The Phone Tax, a “temporary” tax enacted to fund the Spanish-American war, bravely soldiers on, but not all taxes are so fortunate. , the U.S. House of Representatives voted to abolish the Estate Tax — called the “death tax” by those against it and the “Paris Hilton tax” by those who’d rather keep it. If you’re planning on leaving several million dollars behind when you die this may matter to you more than it does to me, but it will keep another $290 billion out of the government’s hands over the next decade and that makes me happy. I’d rather have Paris Hilton spending that money than Donald Rumsfeld.
How you can resist funding the government → about the IRS and U.S. tax law/policy → how is tax law/policy/administration changing? → estate tax
I haven’t much been following the debate over the “estate tax” repeal proposal. My instinct was to think that if it is a tax repeal, I’m all for it, even though this one seems to be mostly a gift to the yacht set.
But if Stuart Levine is right, this proposal is no tax cut at all, but merely a tax juggling where one hand gives and the other hand takes away:
[P]eople who would not benefit from the abolition of the estate tax would be exposed to tax liability they currently escape due to the operation of the basis step-up rules. The estate tax repeal would likely abolish these rules, thus subjecting capital gains to income tax, in cases where, under current law, the gains would escape tax entirely.…
…The simultaneous repeal of the estate tax and of the basis step-up rules would impose a tax on many, offering relief to only a few. Consistent with Republican philosophy, of course, the few are very rich, the many merely the well-to-do and the simply wealthy.…
…A lot of people, including people in the middle class, benefit from the basis step-up rules. As the estate tax law changes currently enacted take effect, only the few very rich will benefit from a repeal of the estate tax. The losers outnumber the winners by at least a factor of 20. The repeal of the estate tax will have the effect of imposing tax on the less well-to-do to satisfy the really, really wealthy.
NWTRCC has added some Readings on Money to their website.
At the NWTRCC national gathering in Fall, , we held a discussion about money. The seed for this discussion was an article by Karen Marysdaughter about The Influence of Money on Decisions to Engage in War Tax Resistance.
Some notes from this discussion are included on the new NWTRCC page, along with the following:
- George Salzman’s “Inheritance and Social Responsibility” — about how he creatively used an inheritance in socially productive ways while keeping the IRS’s hands off of it.
- A debate on interest between Juanita Nelson and Bob Irwin. Nelson sees interest on loans and bank deposits and such as inherently unethical, Irwin disagrees.
- Jay Sordean takes a look at the Federal Reserve and how money comes into being in his essay on War, the National Debt, Taxes, and the Creation of Money.
- Another collection of writings looks at various issues associated with Nonprofits and Tax-Exempt Status. While becoming tax-exempt and then defending your tax-exempt status may seem like it should be a no-brainer for folks who are tax resisters, tax exempt status comes with strings attached and may be more trouble than it is worth.
- Finally: one of the traditionally most successful outreach tools of war tax resistance groups is the “penny poll.” This page shows you how different groups have gone about making government budget priorities visible and visceral.
Some bits and pieces from here and there:
- You can find minutes and reports from ’s NWTRCC National Gathering in Cleveland on NWTRCC’s website.
- There is typically a statute of limitations for federal tax crimes. However, during wartime the statute of limitations for crimes “involving fraud or attempted fraud against the United States or any agency thereof in any manner, whether by conspiracy or not” goes into suspended animation “until 5 years after the termination of hostilities as proclaimed by a Presidential proclamation, with notice to Congress, or by a concurrent resolution of Congress” where the definition of “the term ‘war’ includes a specific authorization for the use of the Armed Forces, as described in section 5(b) of the War Powers Resolution (50 U.S.C. 1544(b)).” There are some indications that the government is seeking to suspend the statute of limitations for federal tax crimes because of the present state of war.
- TaxProf Blog reports: “The Treasury Inspector General for Tax Administration yesterday reported that 372,000 taxpayers erroneously claimed education tax credits in , totaling $532 million (an average of over $1,400 improper credit per taxpayer).”
- Those tax resisters lucky enough to be expecting a large inheritance may take heart from this story of someone who successfully engineered her will so that her heir could donate to charity exactly enough of her estate so that she would owe no estate taxes on the remainder.
- Anti-abortion political pressure has led to Congress inserting language in the upcoming health care legislation that would prohibit taxpayer money from going to pay for abortion.
Tom Tomorrow wonders when people opposed to their tax money being spent on war will get that kind of respect:
- Another aspect of the upcoming health care legislation is that it includes a big role for the IRS. This isn’t because the IRS is particularly skilled at administering social welfare programs (indeed fraud is rampant in programs like the earned income tax credit or those education tax credits mentioned earlier in this post), but because legislators have various incentives to hide the spending behind their legislation by not spending outright but only via tax credits and deductions and such. Since increasing funding for the IRS is not politically popular, this all may have the effect of saddling the agency with more responsibility without giving it sufficient resources.
- A type of tax protest that isn’t quite tax resistance but seems worth keeping an eye on involves married gay couples who plan on defying the federal Defense of Marriage Act by filing their tax returns as though their marriages were recognized by the federal government. Thom Winchester explains why he and his husband plan to file as “married filing jointly” next year, and why he thinks the Constitution is on his side.
A letter to the editor of the Friends’ Intelligencer published on , written by “J.M.T., Jr.” (probably Joseph M. Truman, Junior):
This excerpt can also be found in the book American Quaker War Tax Resistance.
The allusion in the Intelligencer to the legacy of $100,000, left by John G. Lane, of West Philadelphia, to New York Yearly Meeting, of which James Wood, Mt. Kisco, is a member, also some time ago to the legacies of our late friend, Harriet W. Paist, showing that one-tenth of these will be deducted for State tax and United States “war tax,” prompts me to call attention to a method by which this may be avoided.
Our late friend, Jesse Ogden, although wearing the Friends’ distinctive dress and supposed to be a member, did not actually become such till a few years before his death, for which privilege he felt grateful, and when it was decided to start a free school fund, in conversing with John Saunders (one of the committee), on his way from meeting, he expressed his interest, and that he would like to aid it, but his income being limited, he was not in a position to do so. Subsequent conferences resulted in Jesse presenting a communication offering to transfer to the monthly meeting twenty shares of railroad stock (par value $1,000), conditioned on the income being paid to him during life. This was accepted, and the matter thus settled did not suffer any “shave” on account of collateral inheritance tax.
Where possible, it is very desirable to have concerns attended to whilst the parties are living. The late Robert Morrisson, of Richmond, Ind., had left in his will a bequest for a public library, but he afterwards concluded to erect it whilst he was living, and remarked his satisfaction in doing so.
There’s a new issue of NWTRCC’s newsletter out, with content including:
- A preview of this year’s nationwide Tax Day actions.
- A look back on the oppression of “bond slackers” 100 years ago during World War Ⅰ in the U.S.
- Notes on issues for war tax resisters crossing the border, glitches with the latest tax bill, the difficulty in understanding IRS interest rates, new estate tax exemption limits.
- Advice on starting a local war tax resistance support group, writing letters of protest to the IRS, and a review of “Walden: The Video Game.”
- Announcing the NWTRCC national gathering, to be held in Los Angeles .
- Michael McCarthy reflects on the collective war tax redirection practiced by a group he is part of in Michigan.
