FACTS ABOUT THE ESTATE TAX
The FAIRtax eliminates:
- Personal and corporate income taxes
- Social Security and Medicare tax deductions from payroll
- Estate and Gift taxes
From 1797 to 1802, an estate tax was enacted to help finance the Revolutionary War and pay the debts the young nation had incurred. The U.S. did not have another estate tax until the period from 1862 to 1870 when it was used to help finance the Civil War and pay off the debts incurred. The estate tax was put in again from 1898 to 1902 to help finance the Spanish-American War and the debts incurred.
In 1916, the estate tax became a permanent part of the federal tax system. In 1976, Congress reshaped the tax to include:
- A traditional estate tax
- A gift tax, and
- A generation-skipping transfer (GST) tax. (A tax on people who try to pass their assets on to grandchildren.)
Currently, there is an exemption from federal estate tax of $11.2 million for a single person and $22.4 million for a couple.
WHAT DOES THE ESTATE TAX PROVIDE TO THE TREASURY
While a few commentators have argued that estate and gift taxes are needed because of the revenue they create, the fact is that these taxes represent a very small percentage of the revenue flowing into the U.S. Treasury.
In a publication entitled Federal Receipts, published by the White House, the total revenue expected to be collected by the U.S. Treasury is $3.442 trillion for the 2019 fiscal year. The amount of estate and gift tax expected to be collected is $16.8 billion—less than ½ of one percent of the total revenues to the Treasury.
In an article entitled Death and a Thousand Paper Cuts: The Compliance Burden of the Estate Tax published by the National Taxpayers Union Foundation, Demian Brady, its Director of Research, concluded:
- The Office of Management and Budget calculated that Americans spend 2,099,259 hours trying to comply with the estate and gift tax.
- In Family Enterprise USA’s annual survey of family-run businesses, owners reported spending 13 percent of their time on average in 2016 planning for the estate tax and “incurred an average of $74,940 in insurance for estate taxes, [and] an average of $170,800 in other estate tax planning costs.
- Economic analysis of the death tax confirms that it weighs down job creation: the Tax Foundation estimated that repealing the estate tax would boost the economy by 0.9 percent.
- The estate tax also encourages firms to structure as corporations instead of as family businesses, because corporations do not pay estate taxes when the person at the helm changes … [t]his observation should be disconcerting to left-leaning voters, who recognize that smaller, family businesses have ties to their communities, but it should also concern right-leaning voters, who should see this as a distortion of the market process.
- Estate taxes stifle growth and development, as well as impact succession possibilities that could allow a business to successfully transition ownership from generation to generation and serve communities in perpetuity.
- Worse than the hassles of planning are the hassles of not planning. The late musician Prince is an example of this. He left behind an estate worth $300 million but no will, condemning much of his wealth that he must have wished would go to family to be swallowed up by taxes and lawyer fees instead. This is a warning for the estimated 31 percent of family businesses that have no estate plan.
In addition, in an article about the estate tax, CNN quoted the Tax Policy Center estimate that less than 4,000 estates will have to even file estate tax returns and only approximately 1,800 of the filers will end up owing any federal estate and gift tax.
CONCLUSION
The premise behind the FAIRtax is that the purpose of a tax system is to raise revenue for the government in the most efficient and least destructive manner possible. The purpose of the tax system or a tax should not be to forward social policies.
Society can determine that it wants to reward types of behavior, but it can more easily do this with a direct program. For example, if a society wants to encourage home ownership, then the legislature can provide incentives to home buyers in direct benefits.
Instead of doing this through the tax code, which raises the prices of homes for over 80% of home buyers, our Congressional representatives should just “man-up” and pass legislation for which they can be held directly accountable.
If you want to “punish” the heirs of people who have accumulated a lot of money, then that can be done by passing the FAIRtax and leaving in the estate tax. Then there is no pretense that the purpose is to raise money but is just to punish the heirs. You could even say that the money from the taxation will go to retire the national debt—of course it would also be a joke because the amount collected from the estate tax would not even pay a few days of interest on the debt.
What possible reason is there to keep a complicated tax that only benefits the “estate tax practitioner” groups and creates complications for most Americans?
Greater numbers of Americans are beginning to recognize that our country needs to eliminate a system of winners and losers determined by who pays the most money, not by what is right. These Americans will be ignored by the politicians at their peril.
The truth is the truth. Remember, if we don't continue to tell the truth and demand a change, then this quote from George Orwell's 1984 may foretell our children's future:
“If you want a picture of the future, imagine a boot stamping on a human face—forever.”
WHAT CAN EACH OF US DO
Call up the local or D.C. offices of your House Member and two Senators and you can use the following script:
- I am sure that Representative ____ or Senator ____ is in favor of everyone obeying the income tax laws.
- After they assure you that their boss is not in favor of anyone breaking the law, ask if they are aware of the Cebula study showing $9 trillion of evaded income/payroll taxes over the next ten years.
- Since most will say they don’t believe their boss has seen the study, either drop off a copy or get an email address and send a copy to them for their boss.
- Say you are going to call back in a week and ask what the Representative or Senator is going to do to stop this evasion.
- In a week, call back and ask specifically what the Representative or Senator is going to do to enforce the law.
- They probably will say their boss believes that simplifying the income tax will handle the problem.
- Explain that when people evade income taxes, they are also evading the 15.3% payroll/Medicare tax and state income tax. So it is unlikely that they are going to pay 30% or 40% when they were paying 0% because they have already decided it is okay to cheat.
- Say that the only way to reduce evasion is to increase by tens or hundreds of thousands the number of comprehensive IRS audits done each year.
- Point out that Evaders do not self-identify by putting an “E” on their income tax return.
- 80% of the people likely to be audited are trying to comply, but they will be forced to endure these IRS audits as well.
- Ask if the Member is in favor of this?
- If they say no, then ask again how the Member proposes to stop people breaking the income tax laws.
- Then explain that the way to handle evasion without unleashing the IRS audits is the FAIRtax.
If you can see your Member or attend a town hall and ask these questions, you can be even more effective.
FAIRTAX POWER RADIO
#130 PART 2 - PRESIDENTIAL CANDIDATE KERRY BOWERS
In this second part of our interview with Kerry Bowers, Air Force veteran, businessman, 2016 Presidential candidate and FAIRtax expert, The FAIRtax Guys hit on many topics surrounding the FAIRtax.
Listen as Kerry and The Guys discuss tax reform, the many problems with the current federal income tax, the overreaching and out of control IRS, the expectations of our founding fathers and framers of the Constitution, and a few other topics. In a “small world” moment, Bob and Kerry discovered that they are both from the same area of North Carolina.
True tax reform will affect many aspects of life in America because Congress has allowed the current income tax code to reach into every nook and cranny of our personal and business affairs.
Use FAIRtax Power Radio to educate yourself about true tax reform in our country and be sure to inform everyone you know about the new FAIRtax Power Radio - the ONLY weekly FAIRtax digital TV show in the country! Watch every Wednesday at 11:30 AM (ET). We are streaming to Facebook LIVE (www.facebook.com/fairtax). If you’re not a fan of Facebook, you can watch FAIRtax Power Radio on xcluded.tv at the same broadcast time - or any time.
FTPR podcasts for each show are posted on Spreaker (http://bit.ly/2oesbk7), iTunes & iHeart Radio every Friday morning. A free FAIRtax Power Radio app is available for iOS and Android. Since it’s a podcast, you can download it and play it whenever it’s convenient for you.
The Facebook videos are saved to a number of pages:
FAIRtax Official (https://www.facebook.com/FairTax/)
The FAIRtax Guys (https://www.facebook.com/thefairtaxguys/)
Democrats for FAIRtax (https://www.facebook.com/DemocratsForFairTax/)
and many others.
Xcluded.tv is a subscription based site which costs $30 per year and features a number of other shows along with FTPR with no commercial interruption.
Please help us educate as many Americans about the FAIRtax as possible. Be sure to tell everyone you know about this great new format for FAIRtax Power Radio. Whether you watch the weekly video or listen to the weekly podcast, this is a great way for more Americans to learn about the best tax reform plan in Congress at this time.
Tune into our video broadcast each Wednesday. Or, if you prefer, you can listen to the podcast of the show later. You can listen to FTPR on any platform - Mac or PC, iPhone or Android. And it’s 100% free. Listen on Spreaker.com (http://bit.ly/2oesbk7), iTunes (http://apple.co/1Te8VdF) or iHeart Radio (http://bit.ly/2eqEG7y) on your computer or smartphone. The easiest way to listen to FTPR on your smartphone is by downloading the free FTPR app. Just search for “FAIRtax Power Radio” in your app store, download the app and start listening.
Remember, FTPR digital TV every Wednesday at 11:30 AM (ET) followed by the podcast on Friday morning. Please listen and tell everyone you know about the FAIRtax Power Radio. The FAIRtax: Once You Understand It, You’ll Demand It!
AN EASY INTRODUCTION TO THE FAIRTAX - AMERICA’S BIG SOLUTION
America’s Big Solution is a basic introduction to the FAIRtax and is meant for people of any age. And you can download it to your tablet or smartphone right now. It’s also available in print form. See below.
Do you know someone who would like an introduction to the FAIRtax and would prefer to read about it in a booklet rather than search online for Tweets, Posts and Shares? If so, America’s Big Solution is their best choice.
America’s Big Solution is an introduction to the FAIRtax written by Terry Tibbetts, author of A Spartan Game: The Life and Loss of Don Holleder, with help from Ron Maiellaro, President of the Florida FAIRtax Educational Association.
You can buy an electronic version of ABS as follows: AMERICA’S BIG SOLUTION is available for only $2.99 for the Amazon Kindle (http://amzn.to/1WIRHry), the Barnes & Noble Nook (http://bit.ly/1XeG8bH) and Apple iOS (http://apple.co/1tnqK0P).
You can purchase a print copy at the same Amazon link above for $9.25. Regardless of whether you choose the electronic format or the print format, you’ll find AMERICA’S BIG SOLUTION will give someone the boost they need to begin their study of the FAIRtax and the suggested resources to learn more. Buy AMERICA’S BIG SOLUTION now!
LINKS TO MORE INFORMATION
These links will help you promote and support the FAIRtax, make yourself familiar with the links below. We always do our best to keep our AFFT community up to date, and you can stay ahead of the curve using these convenient sites.
- The website of Americans for Fair Taxation (www.fairtax.org)
- Read the Summary of the Evasion Study.
- Welcome to the Online FAIRtax Community (member.fairtax.org)
- The website at which you can help make it happen. (www.bigsolution.org)
- The Facebook page for Americans for Fair Taxation
- The Facebook page for The FAIRtax Guys
- The Twitter page for Americans for Fair Taxation
- PopVox - Connecting people and lawmakers for more effective participation and better governing
- YouTube channel for AFFT
- YouTube channel for The FAIRtax Guys
- The Official FAIRtax Logo Store (www.fairtaxlogostore.org)
- Xcluded.tv - A new platform for FAIRtax Power Radio Video and other shows.
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