Today's Note From a Madman and a Brand New Madwoman


Monday, December 27, 2004


More on Language

by Marcella DeSimone


Conservatives have made a concerted effort to manipulate language in such a way that it makes policy they dislike seem inherently bad and policy they're behind in the best interests of the American public.


The first time you hear a clearly ridiculous phrase, it sounds just that - clearly ridiculous. Once the speaker takes it seriously enough to keep repeating it, people tend to think it sounds less and less ridiculous. Then they start to think it makes sense and eventually forget completely what the phrase actually means, especially if they're not engaged in a dialogue with anyone about it.


So, I thought I'd write a translation column so that we can keep this disingenuous behavior on our minds. First up, "death tax," once referred to as the estate tax.


According to Cornell University Law School, New York, the taxation of property held by a person at the time of their death is one of the oldest and most common forms of taxation. Such a tax can take the form, among others, of estate tax (a tax levied on the estate before any transfers).


"An estate tax is a charge upon the decedent's entire estate, regardless of how it is disbursed. An alternative form of death tax is an inheritance tax (a tax levied on individuals receiving property from the estate)," according to Cornell. "Taxes imposed upon death provide incentive to transfer assets before death.

"Gift tax laws are generally designed to prevent complete tax avoidance by this route. The Federal Estate Tax is integrated with the Federal Gift tax so that large estates cannot be shielded from taxation by lifetime giving. Many states also impose an estate tax. Generally, the Gift Tax applies to any transfer made without receiving value in return and without regard to intent."


What's the point of a tax that seems on its surface to penalize the wealthy? Because when people in this country become extremely wealthy, they usually do it standing on the shoulders of publicly funded entities, such as state schools, the Internet, government grants and so on. The estate tax is meant to allow the rest of society to benefit from the wealth it helped create, and also to keep the wealth of the nation (and consequently the political power) from being concentrated in the hands of a select few.


Politicians who want a permenant repeal of the estate tax are basically suggesting that once a person benefits disproportionately from the system, they should be able to keep the money entirely to themselves, rather than sharing the wealth with the rest of the taxpaying society, without whom they would not have become rich.


This "death tax" is being phased out through the pleasantly named Economic Growth and Tax Relief Reconciliation Act of 2001. The law requires that the federal estate tax be phased out in 2010 for one year. Then, the estate tax will return as it existed before the 2001 bill was enacted because of a sunset provision in that legislation.


How did conservatives get such a bill passed? By paying for a study that basically says that when rich people can't horde the wealth this society helped them create, they're forced to do bad things to keep the money. According to the 1998 House Joint Committee Study "The Economics of the Estate Tax," the estate tax obstructs environmental conservation. The need to pay large estate tax bills often forces families to develop environmentally sensitive land.


The study also says that the existence of the estate tax this century has reduced the stock of capital in the economy by approximately $497 billion, or 3.2 percent, and: 


The distortionary incentives in the estate tax result in the inefficient allocation of resources, discouraging saving and investment and lowering the after-tax return on investments.

The estate tax is extremely punitive, with marginal tax rates ranging from 37 percent to nearly 80 percent in some instances.

The estate tax is a leading cause of dissolution for thousands of family-run businesses. Estate tax planning further diverts resources available for investment and employment.



A Conspiracy Theory? Yeah, Why Not?

By Noah Greenberg


Ten years ago, as a small business owner in New York City, I decided to get health insurance for all of my employees (there were 5 employees and 3 partners) My partners and I went with HIP (Health Insurance Plan of New York, with locations in New Jersey) for the employees and the Oxford Freedem Plan for us (the 3 partners). During our best year, we invoiced almost $2 million. As the years went by, we were hit with increases of 10%, 20% and finally a 33% Oxford increase. With our industry doing more and more business abroad, we either had to cut back or perish. We laid 2 workers off. We put everyone on the same insurance plan. We laid another worker off. Finally I, myself, left the business. Being the only married partner, and with another direction to go (I'm a Network Engineer), the business had a problem paying for my health insurance, a whopping $1094 per month.


I drive approximately 32,000 miles each year, mostly in regard to my job. My auto insurance in New Jersey for 2 cars is approximatey $2,000 per year. My wife, who drives less than 10 miles to work 5 days a week, and I have no traffic violations or accidents in at least 7 years. Even with promises of lower insurance rates, somehow my rates seem to go up every year. This June, my daughter will turn 17 years old. I wonder what my rate will be?


Almost every week I receive a letter from a doctor stating that they have an overdue bill in regards to either me, my wife, or one of my two children. I spend, on average one hour each of these bills 2 or 3 times a week and sometimes feel it might be easier to just pay the bill, which I'm sure would be beneficial to everyone, except myself. At the end of the day, the doctor's office blames the insurance company; the insurance company blames the doctor's office; they both, more than likely, blame me; and I end up having to do this insurance dance about multiple times a week.


Who's making the most money?


Who never goes out of business?


Who can afford to sponsor golf tournaments and tennis tournaments?


They raise medical malpractice premiums of good doctors when the stock market goes down and don't decrease them when the market goes up.


I want a rebate.


Stupid Quote of the Day


"This is an historic moment for democracy in Ukraine,"

- Secretary of State Colin Powell, at a State Department news conference referring to the election of Viktor Yushchenko as the new Prime Minister of the Ukraine after an unfair election was overturned. The election was overturned due, mostly, to the outcome of exit polls that showed Yushchenko the winner, but gave the vote to Viktor Yanukovych, Russian President Vladimir Putin's choice.


When do we get such an historic moment in the U.S.?


When is this guy going to stop dropping the ball? OH NO! Condoleezza Rice is picking it up!


-Noah Greenberg


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-Noah Greenberg