So, we've protected all those "farm families" who were supposedly going to "lose their family farm" if we didn't repeal the Estate..er.."Death" Tax on America's UberWealthy. For the most part, the super rich will be free from paying for the costs of the War on Terror. We'll only tax the daylights out of wages, not wealth.
But what the Bushies and the "(Judith) Miller Lite" media didn't tell America was that while the neocons were lying us into a war and protecting the pocketbooks of The Elite Base from the IRS, they were also putting in place a new kind of "stealh tax" on the working and middle class. You won't see it coming. And you won't know what hit you. But you're gonna get body slammed as soon as Grandma dies.
One of the very best means America had for taking a nation of poor, uneducated immigrant ditch diggers from the the shores of Ellis Island into the comfort of modern day suburbia was something called the "step-up at death". And the oligarchs in the Bush Administration have killed it without you even noticing. It's going to end up costing you and your children a fortune in taxes.
Normally, when you sell a stock, you subtract the cost of what you paid for it from the sales proceeds; then, you're taxed on the gain. But when you inherit stock, you used to get a big tax break -- until the Busies killed it.
Let's say your grandfather worked for Quaker Oats in the mill and that he retired in 1975. During his 30 years with the company, he put a little money aside each week and bought stock in Quaker Oats. So, assume he had 500 shares of Quaker Oats stock as of 1975 and that his total cost of those shares was $7,500.
Grandpa dies this year and leaves all the shares he has in Quaker Oats to you, his grandchild. Because of stock splits, and Grandpa's wise decision to reinvest all his dividends over the 30 years since he retired, you now have 3,000 shares of not Quaker Oats, but of PepsiCo, the company that now owns the old Quaker Oats company. Your 3,000 shares is now worth $180,000!!! WAY TO GO GRANDPA!!! Grandpa has funded his great-grandchild's college tuition.
Under the old rules that the Bushies changed, when you went to sell Grandpa's shares to fund your college tuition, you got a freebie -- you, as the heir, could value your "cost" of the stock at the date grandpa died. (It was a simple and practical rule...who the heck knew what grandpa paid for all those shares he acquired from 1945 to 1975??? But you could easily determine how much Grandpa's stock was worth when he died.) If you sold the stock shortly after you acquired it, you had virtually no gain because your "cost" -- the fair market value of the stock when Grandpa died -- IS the fair market value! No gain; no tax! Grandpa's gift comes to you free of tax. And, because Grandpa's estate is so small -- he was a working guy, after all -- you don't pay estate tax, either.
That's how things used to work. Easy. Practical. And probably the single most effective tool we had in this country to build a middle class. Wealth built on the sweat of the brow and backs of hard-working parents and grandparents were passed from generation to generation, virtually tax free. Savings and investment in long-term industries was encouraged because even a poor illiterate laborer could understand that if you saved your money and bought a stock, you could give it to your kids or grandkids.
But all that has changed, thanks to the Bushies. These neocons who desecrate the memory of great conservatives who promised to "get the government off the backs" of the American people have put it back on, worse than ever. Now, when grandpa dies, you WILL have to look up those 60 year old tax records to figure out what Grandpa paid. BECAUSE YOU'RE GOING TO BE TAXED ON ALL THE GAIN, FROM EVERY SHARE GRANDPA PURCHASED -- USING GRANDPA'S ORIGINAL COST!!!!
That's right: in order to eliminate the Estate tax, the Bush Administration did away with the step-up at death. When you go to sell Grandpa's shares, YOU are liable for the capital gains tax.
Who gets hit by the repeal of this very old, tried and true section of the tax law? Well, it ain't the rich...they rarely have to sell their shares.
But if you have a kid going to college, or you want to use your inheritance to buy your first home...well, you're gonna get taxed. Hard.
And the one thing that has worked for generations of Americans to transfer hard-earned wealth from generation to generation has been killed...for the benefit of the wealthy.
50 years from now, when they write the history of how the democratic republic of the United States became an autocratic state with an hour-glass socio-economic structure with nobody in the middle --- like Argentina --- we may well look back and realize, finally, that this was the single, seismic event in our history that changed the dream of America forever.
Republican? My ass!!! George W. Bush is a plutocrat. Nothing more.