Death Taxes: There May Be Only One Axiom Left

By Ed Raymond
Staff Writer

Legend has it that there are only two axioms permanent in life: death and taxes. But now, through the miracle and alchemy of modern politics, only one may be left to the rich. Death.

According to a report in the New York Times, Dan Duncan, a Houston oil and natural gas pipeline billionaire, was the first billionaire of the modern era to pass on his considerable fortune to his children and grandchildren totally tax-free. The patron saint of all billionaires decided in March 2010 that the 74th wealthiest person in the world at the age of 77 should ascend to the McMansions and paved golden streets of Heaven due to a brain hemorrhage.

It came to pass that Mr. Duncan died at the right time, within the time frame established by the best Congress money can buy. Lurch of Crawford passed his trillion-dollar tax cuts for the rich in 2001, thus destroying the budget surplus of several hundred billion dollars so carefully nurtured by Slick Willie Clinton. Lurch’s Enron accounting cronies with beautiful minds came up with a fascinating shell game. If we gradually reduce the death (estate) tax to 45 percent by 2010–then restore it to the 2000 tax level in 2011-we can get Congress to pass this bunch of crap.

Do We Pull the Plug Or Warm Up the Respirator?

When Duncan kicked his last savings deposit box, Forbes magazine estimated his worth at a cool $9 billion. But the fact that he died during the wonderful Ides of March 2010 allowed his four children and four grandchildren to collect the billions from his estate tax-free! If he had died at 11:59 p.m. Mountain Time on December 31, 2009, Mr. Duncan would have paid a 45 percent tax on his $9 billion estate. Now that’s real money! But if he had been placed on life support and his family had not pulled his plug until 12:01 a.m. on January 1, 2011, the estate tax would have been at its pre-2001 level of 55 percent!

The fact that he died during the no-tax phase of Bush economics for the rich and talented has aroused a great deal of interest among rich families. Heaven forbid these calculating deadly financial thoughts. Gee Whiz! If Sugar Daddy dies between now and the very end of 2010 we might get his assets tax-free. But if he is sick on December 31, 2010, shall we make sure he has a before-midnight rendezvous with his deceased country club friends? I would think this tax gap in the law might create a whole new army of financial consultants using Dr. Faustus and the Grim Reaper as a reference.

Just What Does Quality Of Life Mean? Should We Pay For It?

The Human Development Index published each year by the United Nations determines the Quality of Life ranking of developed nations, using the criteria of life expectancy, adult literacy, school enrollment, educational attainment, and adjusted real income. The top ten: Iceland, Norway, Australia, Canada, Ireland, Sweden, Switzerland, Japan, Netherlands, France.

Why didn’t we crack the top ten? Life expectancy depends on the quality of health care. Is that enough said? We rank 33rd in the world in that category. In the area of school enrollment and attainment, every other industrialized country is increasing higher education enrollment and attainment while our college enrollment is falling. Annual tuition increases are such a burden for families in the United States that enrollment is declining while many graduates have loans of up to $100,000 to pay off. We were once the leading nation in the ratio of science and engineering grads to college-age population, but since states have been slashing higher ed money for a decade, we are now near the bottom for industrialized countries.

We lead the world in weapon sales and have more prisoners per capita than any other country. I guess the UN doesn’t use those two Quality of Life indicators.

Why Do We Lead the World in Child Abuse Fatalities?

Perhaps we could learn something from Sweden, but our current Tea Party attitudes are not encouraging. Swedish parents have 13 months of paid leave, two of which are reserved for the father. Both parents are guaranteed a job on their return to work. The Swedes have figured out that family-friendly policies are good for business - and that fewer divorces and higher earnings for women are good for families. For some reason we haven’t figured that out yet.

Why does the United States lead the world’s richest democracies in child abuse fatalities, with death rates three times those of Canada and eleven times greater that Italy’s? Could it be we just don’t give a damn about the health and education of families?

What is United States Chamber of Commerce CEO Thomas Donahue really concerned about? He’s concerned about how Congress is treating business leaders after the Wall Street casino, the banking frauds, and the little oil spill in the Gulf of Mexico: “I am personally troubled about the way we have been treating not only our business leaders but – let’s go there – bankers, people that run health insurance companies [the little angels!], people that run oil companies [angels without wings!] They are being hauled up to the Congress–and beat up like unruly children for the TV cameras..This is a mistake for our country because it demeans us around the world.” You mean these wonderful beautiful minds don’t deserve “demeaning” because they screwed up the whole world?

The Lowest Rate Since Harry Truman Was President

With all the screaming about high tax rates coming from Tea Partyites, Pawlentyites, Club for Growthites, and Congressional Republicans, one would think we pay more taxes now than any other country on earth. Actually, according to a study by USA Today, last year we paid our lowest level of tax since Harry Truman was president in 1950. European countries pay an average rate of about 45 percent while U.S. taxpayers pay about 27 percent. In 2009 we paid only 9.2 percent of our personal income toward federal, state, and local taxes. The average tax rate for the last 50 years is 12 percent. Economist Michael Ettlinger of the Center for American Progress says, “The idea that taxes are high right now is pretty much nuts.”

In the last three years, the tax rate for both rich and poor has declined 26 percent. While personal income fell only two percent in 2009, the amount of tax paid dropped 23 percent. A Gallup Poll in June indicated that 48 percent of people thought taxes were too high and 45 percent said taxes were about right. From the time spent interviewing yelling Tea Party members and “no-new -taxes” guys and gals on national TV, one would think 90 percent thought taxes were too high.

Not only is there a big hue and cry about high personal taxes, but the Chambers of Commerce, the Business Roundtable, the Club for “Greed,” and other business organizations are constantly claiming that corporate tax rates are too high. It is true that we have the second highest corporate tax rate in the world. The best-kept secret of corporations is that only one third pay any income tax at all!

What Would Happen If Our Corporations Actually Paid Taxes?

Corporate accountants and financial officers are kept very busy transferring income and hidden assets to overseas tax havens. Tax havens shelter revenue from countries around the world, but a majority of the corporations seeking shelters are from the U.S.

The Cayman Islands, a couple of dots in the Caribbean, has 500 banks and 7,100 mutual and hedge funds. It’s miraculous the islands don’t sink under the weight of the banks. The British Virgin Islands, a territory owned by the outfit that made “taxation without representation” relevant to us, has over 500,000 registered offshore corporations. Belize, that little tourist haven next to Mexico, is also a tax haven with eight banks, an insurance company, 23 trust companies, and 38,741 registered offshore companies. Not only did we give the Panama Canal back to its owners, we do a lot of business with 34 offshore banks and 350,000 offshore companies registered there.

At last count there are over 28 million businesses in the U.S., most of them incorporated. However, not all of our corporations are participating in the outright fraud of tax havens. Not the little ones. They haven’t bought a Congressman yet. But the IRS estimates that big corporations are screwing the American people to the tune of about $100 billion a year. Ye Gads! We could fight in Afghanistan for 100 years with that money!

An interesting little detail for us suckers. The large corporations who have purchased many congressmen have made sure they don’t suffer from punitive damages. (I have to use “who” since the Roberts Supreme Court determined that corporations are “people.”) As an example, if BP loses 35 billion dollars in punitive damages over the gusher-spill in the Gulf of Mexico, they can deduct the entire amount paid in punitive damages from their federal income taxes. Three guesses who really pays it.

Is Europe Really the Ultimate Nightmare for Taxpayers?

Sure, Europeans pay a higher rate of tax than we do. But look what they get for their money. While Americans pay $7,300 per capita for health care in 2010 out of their own pockets, most Europeans get their health care paid for through taxes. In many countries they don’t even get a bill. As an administrator for a sister-in-law who died of cancer, I still remember the horror of trying to make sense of a 57-page hospital bill from a Miami hospital.

It will cost American students about $100,000 to graduate from a state university or about $200,000 from a private college that provides an engraved diploma. In most European countries, university educations are paid for by the state. As an example, France pays for the entire medical education of a doctor, even if he is a specialist. And according to the World Health Organization, France has the best health care system in the world. (It must be. Frenchmen live three more years than we do.)

Excellent child and geezer care and state-of-the-art mass transportation are all provided without additional charges. As financial expert Steven Hill puts it: “When you include out-of-pocket expenses for essential services, Americans pay out just as much as Europeans – but receive a lot less for our money.”

Reagan’s Trickle-Down Dries Up

Arizona, controlled by anti-government people hung up on Ronald Reagan’s trickle-down theory of taxation, has been trying the tax-cut route to economic growth for 17 years. State taxation rates have declined for 15 years. The rich can deduct their country club dues and their pedicures.

An Arizona State University study concluded that all of these cuts had no “perceptible” effect on growth. In fact Arizona has closed all rest stops, state parks, practically all child and adult recreation programs, dropped kindergarten funding, and starved the universities in an attempt to balance the state budget.

One Arizona cynic described the anti-tax crowd this way: “People who have swimming pools don’t need state parks. If you buy your books at Borders you don’t need libraries. If your kids are in private school you don’t need K-12. The people here, at least those who vote, don’t see the need for government.”

The gap between the rich and the poor is the widest since the 1920s. Perhaps death is the only axiom left.

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