ABC Despairs Demise of Death Tax Means ‘Government Will Lose Billions in Revenue’
Reporter Laura Marquez, who last year expressed frustration at the difficulty of raising taxes in California, described the demise of the death tax as “a big gift from Congress” to “America's wealthiest families.” Marquez saw a loss for “all of us” who aren’t so rich as she lamented the reduction of revenue for the federal government:
Just one percent of American families are wealthy enough to pay the estate tax, but if they don't pay, it affects all of us because the federal government will lose billions of dollars in revenue. The Congressional Budget Office estimates that this year 5,500 families would have paid a total of $14 billion in estate taxes.In addition to ignoring the economic burden of the tax in draining capital from the economy, Marquez also overlooked how her one and only expert, an estate tax planner, is emblematic of the inefficiencies of a levy which has spawned an entire tax-avoidance industry.
Last May and June Marquez blamed California's budget deficit on an “unwillingness to raise taxes” tied to 1978's Proposition 13 “mandating an almost unachievable two-thirds vote by the legislature to raise taxes,” and she lamented “education and social services continue to end up on the chopping block” because “it's a lot easier to make cuts than it is to raise taxes” since Prop 13 requires “the approval of two-thirds of the legislature to raise taxes, a virtual impossibility.”
From the Saturday, January 2 World News on ABC:
JOHN BERMAN: One well-known federal law expired on New Year's Day: The estate tax. Congress let renewing the estate tax slip through the legislative cracks and gone with it is $14 billion for the U.S. Treasury. ABC's Laura Marquez has more.
ANDREW KATZENSTEIN, ESTATE TAX PLANNER: It seems to be on everybody's minds now.
LAURA MARQUEZ: Andrew Katzenstein, an estate tax planner represents some of America's wealthiest families and those families just got a big gift from Congress. Congress was too busy last year to get around to renewing the estate tax which takes a significant part of a large inheritance, so on January 1st, the tax disappeared.
KATZENSTEIN: Somebody who died this year a opposed to next year, with no change in the law, could save 60 percent of value passing to their family. It’s a huge number.
MARQUEZ: Just one percent of American families are wealthy enough to pay the estate tax, but if they don't pay, it affects all of us because the federal government will lose billions of dollars in revenue. The Congressional Budget Office estimates that this year 5,500 families would have paid a total of $14 billion in estate taxes. Congress could renew the tax this year and make it retroactive back to January 1st. But a retroactive law may not fly with the courts. In the meantime, the heirs of wealthy Americans near the end of their lives have a new dilemma.
KATZENSTEIN: If the person who has the power to pull the plug as somebody who’s going to inherit, I think that it's human nature for that to become part of the decision-making process.
MARQUEZ: Death and taxes have never been more intertwined. Laura Marquez, ABC News, Los Angeles.