrist Republican Chuck Grassley (R-IA) signed onto the Kyl-Lincoln reverse Robin Hood plan. As it turns out, Grassley's worth is estimated at between $2.1 million and $5.2 million. So if Grassley succeeds in exempting himself from paying the estate tax, who will make up the shortfall for the U.S. Treasury? The answer is in your mirror.
And unless Congress acts soon, the heirs of billionaire big-game hunter Dan Duncan will have bagged the biggest prize of them all.
(This piece also appears at Perrspectives.)

Good thing we don't need the money.
We need to repeal the estate tax completely.
Only then can we all be free.
Vote GOP and move forward to the 18th Century.
...when we start taxing wealth instead of income.
Income and wealth are the property of the person that accumulated them. To take it from them is a crime.
Page 546 - Atlas Shrugged, paperback version.
Vote GOP and move forward to the 18th Century.
If people weren't so busy dry-humping Atlas Shrugged, the Fountainhead and every other 6th grade piece of trash Ayn Rand put out, we might actually get beyond our "me first, me only" attitudes. To make, you know, a functioning society ...
is trucking in satire today, hackenbush...
I know. I was agreeing with the point he was making -- that every retarded piece of reasoning to support this is backed up by Randian tripe.
I should have been clearer about that.
You'd be surprised how many rightwing dipshits think this is a good result. There are no shortage of people continually rooting for policies benefitting an economic class they have no chance in joining.
At least in the old days, the peasants who were bought and sold with the land got to keep some of the food they grew for their masters and a shack to live in.
The children of rebellious peasants who got kicked of the land did not survive to pass on the rebellious genes. That's why we have so many worshipers of power today.
I wonder if the .24% who pay a little tax are those who are just a little bit richer than the Bush family.
The US tax code is designed to benefit the very wealthy, with net worths of $100 million or more.
I wonder if they went to extraordinary measures to keep him alive this long? Would have been worth the investment..
On the other hand, I wonder if there will be any lapses in healthcare for sickly rich folks in danger of making it through to 2011? That has to put a little strain on the relationship with the grandkids!
earning more in interest and dividends than it cost to keep him alive.
I have no problem with people getting rich. Rich people support the arts, public TV and Radio, and a host of other things we'd all be the worse without...and I have no problem with them passing the wealth along to their kids. I DO have a problem with the freakin government stealing half of it because so many people are jealous and envious of rich people. (The next generation usually pisses it all away anyway)...The only people who are in favor of "taxing the rich" aren't rich themselves. You wanna get rich? WORK for it.
The way his kids worked for it?
"Someday somebody related to some of these sufferers, these victims, these collaterally damaged souls, may try to kill you. And I have to tell you, I think you’ll have it coming." - Christopher Cooper
you just contradicted yourself where you said "You wanna get rich" Work for it."
Those heirs worked for it how?
Working class republicans are the dumbest people alive. Other than that I'd just like to say your a moron. At least that shouldn't get me deleted.
If you think putting up with some rich old bastard until he croaks isn't work, it is YOU who are the moron.
Are you John McCain's valet?
Vote GOP and move forward to the 18th Century.
I'd like to delete my sarcastic answer to your "No Problem" post but edit is turned off.
You're good. You sound just like the people you are making fun of, but it's hard to recognize parody of the ridiculous.
L&P is cracking me up in this thread.
There's some quote about things being so absurd that they are indistinguishable from parodies about them which is quite apropos in this thread.
for his money. Shouldn't his kids get to keep it? How about all those crooks on Wall Street, they made an honest income right? Shouldn't there kids get to keep it? Or, how about that Jabba the Hut guy from Welpoint, he denied care to ill people undoubtedly causing hundreds of deaths yet retires with millions? His kids get to keep that too?
How about Cheney's kids who will reap millions in stock options from Haliburton's no bid contracts while Cheney lied us into war? Cheney's kids get to reap the benefit of blood soaked money?
F. Off.
The inheritance is new income to the heirs and should be taxed. Duncan's heirs did nothing to earn the billions of dollars he accrued besides being fortunate enough to be born into the right family.
It's extremely deceptive to keep referring to this as a 'death tax,' which implies that it's the deceased who pays it. Have you ever seen that show where Paris Hilton and her friend took jobs flipping burgers and such? They not only proved themselves unworthy of a better life style than the rest of us, they were too stoopud to have made it at all in the real world.
I thought the American Revolution was fought to get the people out from under the depredations of a privileged aristocracy. I guess I was wrong on that score.
"In theory theory and practice are alike. In practice they are very different."
I think I've seen one or two episodes and it's pretty much what you described. Luntz and the repugs were always good at framing issues to get people to vote against their own best interests but "death tax" really takes the cake. It took Hurricane Katrina for most Americans to see that repugs couldn't govern their way out of a paper bag. A lesson they already seem to be forgetting.
Those of us who aren't rich have always been fighting to make this country a more perfect union while the wealthy have always tried to consolidate power. Remember, only male land owners were allowed to vote. The struggle continues.
if i won a lot of money playing poker that money would be taxed because it is income and income is taxed.
the security this website has for registration is goofy.
I,m glad that you think those that are filthy rich, all came by it honestly. Probably paid all their taxes too. You gotta wake up sunshine.
I guess I pissed off a lot of jealous envious people...
Nobody said anything about honesty...I suppose you yourself are totally and completely honest all the time...HA!
There is no honesty. There are no morals.
Page 476 - Atlas Shrugged. paperback edition.
Vote GOP and move forward to the 18th Century.
http://www.bobonline.net/progxiansd/ssj/index...
that I do try to be honest and I may make honest mistakes. I have spent a lot of years in sales and never thought I had to lie to close the deal. I'm sorry if you think everyone has to be like you.
.
.
He's a satirist.
lotta that in this here thread!
The key to good satire is when ur audience can't tell the difference.
Vote GOP and move forward to the 18th Century.
My apologies.
No problem.
Hey...here's a hint...I'm a liberal, but don't tell anyone 'cause it's hunting season. ;o)
Vote GOP and move forward to the 18th Century.
paid all my taxed every job i've ever had. a lot of those were very low paying but it is only fair that we give what is appropriate for the person's income level.
why do mickey d employee's pay taxes and the cheney's don't?
the security this website has for registration is goofy.
I'm sure the billions were amassed absent any help from an educated work force, public infrastructure such as roads and utilities, and without any privileged access to politicians.
Surely, the filthy rich became filthy rich without any help from the commons, so surely there is no need to contribute a small share in exchange for such help.
I'd be happy being slightly dusty rich.
Vote GOP and move forward to the 18th Century.
Keep going. That's good.
A little bit of dishonesty never hurt anybody's profit. But jealousy, envy . . .
All rich people accumuluting their wealth honestly is another fairy tale the conservative kiddies tell themselves before they go to sleep. Another example would be the government needs to just let the free market work and get out of big business' way. We see right now how well lack of oversight on BP is working for Louisiana, Alabama Mississippi and Florida.
Where are all the jobs these rich people (they're smarter than the rest of us don'tcha know...their brilliance creates the wealth...and it trickles down) are supposed to be creating? I can't get rich unless they give me the means. Oh oh...I'm sorry...my individual talent is the only way for me to succeed...I see...cause there is no skin color, no bigotry to sexual orientation, language, cultural differences, gender, regional issues, economic cycles or bad weather.
Got it. Sorry, my bad. May the brilliance of Ayn Rand shine on me.
Vote GOP and move forward to the 18th Century.
That's called a "Golden Shower", and why we are called "Pee-ons".
Thanks, but no thanks -- I need an umbrella, a poncho, AND a hat!
"Those who make peaceful revolution impossible will make violent revolution inevitable."
-- John F. Kennedy
"work for it!" hahaha!
Bill Gates Sr and some other gazillionaires view estate taxes as a repayment of a 'special debt' owed the country that allowed them to become grossly rich
me-oww!
if that money went back directly to the people. By giving it to the Feds it gets spent on stuff like wars.
And if the government finances something, they get interest. If a private bank loans me $5,000.00 to start a restaurant and I turn that into Wendy's, when I die that bank can't say "we want 50% percent because we financed you back in the day." Not to mention the taxes paid as a result of having a successful business - the government is already taking a cut of the profits.
And people that rich losing half doesn't really mean that much. You still can't spend that much money in a lifetime unless you buy a country, or something. But I still don't think taxing that much (45-55%) is right.
I've seen some stuff, man. And some thangs...
We don't really have a system which does a very good job of giving any sort of real parity. Social Security and Medicare are really shallow representations of proper pension and socialized medicine systems to take care of the people who ... wait for it ... actually do the work.
All of these CEOs, niddle managers and accountants aren't worth spitting on without a class of grunts to actually produce something from all their management and paperwork. Yet we pay our working class orders of magnitude less than we should, as wealth disparity has been on the rise for years, approaching if not exceeding the horrific gap seen in the last Gilded Age.
From looting from the people who actually perform the work, they should have to pay into the shoddy healthcare and retirement system we have for the same workers who got underpaid to make them rich.
(It seems like the longer I live here the more I sound like a socialist.)
it's not the money that counts with the meritocracy. It's the game. How you going to get to be the world's richest person if your government taxes you more than the Saudi Royal Family has to pay.
Well, he certainly owes people like the Bush DOJ for not prosecuting his illegal operating system monopoly properly, so I'd say damn straight he owes the country some money.
I know what you mean, caprimike. You poor rich. Working so hard on the computer trying to find good stock investments and setting jealous and lazy liberals straight.
I have an idea for an investment! You ought to fund the campaigns of politicians who will lower your taxes some more instead of letting the lazy peasants have all the breaks.
Is it hard to find good help these days? It will get easier as unemployment grows.
Sounds like CapnCrunch earned *his* money the old fashioned way
He inherited it
Before enlightenment - chop wood, carry water. After enlightenment - chop wood, carry water.
Thanks “capnmike” for laying out the REAL REPUG agenda in black and white… Repugs are more concerned with making sure Paris Hilton inherits her fortune tax-free than providing leadership for a society that works for EVERYONE - not just the top 1 half of 1 percent.
What Repugs REALLY want is a form of Neo-Feudalism and this poor, Stockholm-Syndrome-suffering dupe, “capnmike” agrees… He believes America should be a country where 99% of the population lives or dies by the grace of their "betters" and the crumbs that fall from the table.
Repugs have actively worked to create a Plutonomy in America and have been quite successful. Isn't it amazing how the right-wing propaganda outlets have these bobble-heads agreeing that the wealthy should get a free ride off our backs?!
These selfish freaks have no concept of history, or reality.
Taxes are the price everyone SHOULD pay for using OUR commons.
Yet Republicans believe that the children of the wealthy should pay nothing to use our court systems to enforce their contracts, they should get a free ride when they use our fire departments, police departments and roads… they should just watch the interest in the enormous bank accounts balloon when they don’t get explosive diarrhea every time they eat or drink their inspected food… and on and on… they shouldn’t contribute a thin dime and label THEIR PATHOLOGICAL SELFISHNESS and GREED as “laziness” on society’s part?!
If we were still living in tribes we would have marched these parasites to the edge of the camp and sent them packing.
Taxes are the price we all pay for living in our society – if you don’t like the rules of the game then go set up shop in Somalia and stop whining about having to pay your fair share.
While you’re at it, take a history class… start with European history… you may learn something about the dangers of a landed gentry and generational aristocracy to a TRULY FREE populace… then move on to American History… I recommend learning about the Robber Barons, the Gilded Age and the FIRST Republican Great Depression and then the NEW DEAL that SAVED CAPITALISM from itself and CREATED the once-great American Middle Class. Then take a civics class… THEN… get help for your sad, sad, case of Stockholm Syndrome.
Another day, more http://RepublicanDirtyTricks.com
http://www.youtube.com/watch?v=EUTqW32gx9k
Diabolus est Deus Inversus
...shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, in order to assure the birth and the success of the Banana Republic."
http://www.youtube.com/watch?v=5EL8OBkWXV0
Diabolus est Deus Inversus
For more background on this and other related issues, see:
10 Inconvenient Truths for Tax Day:
1. Over 95% of Working Households Got Tax Cuts
2. Only 2% of Tea Baggers Know Obama Cut Their Taxes...
3. ...and 52% of Tea Partiers Think Their Taxes are Fair...
4. ...and Think the Federal Tax Level is Over Double What It Is
5. 1% of Families Earned 24% of All Income...
6. ...and 57% of All Capital Income
7. 400 Richest Taxpayers Saw Incomes Double, Tax Rates Halved
8. Only 1 in 500 Families Pay the Estate Tax
9. Corporate Taxes Have Plummeted as a Share of GDP
10. The U.S. Loses $345 Billion a Year to Tax Evasion and Fraud
You left out the fact that corporations are not taxed on income earned overseas....but poor working saps ARE.
Vote GOP and move forward to the 18th Century.
families leaves something other than debt to their children?
Your posts are very well researched and I've learned alot from them. Can you create one on the topic of causes of major US recessions in the past century?
Can the policies of the President lead to a recession or are they more heavily influenced by other events going on in the world?
In cases where policies adopted by the President have caused major recessions, what types of policies have exacerbated, mitigated or brought the country out of the particular recession?
Thanks
I am not opposed to some tax, but that just seems excessive. Especially if that applies to land, which in places like Austin, TX, is taxed like crazy already.
I've seen some stuff, man. And some thangs...
where this only applies to those with substantial amounts of wealth...
or that only 1 out of every 500 families ever has to pay any estate tax in the first place...
Just because something only applies to a small percentage doesn't make it right, neither does the excuse that "they can afford it."
I've seen some stuff, man. And some thangs...
for your sake, you will be happy in the dystopian future that you long for, and clearly believe is 'right'.
It's not always about being fair to one party. Much of the logic behind an inheritence tax is to prevent dynastic wealth from gaining control over the Republic. So yeah, 45-55% may sting (on paper only), but it's there to help prevent an oligarchy. And they didn't accumulate all that wealth in a vacuum. How about paying it forward for once?
The estate tax is simply one of the foundations of free, small "d" democratic societies.
Most Western democracies have turned to the estate tax as one of the essential safeguards to prevent the rise of new aristocracies of dynastic, multi-generational wealth.
Like the progressive income tax itself, the estate tax is in keeping with the simple maxim that those whose disprortionately benefit in our unique system of American capitalism should disproportionately maintain it. (That's also why the capital gains rate was traditionally higher, recognizing the fundamental unfairness of working people higher taxes on the fruits of their labor than the wealthy did for clipping coupons. With its cries of "double-taxation," conservatives have been very successful in eliminating that long-held principle.)
FDR put it well:
When he endorsed the idea of a tax on inheritance back in 1906, Theodore Roosevelt said that its "primary objective should be to put a constantly increasing burden on the inheritance of those swollen fortunes, which it is certainly of no benefit to this country to perpetuate." Andrew Carnegie agreed, believing unfettered inheritance of huge fortunes makes people idle and profligate. In the early part of the twentieth century, when the nation's images of wealth came from Rockefellers and railroad barons, the general public also tended to agree. They didn't like the idea of an economic aristocracy perpetuating itself generation after generation in a country founded on the idea of equal opportunity for all.
http://press.princeton.edu/chapters/s7919.html
I am perfectly willing to scrap the inheritance tax, with the proviso that we treat all income, including capital gains and inheritances, the same and raise the top marginal rate on income over $2 million to 90%.
Damn straight, that makes sense. Tax the fuck out of the parasite investor class.
in booshs tax cuts. like gitmo, iraq etc... the dems could've closed the loophole.
http://www.konowitzkahn.com/2010EstateTaxupda...
http://abcnews.go.com/Health/HealthCare/lack-...
about this recently. Seems the wealthy heirs wanted their rich parents out of the way "just in time" to reap this benefit.
Someone oughta look into that in this case, too ;).
The global shift of taxation off wealth and property and onto labor, industry, and commerce is why the estate tax is such an issue. If wealth were taxed as it should be, there would be no need for an estate tax.
I have personal experience with estate tax, having had to liquidate a family business and the property the business was located on to pay the damned inheritance tax. (In Spain).
I am a strong believer in progressive taxation, but I am completely against inheritance taxes. The taxes should be collected along the way, not as a balloon payment that forces liquidation of assets to meet.
I am sorry about your experience and do think that some provisions should be made to allow the transfer of family businesses and farms without liquidation (one way is to make the transfer, at least partially, prior to death). The point remains, however, that for the heirs, the inheritance is unearned income and should be taxed as such. The value to them has never been taxed.
much of it has never been taxed. Any increase in value in investments such as stock or real estate has not been taxed. With a value of 9 Billion and no taxes let's see hw much is left to Non-Profits.
They have to die this year. I really hope a lot of em go ahead and cheat the taxman. I hope it's a bloodbath.
http://www.youtube.com/watch?v=zQOV_saKk54
n/t
"Those who make peaceful revolution impossible will make violent revolution inevitable."
-- John F. Kennedy
ways to pay the tax with proper planning in advance. Many charities and non-profits can reap the benefits as well.
"Your lips move but I can't hear what you're saying..."-------Roger Waters, "Comfortably Numb"
Thanks again to the spineless Dims, we the folks get screwed again.
That's why wealth should be taxed along the way. Spain and Italy have a tax on wealth, originally designed to force people to declare their assets. If undeclared assets were uncovered by the tax authority, they would treat them as short term capital gains, and tax them at that rate. It's a good idea that the whole world should adopt.
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