Thursday, July 15, 2010

Memo to old rich people...

If you're going to die, get on with it or else.

Else: the death tax after a one-year hiatus kicks in Jan. 1, 2011 at 55%.

Linked article talks about how the Steinbrenner family likely avoided having to sell the New York Yankees because of the timing of George Steinbrenner's death who passed away just a couple of days ago. Had The Boss the good fortune of living past this year, his family would've been stuck with trying to come up with $500 million based on the value of the Yankee franchise. (ed.: We believe Steinbrenner's wife is still alive so we're not sure if this even applies but play along any way for the larger point)

And here's how the author describes the situation:

Only two percent of the population, or about 64,000 estates, makes enough to be subject to the tax, according to the Center on Budget and Policy Priorities. The repeal of the tax is sapping about $55 billion in revenue from the federal government. This year, about 4,500 families with very large estates will be receiving as much in annual tax reductions as 140 million taxpayers, according to the Washington-based nonprofit.

(italics, ours)

Charmed, we're sure. Commenters nearly unanimously take the author to task for her choice of wording, as if the Steinbrenners are somehow cheating the government out of what is rightly theirs.

But back to the estate tax. The estate tax is amoral, plain and simple. We are 99.99% sure we will never have to worry about it, but we absolutely hate it just the same. This death tax is a levy against money that has been taxed once already but the part that cheeses us off the most is the fact that there is not any financial transaction involved. The Steinbrenners did not sell the team whereby they could be taxed on the sale of the franchise. Instead, they would've been taxed on the assessed value of the franchise. In a perverse sense, then, the Steinbrenners would've been forced to sell the franchise anyway just to cover the feds cut of the assumed value of the franchise. The Steinbrenners would've lost the franchise, of which they have had at least minority ownership in for 37 years, simply because George passed away at date beyond December 31st, 2010. How is that just? How is that fair?

We do have some personal animosity towards this death tax speaking as life-long Los Angeles Dodgers fans. It was because of this god-forsaken death tax that forced the sale of the Dodgers back in 1997 when Peter O'Malley passed away. The O'Malleys had owned the Dodgers for decades going back to their days in Brooklyn in the 1950s and had created one of the most stable and successful sports franchises in America. Since that time there have been two different owners and success on the field that could only be described as mixed (and it looks like with the divorce of the current owners, Frank and Jamie McCourt, we're headed for owner #3 since the O'Malleys).

So, yeah, with us this death tax is rather personal but it should be hated and struggled against with passion on principle alone.


Harrison said...

Had Steinbrenner died next year his family would have been forced to sell the Yankees to pay their tax bill. How is that fair?

Harrison said...

Will be linking for Sat. Great post I was going to write something like this but you said it better.