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Friday, November 12, 2010

LYNN BERGMAN: 2011 DEATH TAX – “10% GROUND RENT” OR “60% LEGAL PLUNDER”

The Inheritance Tax, which was set at 0% for year 2010, is scheduled, in year 2011, to range from 18% (under $10,000) to 55% (over $3 Million) with an additional 5% on the amount over $10 Million. That means an effective 60% tax on estates over $10 Million, which would include many, if not most, farms and other family owned businesses in North Dakota

 

Intent of a Founder

 

Thomas Paine, in “Agrarian Justice”, outlined a plan for meliorating the condition of man by creating a national fund to pay every person, when arrived at the age of conscription, the sum of 15 pounds ($24.31) to financially enable each person to begin the world! And also, 10 pounds ($16.21) per annum during the “winter” of life to every person beginning at the age of 50 years (10 years beyond the average lifespan of 40 years) to enable them to live in old age without wretchedness, and to go decently out of the world.

 

Paine’s Logic for a 10% Estate Tax

 

The earth, in its natural uncultivated state was, and ever would have continued to be, the common property of the human race. Native Americans and other cultures continue to respect this common ownership of the natural world. It is impossible, however, to separate the improvements made by cultivation (and other “improvements” of man) from the earth itself, upon which that improvement is made. It is the value of improvements only, and not the earth itself, that represents “individual property”. Every proprietor, therefore, of cultivated (or otherwise improved) land, owes to the community a “ground rent” (for lack of a better term to express the idea) for the land held; and it is from this “ground rent” that the fund proposed in Paine’s plan is to originate. Paine believed that the value of the natural inheritance… in fair justice…cannot be taken at less, and ought not to be taken for more, than a tenth part.

 

Update to Year 2009

 

Life expectancy has roughly doubled between the early years of our democratic republic and the 24 Dollars and 31 cents (15 pounds sterling) is worth $303.97 today. Likewise the 16 Dollars and 21 cents (10 pounds sterling) is worth about $202.69 today. So the plan outlined in “Agrarian Justice”, a rather modest proposal in comparison to “Social Security”, would today provide every U.S. citizen a sum of $304 with which to begin their adult life and $203 per year beginning at age 90 (ten years after the current life expectancy that approaches eighty years). When Paine formulated this plan, neither the industrial revolution nor the technical revolution had taken place; so a considerable increase in value of the “natural inheritance” is appropriate, likely on the order of a one hundred fold increase to $30,400 lump sum at Age 21 and $20,300 per year beginning at age 90.

 

Commentary

 

Reduction of the death tax to 10% or less would allow most, if not all, enterprises to be passed on to heirs without dissolution of the business to pay for the “natural inheritance”.

 

The status quo (18% to 60% death tax, depending on amount of estate), the law that takes affect on January 1, 2011, is totally unacceptable. It amounts to a confiscatory “Legal Plunder”.

 

Along with a death tax set at 10% or less, “social security” should be reformed to become a “needs based” entitlement benefit only. The two issues are “married” by Paine’s logic in Agrarian Justice. The tax should be actuarially equated with the benefit.

 

As a social security recipient, I would welcome a “needs based” monthly check in return for a maximum 10% tax on my estate in the future.

 

Unfortunately, too many “lawmakers” today are not content with society’s correct role in providing a “voluntary safety net” to deal with the unfortunate. It is much too convenient and self-serving to re-election to involve “government” in the consideration of the poor and downtrodden, what has proven to be a very “slippery slope”. Factually, the economic survival of America is in jeopardy if we do not abandon this wrong headed confusion between “society” and “government”. Tithes do not equate with taxes and philanthropy does not equate with federal entitlement programs; in each case the former is voluntary, the latter involuntary and confiscatory.

 

Paine’s words… on the Difference Between “Society” and “Government”

Some writers have so confounded “Society” with “Government”, as to leave little or no distinction between them; whereas they are not only different, but have different origins.

Society is produce by our wants, and government by our wickedness; the former promotes our happiness positively by uniting our affections, the latter negatively by restraining our vices. The one encourages intercourse, the other creates distinctions. The first is a patron, the last a punisher.

Society in every state is a blessing, bur Government, even in its best state, is but a necessary evil; in its worst state an intolerable one; for when we suffer, or are exposed to the same miseries by a Government, which we might expect in a country without government, our calamity is heightened by reflecting that we furnish the means by which we suffer.

The “Design” and “End” of Government

Here then is the origin and rise of government; namely, a mode rendered necessary by the inability of moral virtue to govern the world; here too is the design and end of government, FREEDOM AND SECURITY. To unite the sinews of commerce and defense is sound policy; for when our strength and our riches play into each other’s hands, we need fear no external enemy.

Wherefore, security being the true design and end of government, it unanswerably follows that whatever form thereof appears most likely to ensure it to us, with the least expense and greatest benefit, is preferable to all others. And a government which cannot preserve the peace is no government at all, and in that case we pay our money for nothing…

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Comments

10% Inheritance Tax is the MAXIMUM Americans should tolerate…Tell Hoeven, Conrad, and Berg NOW…TODAY!They all answer to YOU, the voter!

Lynn Bergman on November 22, 2010 at 12:48 pm
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