The Estate Tax is
Truly a Patriot’s Tax, but Where Are the Patriots
By Andrew H. Dral
In times of war congress has
consistently made the decision to dig into the deep pockets of the
well-heeled. Politicians with greater foresight than our current leadership
knew the wealthy would be more than willing to contribute to the war effort,
because they reaped the overwhelming benefit of being on the winning side of a
conflict.
During the American Civil and
Spanish American Wars’ of 1862 and 1898, respectively, congress instituted
patriot taxes to fund the war efforts. President Woodrow Wilson enacted the
patriot tax, again in 1916, through the House Ways and Means committee to fund
the dough-boys fighting in World War I. Consumption taxes of the day were too
much of a burden on the families of the men fighting the war, so the
wealthiest of Americans were asked to step-up by contributing funds equal to
the benefit they received from the government’s protection of their assets.
Those assets came in the form of an estate. The patriot tax permanently
funded the military defenses of a growing nation.
Now that we have a defense
budget greater than the defense budgets of the next largest defense budgets of
the next 15 countries combined, it seems logical that the folks with the most
to lose and most to gain should contribute the most to the defense of their
own assets and our nation. But the wealthiest of Americans of today have
decided that the tax burden should fall on the lower and middle classes, the
families sacrificing men and women in the Iraq War, not themselves. You truly
have to question the patriotism of U.S.’ current breed of coupon cutters. The
following chart shows the manipulations playing out in congress with our
patriot tax.
Patriot Tax Exemption and Rates
Individual
Married Couple
Patriot
Year
Exemption
Exemption
Tax Rate
2003
$1 Million (MM)
$2MM 49%
2004-2005
$1.5MM
$3MM 47%-48%
2006-2008
$2.0MM
$4MM 45%-46%
2009
$3.5MM
$7MM 45%
2010
Unlimited
Unlimited 0%
2011-thereafter
$1MM
$2MM 55%
Only 1% to 2% of all estates
will pay any patriot taxes. Most estates qualify for the married couple
exemption, double the individual exemption. Only 0.16% of all estates pay
half the government’s patriot tax receipts. The majority of patriot taxes are
paid by estates worth over $10MM and most estates circumvent the patriot tax
through charitable deductions. Less than 1% of all heirs are affected by a
patriot tax. Of the estates, paying the patriot tax in 2003, the average
patriot tax rate was only 18.8%, due to deductions and exemptions. Your
annual income will affect your patriot tax rate. It takes an annual income of
$297,000, to reach the top patriot tax bracket. In a study of those favoring
repeal of the patriot tax, only 1% of respondents knew someone having to sell
a farm or a business to pay a patriot tax.
Andrew H. Dral “The
Rabble”