Lots Of Life In The Death Tax Debate He Knows Firsthand
To The Editor:
This morning as I write this, my thoughts are not very organized as my family grieves the death of my father, but I hope you understand my point.
I talk with the sons and daughters and key persons of deceased small business owners from time to time: printing, plumbing, welding, retail and so many other small businesses that have been mercilessly attacked by the IRS, leaving the businesses bankrupt and the possible future owners of those businesses, the children of the deceased, with nothing left to do but weep and find themselves in poverty and humiliation. The employees of those businesses, if only a few, are also jobless.
Now they could have bought life insurance to pay those taxes. How convenient for us agents. However, these are not wealthy people. They are middle-income families living off $40,000 to $80,000 per year. The IRS simply says the business is worth enough to taxtherefore pay up.
You should know well that it takes a lot of capital, buildings, service or farm property to generate a livable income. The heirs can hire the attorneys at a high cost to prove the IRS is wrong or just tell the IRS, OK, you win, we lose.
I know firsthand what they are dealing with. My dad, a small business owner, died last week and the grieving is tempered by the thought of dealing with the IRS. Oh yeah, my Dad has been uninsurable or so highly rated for the last 20 years that we couldnt afford the premium to pay the death tax.
The truly wealthy have no problem paying the premiums and sometimes get a thrill from this type of planning and premium paying as if it were a big game. I hope these are the ones your column (see The Editor’s Edge, May 10, 2004) refers to. Not so with the rest of us who might fall into the lower end of the death tax scale.
So, when you talk about me and my Republican friends who are opposed to the death tax, I simply ask for a little mercy and clarification. Your sarcasm is noted. I also challenge you to examine your own practical experience and knowledge, because you obviously have no idea how far removed you are from the ones the death tax really destroys.
Donald G. Holmes
To The Editor:
Thank you for your May 10 column on the “Death Tax.” I’m sure your recent editorials are earning you some colorful correspondence! I just want to express appreciation for the fact that someone in your position in our industry can see past what has become received wisdom and economic orthodoxy.
I most often have to read trade journals with my nose pluggedI need the information. Coming from someone like me, it might not mean much, but I’m just as committed to a healthy insurance business as anybody.
A Massachusetts Democrat
Robin Hood Economics
To The Editor:
Somehow this position of preserving the estate tax but only on 1% of the population irritates those of us who are really against the tax. You seem to justify the tax by saying if we steal from only the 1% of the population and give to 50% of the population we are good people. Robin Hood economics didn’t work in the Soviet Union and won’t work long anywhere.
Yes, we greatly overspend our national budget. Yes, it puts a burden on our children! Yes, we should balance our budget every year.
Maybe a fairer way would be a head taxeveryone pays $3,000 each year and then everyone is really taxed equally. Everyone enjoys the same military, highways, schools, etc.
The real base problem is that we as a nation have bought into the Marxist philosophy of “from each according to his ability to each according to his need.” The problem is that it doesn’t work now and it never has or will work. Poverty ensues!
The estate tax is a huge example of the above paragraph. It is a bad testimony that we in the life insurance industry who serve our clients are in favor of this tax. Our clients aren’t!
My hope is that more in our industry will take the position for the elimination of any estate or gift tax! We only appear to be serving the interest of our own business to do otherwise.
Sometimes I wonder how much life insurance people would want to buy if they could leave it all to their families with no estate tax. That, plus being able to access your cash values until that time, would be attractive and responsible for our clients!
Robert M. Danner Jr., CLU, ChFC, CFP
Capitalistic, Not Socialistic
To The Editor:
Hats off to Mr. Gorenberg!!!(See Letters, May 31, 2004.) At last someone who understands that this is a capitalistic country, not socialistic.We in our industry seem to be blinded by the fact that we derive revenue from this “death tax” issue, therefore we must keep it on the books. The redistribution of wealth was not one of our founding principlesthat would be Cuba or the old USSR. It scares me that we are inching closer and closer to socialism in this country.The “death tax” is only one of the symptoms. Whats right is rightif you earn it, its yours.
Bob Proctor CLU, ChFC, CFP
Reproduced from National Underwriter Edition, June 11, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.