Regardless of how you may have felt about George Steinbrenner during his life, you must admit when he died a few weeks back he went out a winner. His prized possession, the New York Yankees, are on top of the baseball world having won their 27th World Series last October and apparently poised to make another run at it this fall. But, more importantly, especially for his heirs, he died during a year with no federal estate tax.
The latter victory is a really big deal for the Steinbrenner heirs since George’s net worth was estimated to be about $1.1 billion. If Congress had not messed up and allowed the 45 percent federal estate tax to lapse last January, they would have been required to pay $500 million to Uncle Sam. The need for huge liquidity to pay the tax may have forced the family to sell the team it has owned since 1973.
It may be too late for them to stick it to the Yank’s deceased owner but members of Congress are planning to reinstitute the levy next year., Of course, they plan to do it with a vengeance by making the new rate of pillage 10 points higher at 55 percent to make up for their terrible error of letting the federal estate tax lapse in 2010.
It’s interesting that given how our politicians boast about how we honor property rights in this country, they have and will again impose a huge redistributive tax on the dead and their heirs. I mean 45, 55 percent? Isn’t this exorbitant? Taking the Steinbrenner fortune as an example, didn’t he amass it while at the same time employing 1000s of people? Didn’t his venture enrich the lives of millions of baseball fans? Don’t these social benefits account for anything?
But, estate taxes are not the only assault on property rights in America. The whole “American dream of owning one’s own home” is a farce. In America, you never fully own your own home. If you have to take out a loan to buy your house then you jointly own it with the lender until the debt is repaid. That is fair enough and represents a mutual business arrangement that is beneficial to both sides. The homeowner gets the ability to purchase his house and the bank makes money by collecting interest.
What is not fair is that of no choice of your own you are also and always a joint owner of your home with the local taxing authority (either town and/or county). The bottom line is that if you pay off your mortgage to the bank but fail to pay property taxes on your house the government can take it away from you. Unlike the bank, the government has no risk or stake in your property. It becomes a joint owner with you not because it put up the money or gave you a loan to improve the property – it becomes a joint owner simply because it says so in exchange for so called promises to provide services to you that you may not even want or need.
In my own case, I pay property taxes on my summer home. These taxes go towards schools, parks, roads, trash removal, courts, libraries, street lights, and other communal resources in my county. I really only partake of trash removal and roads. Thus, I have money essentially stolen from me under the threat of my house being confiscated to finance the wants and needs of others. Would you go into a store, buys things you didn’t personally use, and leave them for the next patron? Of course, not, but property owners do this all the time when they pay in many cases exorbitant amounts to local taxing authorities for essentially the right to keep their own homes.
And it is amazing that the statist do-gooders who usually stand up tall for the economically disadvantaged and downtrodden rarely advocate for the thousands if not millions of elderly property owners who living on fixed budgets lose their homes due to high property taxes. The following quote from a taxpayer on a New York state government site says it a lot better than I can:
“I fully agree on all the points gesiburn has stated. I am in my late 70’s, not working at my profession now, and having to spend down my savings and a reverse mortgage in order to afford keeping my home that I have lived in since 1967. The taxes including the largest, the school tax, is an enormous burden on me and I and my late husband have dutifully paid the school taxes with no children in the system all these years. It is time that we seniors have this enormous school tax burden lifted from our shoulders.”
Two of the major tenets of communism are: abolition of all rights of inheritance; and abolition of property in land and application of all rents of land to public purposes. Although we still retain the right of private ownership of property in America, estate and property taxes put us perilously close to fulfilling the dreams of communists everywhere. The death tax should be abolished altogether to preserve the full right to property ownership. Local governments must slash taxes, impose user fees, and solicit charity to pay bills in order to protect property rights. If these two things happen, we can all go out winners like George Steinbrenner.Powered by Sidelines