From the desk of Winks.


From the "bet you didn't know this" file:  Late last year Washington passed "The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010", better known as the big fight over the expiring Bush tax cuts and the re-instatement of UI for another year.  What they didn't tell us is that the law also includes a sunset provision on the death tax that is especially harsh on the heirs of families who inherit an estate, which is very often a family business.  This was part of the trade-off brokered by the big spenders in the White House and on Capitol Hill.

Seems that the ever-greedy tax and spend liberals, who have always hated the estate tax exemption, managed to all but kill it in two years from now.  Currently, the exemption is $5 million with a $5 million portability provision that exempts assets inherited by a spouse, effectively shielding $10 million of assets from the death tax.  After the exemptions, the top rate is 35% on the balance.  With the new law, the exemption is reduced to $1 million and the top rate explodes to 55%!  In addition, the portability provision disappears altogether. 

So here's the scenario:  A man starts his business in his 30's and retires after 30 years, but makes the assets part of his estate instead of transferring them to his kids at retirement.  When he dies, after paying income taxes, sales taxes, employment taxes, personal property taxes, and real estate taxes, now the government takes up to 55% of value of the business assets, as if all the taxes paid over a lifetime just wasn't quite enough.  I mean, really.  Is that not the ultimate poke at an entrepreneur, who built a business that provided for his family and created wealth for a community?  Oh, but it gets worse.  If managed well, business assets include minimal cash because good business managers make sure any excess cash gets invested.  So the heirs inherit assets comprised of buildings, land, equipment, inventory, etc., but have to come up with the cash to pay the taxes.  Does that not sound like a huge disincentive for the new business owners?  Might they be money ahead to simply cash out the business, pay the taxes, and take whatever is left for other pursuits?  (Keep in mind that this course of action may very well include layoffs.)  And for the final kicker:  The law's provisions take effect on (drumroll here):  January 1, 2013.  How conveeeenient.

Now, tomorrow night, Obama is going to prattle on about what he's going to do to gun the economy and create jobs.  Listen close for how many times the words "entrepreneur" and "small business" are used in his speech.  He's also going to talk about even more spending for infrastructure, education, and research, while at the same time tackling the deficit and the debt.  Well where is that money going to come from?  If not more debt, it will have to come from taxes since he is not going to propose any meaningful cuts.  Reason being a diehard liberal like Obama knows only one thing:  grow the government by higher taxes and more spending, the very anti-thesis of organic economic growth.  

Don't listen to what he says.  Watch what he does.  Then vote him out.