There's a Jimmy Buffet song called
, and the chorus starts out, "Good guys win every once in a while...". The song came to mind when I read about Dan Duncan, and the propitious timing of his death in March. At the time of his death, Duncan was worth an estimated $9 billion and was ranked 74th richest man in the world by Forbes.
There's an old saying that the only sure things in life are death and taxes, but thanks to a year-long lapse in the estate tax, the Duncan estate only has to deal with one of those tragedies. You see, the 45% estate tax expired at the end of 2009, and the 55% estate tax doesn't go into effect until 2011. By dying in 2010, Dan Duncan saved his estate anywhere from $4.05 billion to $4.95 billion in taxes.
I can already hear the screams of rage from the big government liberals in the crowd. Cool your jets, ladies. Duncan was one of the good guys. He started out with $10,000 and a couple of trucks and grew that into a natural gas company worth billions of dollars. Along the way, he donated hundreds of millions of dollars to charity -- where that kind of money goes to far better use than government fraud, waste, and abuse.
The estate tax is shameful thievery, and the financial equivalent of double jeopardy. Every dollar an estate passes on has already been taxed (and taxed heavily), and the IRS getting their filthy mitts on more than half a person's life work at the time of their death is tantamount to grave robbing. (full disclosure: my dad was a mailman and my mom never worked, so the estate tax obviously wasn't an issue when he died. Don't think I'm bitching about it because it cost me money; it didn't. Wrong is wrong.)
Now there's a movement afoot in Congress to reinstate some kind of estate tax for 2010 and make it retroactive so they can grab Duncan's dough:
The one-year lapse in the estate tax was signed into law by President George W. Bush in 2001, an accounting quirk in his package of tax cuts. Although Democrats pledged to close that gap and reinstate a tax for 2010 when they took control of Congress, they failed to reach an agreement last December. The Senate Finance Committee is now trying to forge a compromise that would reinstate the tax, but even if that effort succeeds, it is unclear whether any changes might be retroactive and applied to those who have died so far in 2010.
The situation does present some potentially macabre estate planning strategies, however. Let's face it, families stand to make a lot more money if their rich relatives die before the end of this year. Do you think more people will be telling Grandpa to walk towards the light?
In any case, it tickled me to no end that the Duncan estate gets to keep all the money Dan created from nothing. It is good, it is just, and it is deserved. And I hope the bilious losers in Washington choke on their outrage.
Good guys win every once in a while...
When someone dies: the government should just leave the grieving family alone. Typical of governments to steal inheritance that has, as you said, already been taxed heavily.
Seriously. Greedy bastards
haha, liked this "Do you think more people will be telling Grandpa to walk towards the light?"
A whole year of missed revenue? What percent of tax revenue is estate tax. I have to imagine that is going to do some damage to the budget. Maybe the effective lower taxes will pump some more life into this economy.
THIS IS AN OUTRAGE!!!
I'm entitled to the wealth that man generated!! So are you and all the other unrelated strangers the government will "help" with that money!! I'm calling bullshit on this one!
Now who's a good lawyer that can get me money I didn't earn from people who have done me no harm? Anyone know a guy for this stuff? Give me a call. 555 YES WECN
Estate tax revenue totals about $25 billion a year, so Duncan would have made up about 20% of the entire nation's estate tax burden.
The estate tax has more to do with trying to prevent or lessen the Paris Hilton effect, super lazy and super rich spoiled brats. I believe Bill Gates suMmed it up by saying he wants to give his children enough so try can do whatever they want, but not so much so that they don't have to do anything.
Never been a fan of the estate tax myself, given the double dip taxation that it implies. I always thought it totally bizarre that 2010 is an "estate tax holiday", but if they try to reinstate the tax and make the changes retroactive, I'd scream bloody murder if I were Duncan's heirs. Not only it is that an ex post facto change, you could argue that it's a bill of attainder as well - specifically targeting those who died in 2010 (if not Duncan specifically).
It's really a shame that we even allow things like this to be considered in America today. We have a constitution for a reason, and it ought to be respected more than public, populist outrage and political posturing.
Estate taxes are essentially retroactive taxes that simply aren't collected till your death, given you have an estate wealth above a certain level. The reason more people don't cry about it, is they never experience it. Tax the rich, supposedly give to the poor, and spend it somewhere in the middle on government self-enrichment programs.
-N.
There is one little quirk to the estate tax this year though. In 2010, anything inherited won't be "stepped-up" to its market value. In all previous years, you're taxed the 45%, but the rest of your assets are stepped-up to market value. In the event you have to sell assets to break up the estate, you wouldn't be taxed on the capital gains. However, this year the gov't will eventually see some of this tax come back their way, just in the form of LT capital gains, which luckily is much lower than the current 45% (and 55% go forward) estate tax rate. In the end, the gov't won't go home entirely empty handed this year.
.. you guys ever hear of nepotism? kind of sucks
Welcome to America. A nation who used to be able small government and anti tax that has become a nation of huge government that taxes your fucking life away.
Occaecati ex blanditiis velit officia aut nesciunt animi perferendis. Aut explicabo mollitia ipsa a sequi nulla qui omnis. Magnam vel distinctio voluptates aut porro.
Aperiam consequuntur et ad sed molestias in quasi. Sint quae nisi et. Dolore quibusdam autem eum sunt. Excepturi suscipit ut fugiat corrupti est vel.
Recusandae est nihil quia at. Consequatur nemo sint ab quas. Consectetur nam placeat error nesciunt. Accusamus temporibus modi incidunt itaque natus ut quae. Voluptatum non rerum dignissimos sed.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...