Editore"s Note
Tilting at Windmills

Email Newsletter icon, E-mail Newsletter icon, Email List icon, E-mail List icon Sign up for Free News & Updates

June 9, 2006

FRIST'S FARM FAMILY....Since the estate tax debate began in earnest, congressional Republicans have highlighted what they see as the tragic consequences of the estate tax. As a rule, they point to hypothetical horror stories, but are usually a little short on actual examples.

Senate Majority Leader Bill Frist (R-Tenn.), however, claims to have found a real-life incident about a family in his home state. This is from an email Frist sent to his supporters on Wednesday:

"I am reminded of a case in Williamson County, TN. I know of a family there that inherited from their dad the 167 acre farm that they grew up working on. The kids considered keeping the farm ... until they got the 'inheritance tax' bill, which typically runs 40 to 50% of the current market value of a property in excess of $1 million.

"The children needed to come up with hundreds of thousands of dollars within mere months of their dad's death. Like so many other families who inherit the family farm, they simply couldn't do that without selling the land."

Something doesn't quite add up. First, Frist is just wrong about the amount at which the estate tax kicks in. The senator's email mentions "property in excess of $1 million," but as MarketWatch's Marshall Loeb explained this week, the portion of an estate that is automatically exempt from any federal taxation is $2 million (or $4 million per couple).

Second, Frist said grieving kids had "mere months" to pay "hundreds of thousands of dollars" to the government. At a minimum, this is misleading. The law says the estate tax is not due until at least nine months after a person dies, and in some cases, heirs get years.

Third, when Frist noted that the estate tax "runs 40 to 50%" of an estate worth more than $1 million, he's not only wrong about the dollar amount, he's also wrong about how the tax is applied -- it affects an estate's value over and above $2 million, not the whole thing.

And, finally, as Crooked Timber's Ted Barlow told me, it's rather disingenuous for Frist to claim that the tax hits "so many other families," considering how much trouble Republicans have had finding real people who have had to sell their family farm because of the tax.

So, in the end, Frist appears to be have been wrong about ... nearly everything. Here's a final thought: why would the Senate Majority Leader and likely presidential candidate put all of these errors in writing?

Steve Benen 9:15 PM Permalink | Trackbacks | Comments (96)

Bookmark and Share
 
Comments

Why didn't he name names? Or is this a metaphorical case like the Welfare Queen in her limo?

Posted by: gq on June 9, 2006 at 9:18 PM | PERMALINK

IOKIYAR

Posted by: Wilson46201 on June 9, 2006 at 9:19 PM | PERMALINK

Williamson County is, BTW, a prosperous suburb of Nashville. My guess is that the kids "considered keeping the farm" at most until the first phone call from a developer.

Posted by: Bernard Yomtov on June 9, 2006 at 9:19 PM | PERMALINK

On the other hand, why is someone so ignorant of the law Senate majority leader? No wonder our government can't seem to do anything right.

Posted by: gq on June 9, 2006 at 9:20 PM | PERMALINK

He was probably viewing the case via video tape, he has lots of experience with that.

Posted by: Tigershark on June 9, 2006 at 9:20 PM | PERMALINK

He feels safe putting all that in writing because most journalists are liberal arts types that are deeply uncomfortable with numbers and arithmetic, and they'll happily let such things slide.

Posted by: Joe Buck on June 9, 2006 at 9:21 PM | PERMALINK

Yep, Frist's argument was bogus. I'd just as soon see the inheritance tax reduced from the 55% level, but that doestn't justify playing fast and loose with the facts.

Posted by: ex-liberal on June 9, 2006 at 9:24 PM | PERMALINK

I go over to the Goalpost blog that Zachary pointed out earlier today then, lo and behold, guess who is on the Lehrer newshour tonight? Yup Franklin Foer himself. Cant say I have ever seen a photo of him before...but I do have two things to say about his appearance.

1)He reminds me of the lead singer from Bare Naked Ladies.
2)WTF is up with the jacket and open top buttons on his shirt? I have no desire to see his chest carpet.

Posted by: zAmboni on June 9, 2006 at 9:24 PM | PERMALINK

The original owner could have transfered ownership of the property to his children prior to his death and paid zero taxes. The cost basis for determining capital gains upon it's sale would have become the original owner or father's purchase price, however. So, to some extent, these people would pay estate taxes only if they were complete morons incapable of communicating with a competent accountant. Capital gains, yes-estate taxes, no.

Posted by: Where's osama on June 9, 2006 at 9:28 PM | PERMALINK

So if it were a $3M farm the kids would owe $500,000. Ok, kind of steep, but you've just inherited a $3M farm. Are the kids stupid? Do they all have credit ratings of miserable? You go to a bank, borrow the $500k, pay the taxes and then you need to generate $3,000 a month to cover the mortgage.

Posted by: MSR on June 9, 2006 at 9:35 PM | PERMALINK

Where's osama gives the best argument against the estate tax -- it turns dying into a contest of lawyers and accountants. Those with slick advisors escape the tax. Those who merely follow the law get screwed.

Posted by: ex-liberal on June 9, 2006 at 9:35 PM | PERMALINK

To get the exemption of "$4 million per couple" actually requres estate planning. Lets say the husband and wife are worth $5miillion and the wife dies first, husband would inherit her estate and $2million exemption would apply. He pays taxes on $0.5 million and is now worth ~$4.75 million. When he dies, the children would pay taxes on 4.75-2=$2.75million with an effective exemption of $2.25 million. To fully use each couple's exemption needs fair amount of estate planning.

Posted by: vj on June 9, 2006 at 9:37 PM | PERMALINK

Incorrecto, ex-thinking person. What it shows is that even the most dim-witted conservative can fiqure out a way to transfer property without incurring any estate taxes. Anyone with a million or up to 4 million dollar estate can quickly determine the best way to go with a couple hundred bucks and a lawyer or accountant. Anyone that refuses competent professional help with their money probably deserves to lose it anyway. In the long run if they are that out to lunck Frist will get it.

Posted by: Where's osama on June 9, 2006 at 9:41 PM | PERMALINK

Could it be that Frist's target audience can't read?

Posted by: craigie on June 9, 2006 at 9:45 PM | PERMALINK

I bet the GOP would be happy to tax the estate if the kids were fags. Because they might get their gay cooties on the food they grow.

Actually, this whole story is stupid, because everyone knows that there is only one farm in the US, and it's owned by ConAgra.

Posted by: craigie on June 9, 2006 at 9:49 PM | PERMALINK

Why did he put it in writing? Why not? Who the fuck cares?

In today's politics, Republicans routinely lie with impunity. Why shouldn't Frist? You don't think a Democrat or a journalist is going to challenge him on it, do you? The Democrat will be too afraid of his donors and the journalist just sees it as his job to write down whatever they say.

Posted by: The Fool on June 9, 2006 at 9:59 PM | PERMALINK

"why would the Senate Majority Leader and likely presidential candidate put all of these errors in writing?"

Well he's a Republican and a Bush supporter--maybe he's trying to look presidential?

Posted by: rea on June 9, 2006 at 10:02 PM | PERMALINK

As a resident of Williamson County, Tennessee, let me elaborate on the comment above. Williamson County is, by far, the most affluent county in the state. In published rankings last year, Williamson County was listed as the 12th highest per capita income county IN THE WHOLE COUNTRY (i.e., out of 3,000+ counties).

There is nothing "common" about Williamson County. Nearly all of the "farms" we have are "gentleman's farms." That is, affluent families with lots of land stick a few horses or cows out in the field in order to qualify for the lower "agricultural" property tax rate. There are almost no actual working farms here.

Nissian is moving it's national headquarters here from California-- maybe a "car farm."

Posted by: WmCounty on June 9, 2006 at 10:04 PM | PERMALINK

With this week's fiascos First has cemented his position as the next President of the United States.

Perfect.

Posted by: nut on June 9, 2006 at 10:07 PM | PERMALINK

Why? Because he's really that stupid.

Posted by: bebimbob on June 9, 2006 at 10:15 PM | PERMALINK

According to the IRS, only one in 25 farmers leaves any taxable estate whatsoever. The inheritors of such estates pay very little. In 1999, the median estate tax paid by farmers was $5,000 (yes, five thousand).

Neil Harl, an Iowa State University economist whose tax advice has made him a household name among Midwest farmers, said that he had searched far and wide but had never found a farm lost because of estate taxes. "It's a myth", he said. Even one of the leading advocates for repeal of estate taxes, the (Republican supporting) 'American Farm Bureau Federation', said it could not cite a single example of a farm lost because of estate taxes.

Just another RightWing SCAM.
.

Posted by: VJ on June 9, 2006 at 10:22 PM | PERMALINK

Here's a final thought: why would the Senate Majority Leader and likely presidential candidate put all of these errors in writing?

Because the only people who will listen to him are the dumbest fucks in America. How many of them are going to call him on his dishonesty?

Posted by: jcricket on June 9, 2006 at 10:24 PM | PERMALINK

Those with slick advisors escape the tax. Those who merely follow the law get screwed.

It's not illegal to hire an lawyer or an accountant, dipshit. There's nothing particularly slick about routine estate planning.

Posted by: Vladi G on June 9, 2006 at 10:29 PM | PERMALINK

My point exactly Vladi. May I have your baby...

Posted by: Where's osama on June 9, 2006 at 10:31 PM | PERMALINK

Someone might want to spend a couple of dollars and take a look at the first article listed here from the archives of The Tennesseean, a piece called "Plenty of farmland, few true farmers". The description seems to fit Frist's scenario:

"Inheritance tax often puts farms on the market By MARILEE SPANJIAN. For Williamson A.M.. Just past Page High School is a little white farmhouse set close to Arno Road. Behind it, freshly cut pastures stretch to a lazy river traced by an old tree line.. John "Bubba" Ham knows the land all too well, as he grew up there with his sister and brother, who now is deceased. The 167-acre farm is where he and his siblings helped his father and mother sow crops and raise"

Posted by: Ed Fitzgerald (unfutz) on June 9, 2006 at 10:37 PM | PERMALINK

9:41 Incorrecto, ex-thinking person. What it shows is that even the most dim-witted conservative can fiqure out a way to transfer property without incurring any estate taxes.

But then why bother to have an estate tax in the Frist place??

Posted by: pencarrow on June 9, 2006 at 10:39 PM | PERMALINK

Can you say "apocryphal"?

Until he gives us the name of this poor family, I am certainly doubtful.

Clearly, they have been too traumatized by their screwing at the hands of the Federal Government to tell their story on the Today Show, and Good Morning America, and Hardball, and Lou Dobbs, and Scarborough, and 20/20 and Rush and O'Reilly and...

Posted by: Robert Earle on June 9, 2006 at 10:45 PM | PERMALINK

Lawyers and accountants are from the dark side if you are right winger, I guess. As well as any "professional" help. Doctors may not be considered to be trustworthy, also. Of course, teachers are totally fu.............

Posted by: Where's osama on June 9, 2006 at 10:48 PM | PERMALINK

Steve: "why would the Senate Majority Leader and likely presidential candidate put all of these errors in writing?"

Because he can do it and get away with it. He, like all other Republican pols, knows that he can lie and will never, ever be called on it by the media.

In the immortal words of Ted Koppel (in his interview with Jon Stewart): "Our job is to report what the politicans say - not to verify whether it's true." Koppel suggested that it's the job of some other unnamed jokers to dig out the truth. Frist knows of course that no one pays any attention to those who surface the facts after the BS has dropped out of the 24-hour news cycle.

Posted by: Taobhan on June 9, 2006 at 10:52 PM | PERMALINK

In estate tax there is a special use valuation under Section 2032A for real estate used for a closely held business or a farming operation. To qualify the farming real estate must:

Be at least 50% of the gross estate.

Have been used for farming for 5 of the 8 preceding year.

The real estate has to be at least 25% of the gross estate.

The heirs have to keep on farming the land for at least ten years.

This qualifies the estate for a maximum deduction of $870,000 from the deceaseds gross estate (2005, Frist doesnt give the year of this outrage).

There are other structures which can probably shelter the estate, e.g., under sections 303 and 6166, but this gives you an idea of what is available to a simple farmer.

Given Frists social circle, and what people have contributed about Williamson County, Ill bet the estate failed at least the first and third tests.

Posted by: mrm on June 9, 2006 at 10:53 PM | PERMALINK

Has commenter Ed Fitzgerald turned up a scoop, here? How many Frist-story-sized 167-acre farms can there be in Williamson County, Tennessee?

Posted by: gar on June 9, 2006 at 11:01 PM | PERMALINK

As any good lawyer will tell you, it's so much easier if you do it before you die. But then paranoid conservatives sometimes mistrust their children. I'm not sure that laws can cover this distrust.

Posted by: Where's osama on June 9, 2006 at 11:08 PM | PERMALINK

In the immortal words of Ted Koppel (in his interview with Jon Stewart: "Our job is to report what the politicans say - not to verify whether it's true."

The sad fact is -- that's true. That's how journalism operates.
I know it makes you barf -- but consider: Most news outlets are cheapo operations paying people as little as they can to crank out as much copy as they can ... under those circumstances, who has TIME to go and vet everything some pol tells you? Few do.
Nightline should, but local rags? No way.

Karl Rove & Co. understand that. They've taken advantage of this situation very well. Lie through your teeth -- no one will know. They assume you're telling the truth. They have to.

Posted by: Harpo on June 9, 2006 at 11:22 PM | PERMALINK

Harpo, Taobhan,
and "The Fool" have it dead to center:

"In today's politics, Republicans routinely lie with impunity. Why shouldn't Frist? You don't think a Democrat or a journalist is going to challenge him on it, do you? The Democrat will be too afraid of his donors and the journalist just sees it as his job to write down whatever they say."

End of story.

Posted by: koreyel on June 9, 2006 at 11:31 PM | PERMALINK

[i]The kids considered keeping the farm ... until they got the 'inheritance tax' bill, which typically runs 40 to 50% of the current market value of a property in excess of $1 million[/i]

Aside from the problems Steve pointed out, there's another wrinkle in Frist's statement here. There is a provision of the estate tax code that is designed to alleviate the problem Frist is talking about by permitting valuation of farmland by reference to its income producing potential rather than its hypothetical sale value. If the kids were truly "considering keeping the farm" as Frist postulates, then this alternative valuation would probably kick in, assuming the farm wasn't producing massive amounts of income, in which case they probably don't have much to complain about.

Posted by: Jeremy on June 9, 2006 at 11:32 PM | PERMALINK

PS

Josh Marshall has a terrific post up right now...

This will "lead" you there....

Posted by: koreyel on June 9, 2006 at 11:34 PM | PERMALINK

"In the immortal words of Ted Koppel (in his interview with Jon Stewart: "Our job is to report what the politicans say - not to verify whether it's true."

"The sad fact is -- that's true. That's how journalism operates."

Sure, now it is. But what would Edward R. Murrow say about all this.

"He was probably viewing the case via video tape; he has lots of experience with that."

Very sharp, Tigershark. Ka-zing!

Posted by: Kenji on June 9, 2006 at 11:37 PM | PERMALINK

Kenji, the problem is that Ed Murrow has long been dead and he's only a name from the ancient past for most people alive today. There's probably not a TV reporter working today who was an adult when Murrow was in his prime. Whatever standards for public responsibility Murrow may have intended to uphold when TV was in its infancy were ditched long ago by the media's corporate overlords. The blow-dried stiffs you see in the TV medium today have no aspirations to follow Murrow's example, even if they know about him.

Posted by: Taobhan on June 9, 2006 at 11:53 PM | PERMALINK

Yes, Vladi, estate planning is routine. In a way, that's the problem.

What is estate planning? One aspect is deciding how to leave one's accumulated wealth to provide for those one cares about, and how to use a will/trust structure that will fulfill one's desires. Everyone should do this.

The other aspect, which is unfortunately also routine, is when clever accountants and lawyers figure out how to use (or abuse) complex laws in order to avoid paying inheritance taxes. This is not productive activity for society. These highly intelligent professionals have the ability to do work that would actually benefit humanity. Instead, they are paid well to screw the government, one rich taxpayer at a time.

Posted by: ex-liberal on June 9, 2006 at 11:53 PM | PERMALINK

and one more thing, as I recall, the inheritance tax on a "small family farm" can be deferred and paid off over a long time period, maybe 10 years.

Posted by: supersaurus on June 10, 2006 at 12:04 AM | PERMALINK

Why would he put them in writing? Because he's politically stupid. He might be a surgeon and a genuis when it comes to flying off the cuff with repairs to the human body, but he's repeatedly demonstrated he has no aptitude for high level fast politics. We can only hope he's the Republican nominee in '08.

Posted by: Fred F. on June 10, 2006 at 12:15 AM | PERMALINK

Yes, all Fristing, all the time, in 2008!
Frist-Hastert. Frist-Hastert. Yahoo!

Posted by: Kenji on June 10, 2006 at 12:22 AM | PERMALINK

He's actually a stupid liar. Many in the US Congress appear to be intelligent people, but once they focus on staying in office and avoiding offence to their donors, they lose whatever sense they once had. Also, they let their staff and lobbyists prepare their speeches. Problem is that this applies to more than a few Democrats as well as Republicans. Until earmarking and signing statements are stopped, the Constitution is dead, and we have meaningless elections.

Posted by: anciano on June 10, 2006 at 12:40 AM | PERMALINK

These highly intelligent professionals have the ability to do work that would actually benefit humanity. Instead, they are paid well to screw the government, one rich taxpayer at a time.

If what they're doing isn't illegal, they aren't screwing anyone. But you already knew that. You're just trying to be a contrarian asshole. You've certainly got the asshole part down pat.

Posted by: Vladi G on June 10, 2006 at 1:07 AM | PERMALINK

Does Harvard have legacy/wealth determined admissions for medical school as well? Frist does not appear to be Harvard Med School material.

Posted by: nut on June 10, 2006 at 1:11 AM | PERMALINK

You people just don't get it: 9/11 changed everything.

Posted by: herostratus on June 10, 2006 at 2:07 AM | PERMALINK

Here's a final thought: why would the Senate Majority Leader and likely presidential candidate put all of these errors in writing?

Easy. Because he knows the horrible truth, the Republican voters will forget the details but remember the anger they felt at the horrible injustice of the 'death tax' that caused that poor family to sell the farm. They won't do any fact checking. They don't actually CARE if it is true or not, because it reinforces their beliefs. In the end it won't matter to them that every word of it was a baldfaced lie, because it has already settled into their brain just like liberals are unpatriotic or evolution is a lie.

He could write it on the moon in letters so large they could be read without aid of a telescope on a clear night and the people he is pandering to...just...won't...care.

Posted by: Eric Paulsen on June 10, 2006 at 2:26 AM | PERMALINK

Every night I pray to Marx and Stalin that the good liberals in congress will take all the rich people's money and give it to welfare queens and eco-terrorists.

And then I watch some gay porn.

Posted by: Strawman on June 10, 2006 at 2:28 AM | PERMALINK

Yeah, uh, okay...

Hey, does anybody know what happened to Firedoglake?
Did they get NSAed?

Posted by: Kenji on June 10, 2006 at 2:44 AM | PERMALINK

手机铃声 和弦铃声下载 手机铃声免费下载 手机铃声下载 手机铃声下载 mp3铃声下载 下载手机铃声 三星手机铃声 手机铃声 免费铃声下载 铃声下载免费 搞笑铃声下载 搞笑免费铃声 铃声下载免费 搞笑下载铃声 下载铃声 三星铃声 免费铃声下载 MP3铃声下载 手机铃声下载 手机铃声下载 手机铃声 MP3铃声下载 手机铃声下载手机铃声 免费铃声下载 免费铃声下载 搞笑免费铃声 免费铃声下载 手机铃声 mp3铃声下载 免费铃声下载搞笑下载铃声 下载铃声 mp3手机铃声 三星铃声下载 免费手机铃声下载 手机铃声下载 手机铃声下载 免费铃声下载 搞笑手机铃声 手机铃声免费下载免费铃声下载 铃声下载免费 手机铃声下载 免费铃声下载 免费铃声下载 手机铃声下载 免费手机铃声下载 和弦特效铃声下载 文秘写作 竞聘演讲稿 个人工作总结 八荣八耻演讲稿 中国文秘网 治疗牛皮癣,阴虱特效药 免费歌曲铃声下载 免费手机铃声下载 免费铃声下载 mp3铃声下载 免费手机铃声下载 手机铃声下载 免费铃声下载 手机铃声下载 免费铃声下载 手机铃声下载 手机铃声下载 mp3手机铃声 免费手机铃声下载 免费铃声下载 免费铃声 手机铃声下载 手机铃声下载 免费铃声下载 搞笑铃声 免费手机铃声 免费铃声免费铃声下载 mp3手机铃声 mp3铃声下载 免费铃声 手机铃声免费下载 mp3铃声 免费手机铃声下载 免费手机铃声下载 手机铃声 手机铃声 免费铃声下载 手机mmf铃声下载mp3手机铃声 手机铃声 手机铃声免费下载 铃声下载 免费铃声 手机铃声下载 免费手机铃声免费铃声 免费手机铃声 mp3铃声 mp3铃声下载 免费铃声

Posted by: gdsfd on June 10, 2006 at 4:33 AM | PERMALINK

The inheritance tax is "so important" to Frist because the Frist family has a family farm. It is called HCA(Health Corporation of America). Frist's brother took $154,000,000.00 out of it as CEO several years back.

Posted by: lee on June 10, 2006 at 4:46 AM | PERMALINK

Where's osama gives the best argument against the estate tax -- it turns dying into a contest of lawyers and accountants. Those with slick advisors escape the tax. Those who merely follow the law get screwed.

Isn't that kind of how life is though? I don't know any successful people who didn't use a few talented lawyers and accountants somewhere along the way.

Posted by: blank on June 10, 2006 at 4:57 AM | PERMALINK

While not exculpatory for Hon. Sen. Frist, it should be mentioned that the Several States might have their own estate tax (the Commonwealth of Massachusetts has an estate tax which kicks in around $800,000). This is still manageable with planning, but it does exsist.

Posted by: jhm on June 10, 2006 at 7:00 AM | PERMALINK

Frist acquired his money the old-fashioned way - he inherited it! Just like a significant portion of the Forbes 400.

If conservatives really believe that wealthy people got that way because they work harder or are smarter than everyone else - set the estate tax at 100%! Let the black kid who was unfortunate enough to be born in the ghetto and Steve Forbes start from the same place and see who gets further in life...

Posted by: Stephen Kriz on June 10, 2006 at 7:04 AM | PERMALINK

We had the Iron Age, The Bronze Age, The Atomic Age, The Space Age, and now the "Just Making Shit Up" Age. Looks like we're all living the American Ream.

Posted by: kostya on June 10, 2006 at 7:21 AM | PERMALINK

Shut up! Shut up! Shut up!

Posted by: Bill Reilly on June 10, 2006 at 7:37 AM | PERMALINK

Some people would consider it a good deal to get a "property worth in excess of $1M" for a few hundred thousand. They would even consider going to a "bank" and taking out a "loan" if they didn't have the money handy.

This only makes sense if you believe the idea that any tax taints a windfall to the point it's undesirable.

Posted by: Jeff on June 10, 2006 at 7:56 AM | PERMALINK

why would the Senate Majority Leader and likely presidential candidate put all of these errors in writing?

To fool red-state rubes into thinking the estate tax is an evil thing that will actually affect them, so they'll vote against it, which will enable Frist's super-rich patrons to keep the vast majority of the countries wealth concentrated within a relatively few families?

Posted by: Charlie Bucket on June 10, 2006 at 8:01 AM | PERMALINK

I think everyone who has commented on why he'd put these lies in writing is missing the real point. In Frist's culture political lies are virtuous. It shows them he's man enough to steal from the other side. They think he's lying for their benefit. They believe honor among thieves is real and they're on the inside. This is the crux of the culture of corruption and they're wrong in two ways. First it's just wrong and second they're not really on the inside. They're getting fucked just like the rest of us.

Posted by: dennisS on June 10, 2006 at 8:08 AM | PERMALINK

Living 'round here myself, I suspect Ed Fitzgerald has indeed unearthed Bill "Catkiller" Frist's mystery family. In the last 15 years, McMansions have sprouted right and left in Williamson County. There are few real estate holdings left of that size remaining in the county; many if not most of the remaining big estates are owned by country music stars. Page High School is on the outskirts of Franklin, TN, one of the fastest growing suburbs in the entire Southeast, and whatever undeveloped land that remains around it is some of the most sought-after real estate in the country.

Around the edges of every big metropolitan area in the US, I would guess there are a few of these stories - children of long-time family farmers who, after years of watching their parents barely making ends meet, are now seeing a shot at a big payday by selling to the developers once Momma and Daddy are gone. This angle of the estate tax debate is about nothing except a few lucky heirs smelling a big payday and wanting to keep what's theirs.

Posted by: dr sardonicus on June 10, 2006 at 8:18 AM | PERMALINK

Frist: Worst Senate Majority Leader Ever

Posted by: Robert on June 10, 2006 at 8:59 AM | PERMALINK

Frist told this lie because it represent the voters he represents--the rich ones. He doesn't give a damn about the real family farms which for the most part have been replaced by corporate agribusiness. He does care very deeply about the rich who have the little ol horse farm out in the country for weekend entertaining and tax breaks. It's his job to lie for them and he's more than happy to do it because he's one of them.

Posted by: sparky on June 10, 2006 at 9:39 AM | PERMALINK

To be absolutely correct Frist is technacally wrong. The tax is not now 50% of the value over 1 million. But In 2011 the tax will go back to the 2002 level which is 50% of the value over 1 million. I think that any inheretance tax is bad. But I guess the tax and spend democrats want every thing they can get.

Posted by: TruthPolitik on June 10, 2006 at 9:42 AM | PERMALINK

Why shouldn't he put them in writing? Given the modern day media in this country, it's not like he's going to pay a price for it.

--Rick Taylor

Posted by: Rick Taylor on June 10, 2006 at 9:49 AM | PERMALINK

Besides you Steve, a handful of other bloggers, who's questioning the story?

Hell, Drudge probably has it up as fact.

Posted by: Don on June 10, 2006 at 9:51 AM | PERMALINK

The *effective* tax rate on the very few estates that actually pay any tax is around 20%, per an article by Floyd Norris in today's (June 10) NY Times. So Frist was wrong on another fact as well. (The *effective* tax rate is the tax that's actually paid, not the nominal rate. Conservatives, for example, always complain about the top marginal income tax rate of 39.6%, but nobody actually pays at that rate. The effective rate for the most wealthy people in America is little more than the rate for most everybody else.)

Posted by: Gerald Scorse on June 10, 2006 at 10:21 AM | PERMALINK

Boy, talk about misleading. Frist's example here, and his use of the term "inheritance tax", is extremely pernicious and devious.

More than a few states impose their own transfer tax on assets in a decedent's estate. This is a completely different tax than the federal estate tax. In Tennessee, it's known as the inheritance tax.

As mentioned, you pay no Federal estate tax if your estate is valued at $2 million or less. Why? The first $2 million is exempt from tax. Many states match this dollar for dollar - no state estate/inheritance tax if your estate is valued at $2 million or less.

But not in Tennessee! Tennessee's exempt amount is only $1 million. In other words, if you're a resident of Tennessee, and if your estate is worth $2 million, you won't pay any Federal estate tax. However, you will pay a state inheritance tax on the additional $1 million.

Down in those parts, it's known as the "Tennessee Gap".

This little anomaly is very well known to Tennessee estate planning lawyers.

I'd wager and give odds that the example old Bill uses here involves the Tennessee inheritance tax, not the Federal estate tax.

(crossposted at The Carpetbagger)

Posted by: knobboy on June 10, 2006 at 10:35 AM | PERMALINK

The "Tennessee Gap", one of those consequences of having no state income tax.

That, and paying the highest sales tax rate in the country...

Posted by: dr sardonicus on June 10, 2006 at 10:38 AM | PERMALINK

Ed Fitzgerald (link didn't work--pay wall) has no doubt hit the example Frist used. Unfortunately, I'm not gonna pay The Tennessean for the opportunity to read the thing in full, but I notice that the teaser lede (use the search feature for the Archives) for it uses the term "inheritance tax" and not "estate tax" or even the canard "death tax." (If I refuse to pay the "death tax," do I live forever? If it's really a death tax, how the hell do they collect it? "Pay up or we'll kneecap you!" won't work, here.) The Carpetbagger spots the peculiar Tennessee flavor of "inheritance tax," a tax over which Federal action has no effect because the Feds don't collect it. And, a tax levied by those damned liberals who control the Tennessee lege, fresh from screwing Tennessee Medicaid recipients.

And, as for the commenter above, the Republican who, five years into the Bush Administration, used the phrase "tax and spend" without irony, I'm opening speculation here on exactly how thick is the skin of the bubble in which he lives.

Posted by: Brian C.B. on June 10, 2006 at 11:14 AM | PERMALINK

Frist is likely including Tennessee's state estate tax. A typical misrepresentation by rightards.

Either that, or he's more woefully incompetent than we assumed.

Posted by: MeLoseBrain? on June 10, 2006 at 11:20 AM | PERMALINK

Yep, Frist's argument was bogus. I'd just as soon see the inheritance tax reduced from the 55% level, but that doestn't justify playing fast and loose with the facts.
Posted by: ex-liberal

Except the estate tax isn't 55%, it's 45%. And, as other have pointed out, it's 45% for the amount over the exemption of $2 million per single exemption, or $ million for a couple.

If a couple has an estate valued at $5 million, their tax would be $450k, an effective tax rate of 9%. That's too high?

Posted by: MeLoseBrain? on June 10, 2006 at 11:24 AM | PERMALINK

Where's osama gives the best argument against the estate tax -- it turns dying into a contest of lawyers and accountants. Those with slick advisors escape the tax. Those who merely follow the law get screwed.
Posted by: ex-liberal

So why not get rid of gift taxes? Hell, the income tax code is complex, let's just get rid of taxes altogether.

Newsflash, ex-lib, lawyers and accountants are involved in every level of tax planning. That's why they have jobs. One could argue that income tax turns living "into a contest of lawyers and accountants."

If an estate-holder has assets of any value, and hasn't consulted an estate planner, they deserve what they get.

Posted by: MeLoseBrain? on June 10, 2006 at 11:30 AM | PERMALINK

To get the exemption of "$4 million per couple" actually requres estate planning. Lets say the husband and wife are worth $5miillion and the wife dies first, husband would inherit her estate and $2million exemption would apply. He pays taxes on $0.5 million and is now worth ~$4.75 million. When he dies, the children would pay taxes on 4.75-2=$2.75million with an effective exemption of $2.25 million. To fully use each couple's exemption needs fair amount of estate planning.
Posted by: vj

Your last statement is absolutely true, but a person pays no estate tax on assets transferred from a spouse. Also, families with a lot of assets can transfer assets to children over time. The estate tax system, believe it or not, is very forgiving. it's a lot easier to legally shelter estate assets than it is income.

Posted by: MeLoseBrain? on June 10, 2006 at 11:35 AM | PERMALINK

truthpolitik-learn to spell and while your at it why don't you try to make sense.Oh and let us not forget the lame meaningless platitude of tax and spend democrats.Can you say deficit spending

Posted by: gandalf on June 10, 2006 at 11:36 AM | PERMALINK

Brian C.B.'s snark led me to think what would the righties do with a line like "tax and spend liberals ?" Maybe emphasize the necessary like "TAX and spend" as opposed to their tax and SPEND". It's all in the frame.

Posted by: opit on June 10, 2006 at 11:38 AM | PERMALINK

The other aspect, which is unfortunately also routine, is when clever accountants and lawyers figure out how to use (or abuse) complex laws in order to avoid paying inheritance taxes. This is not productive activity for society. These highly intelligent professionals have the ability to do work that would actually benefit humanity. Instead, they are paid well to screw the government, one rich taxpayer at a time.
Posted by: ex-liberal

Again, how is this restricted to the estate tax? It occurs all throughout the tax code. So maybe we should shelve taxes altogether?

Posted by: MeLoseBrain? on June 10, 2006 at 11:46 AM | PERMALINK

Where's Osama:

The original owner could have transfered ownership of the property to his children prior to his death and paid zero taxes.
I don't see that anyone else has challenged this, but there is such a thing as gift taxes, which have similar rates and similar exemptions to the estate tax, specifically to prevent what you're proposing. Otherwise, no one would ever pay estate tax -- they'd just give everything away on their deathbed.

There are some little tricks you can play with trusts and so forth, but you can't really escape estate taxes by just giving your property away if your estate is large.

Posted by: wahoofive on June 10, 2006 at 1:17 PM | PERMALINK

"truthpolitik-learn to spell and while your at it why don't you try to make sense.Oh and let us not forget the lame meaningless platitude of tax and spend democrats.Can you say deficit spending"

OOps sorry for the misspelling. (darn did I miss spell misspelling????)

And sorry you don't understand. But do you think an inheritence tax of 50% of any thing over $1 million is fair. If my information is correct that is what it was in 2002 and what it will be in 2011 if nothing is done.

Try to understand our monetary system and then you might understand deficit spending.

Posted by: TruthPolitik on June 10, 2006 at 3:07 PM | PERMALINK

Steve, you shouldnt follow the path of nearly everyone in the media and shy away from the L word. Obfuscations, misspokes, falsifications, fabrications and the like only soften the effect of your words. What Frist did was lie.

As one voice we should demand the name of that mythical farm family. Surely he wont mind if the media interviews them. It would be a great help to his cause.

Posted by: James of DC on June 10, 2006 at 3:36 PM | PERMALINK

vj said "To get the exemption of "$4 million per couple" actually requres estate planning." I suppose that would depend on the law of the state you lived in when you died.

But here may be the root of the problem: people don't really want to plan for what happens to their property after they die. So they don't and they pay maximum tax.

But I wouldn't call it a "fair amount" of planning. All they have to do is have a will that leaves the amount covered by the exemption to their kids rather than their spouse.

It's when you want to get fancier than that, i.e. the spouse wants it all and then doesn't want to pay tax on it later, that you find you need some loopholes.

And of course, it's another area when the tax law benefits people who can get legally married over those who cannot.

Posted by: Cal Gal on June 10, 2006 at 4:17 PM | PERMALINK

I have died several times, and each time the government hits me with the death tax. And I only made 37 dollars last year.

Posted by: Yeah, Whatever on June 10, 2006 at 5:39 PM | PERMALINK

David Cay Johnston's classic NY Times article on the estate tax is still freely available. It's recommended reading for anyone encountering the BS argument that estate taxes decimate family farms.

http://www.nytimes.com/2001/04/08/business/08ESTA.html

Quote: Neil Harl, an Iowa State University economist whose tax advice has made him a household name among Midwest farmers, said he had searched far and wide but had never found a farm lost because of estate taxes. "It's a myth," he said.

Even one of the leading advocates for repeal of estate taxes, the American Farm Bureau Federation, said it could not cite a single example of a farm lost because of estate taxes.

...

Family farmers are often cited as victims. As Senator Charles E. Grassley, an Iowa hog farmer and chairman of the Senate Finance Committee, put it, "The product of a life's work leaches away like seeds in poor soil."

Yet tax return data show that very few farmers pay estate taxes. Only 6,216 taxable estates in 1999 included any agricultural land and equipment, the I.R.S. report shows. The average value of these farm assets was $440,000, only about a third of the amount that any married couple could leave untaxed to heirs. What is more, a farm couple can pass $4.1 million untaxed, so long as the heirs continue farming for 10 years.

In Iowa, the average farm has a net worth of $1.2 million. Loyd A. Brown, president of Hertz Farm Management in Iowa, which runs more than 400 farms in 10 states, said that while he didn't know of anyone who had lost a farm because of the estate tax, he thought Congress should either eliminate the tax or increase the amount that could be inherited untaxed.

/Unquote.


Read the article. Save a copy on your hard drive. Disseminate it far and wide.

Posted by: The Ox on June 10, 2006 at 7:56 PM | PERMALINK

Try to understand our monetary system and then you might understand deficit spending.

I know that such spending doesn't require taxing, just borrowing. You, a Republican, should have that down cold: expanding the public debt so as to direct money to your friends is a core value of your party.

Posted by: Brian C.B. on June 10, 2006 at 8:27 PM | PERMALINK

"Try to understand our monetary system and then you might understand deficit spending.

I know that such spending doesn't require taxing, just borrowing. You, a Republican, should have that down cold: expanding the public debt so as to direct money to your friends is a core value of your party."

I agree that it isn't the best thing to do. But if I understand our monetary system correctly it is necessary. Take a look at a dollar bill it says federal reserve note. It's nothing but a debt to the federal reserve. How do we get more notes to expand the economy? Some body has to borrow them. Who can do that and never pay it back? Our good old Uncle Sam. It's not a good system. But it's our system

Posted by: TruthPolitik on June 10, 2006 at 8:49 PM | PERMALINK

By the way Bill Clinton tried balancing the budget and started the recession that Bush inherited.

Posted by: TruthPolitik on June 10, 2006 at 8:52 PM | PERMALINK

'TruthPolitik' posted:

"By the way Bill Clinton tried balancing the budget"

He did.

.

"and started the recession that Bush inherited."

There was no "recession" during President Clinton's two terms in office, therefore no recesssion for the Boy Emperor Clown Criminal to inherit.
.

Posted by: VJ on June 10, 2006 at 9:52 PM | PERMALINK

'pencarrow' posted:

"But then why bother to have an estate tax in the Frist place??"

To tax income that has never previously been taxed. The Capital Gains death exemption is the birth canal to dynasties.
.

Posted by: VJ on June 10, 2006 at 9:54 PM | PERMALINK

BTW, for future reference, please do not confuse the poster "vj" with me, 'VJ'. I guess some people don't have a life.
.

Posted by: VJ on June 10, 2006 at 9:56 PM | PERMALINK

VJ,

go put your head back in the sand. In the last querter of Clinton's presisdentcy the economy was tanking and it was his budget that was in effect in 2001 when his recession began.

Posted by: Clinton era on June 10, 2006 at 11:52 PM | PERMALINK

melosebrain - Under current (bizarre) law the estate tax is changing year by year. It reduces until 2010, when it's zero. In 2011, it goes back to 55% and stays there.

I assume (or hope) Congress can agree on some compromise level to fix the estate tax at, rather than have it bounce down and up like a rubber ball.

Posted by: ex-liberal on June 11, 2006 at 12:28 AM | PERMALINK

clinton era: In the last querter of Clinton's presisdentcy the economy was tanking and it was his budget that was in effect in 2001 when his recession began.


f-y-i...

unemployment for the last month of the clinton presidency was 4.0-percent...(lots lower than the current figure)

and according to the national bureau of economic research:

the recession started in march 2001...

and ended...november-2001

http://www.nber.org/cycles/recessions.html

when bush's first budget began...cue the massive deficits....

and since then..

According to The Economist magazine: Bush "has the dubious distinction of presiding over the largest negative budget swing in American history."

From a surplus of $236 billion in 2000, the year he was elected, to a deficit of $412 billion, or 3.6% of GDP, when he stood again in 2004.

http://www.economist.com/agenda/displayStory.cfm?story_id=4289485

and between 2005 and this year...another 650-billion will be added to fed. debt...at least..

not counting war spending which just crossed 350-billion...

all of this is why the gop had to raise the debt limit to 9-trillion....(was at 5.6-trillion when bush came in)

that means the debt has grown since Bush took office in 2001 -- equal to about $30,000 for every man, woman and child in the U-S.

finally...for more perspective...

From 1998 to 2001, the federal government ran total annual budget surpluses of between 69.2 billion and 236.2 billion, according to figures from the Congressional Budget Office.

not that facts matter to bush defenders

Posted by: thisspaceavailable on June 11, 2006 at 7:50 AM | PERMALINK

>>Otherwise, no one would ever pay estate tax -- they'd just give everything away on their deathbed.

'Gifts in expectation' are brought back into the estate for tax purposes.

Posted by: CFShep on June 11, 2006 at 8:41 AM | PERMALINK

'Clinton era' posted:

"go put your head back in the sand."

I'm afraid you're the one whose head is upside down.

.

"In the last querter of Clinton's presisdentcy the economy was tanking and it was his budget that was in effect in 2001 when his recession began."

False.

What 'thisspaceavailable' posted.

Oh, and you need to stop swallowing the RightWing propaganda.
.

Posted by: VJ on June 11, 2006 at 12:43 PM | PERMALINK

Stories don't have to be true to be effective. Bill Frist knows that. Who cares if the facts of the story are completely misrepresented as long as the Senator can persuade people to protect his family's wealth.

This is all about Senator Frist's personal greed.

It has nothing to do with whether the inheritance tax is just.

Posted by: freelunch on June 11, 2006 at 4:47 PM | PERMALINK

Arable (farmable) land in the US does not value (for more farming) at more than 3-4K tops. 2-2.5K is more like it. No way a 170-acre farm makes the estate tax cut off. I'd suggest this estate values to less than half a million.

Posted by: Nash on June 11, 2006 at 9:24 PM | PERMALINK




 

 

Read Jonathan Rowe remembrance and articles
Email Newsletter icon, E-mail Newsletter icon, Email List icon, E-mail List icon Sign up for Free News & Updates

Advertise in WM



buy from Amazon and
support the Monthly