The lie about the new tax credits: AMT claws them back!
Jonathan Kamens
My family income is only slightly higher than what the
Economic Policy Insitute says a family of five children needs
to function where we live. We are soundly in the middle
class, and there's nothing in our taxpayer profile which would
make us the kind of taxpayers (i.e., rich ones :-) that the
AMT was intended to prevent from avoiding their fair share of
taxes.
Nevertheless, when I worked out my 2009 taxes tentatively last
week so that I could file an accurate 2010 W-4 with my
employer, I discovered that we're going to be paying about
$1,000 extra in taxes this year because of the AMT.
How could this happen? Well, because of the Federal
government's encouragement to make energy efficiency
improvements this year, we spent a large amount of money
replacing our furnace and adding insulation to our attic and
exterior walls. Therefore, we should have been entitled to
(and were expecting) a $1,500 tax credit. In addition, we
should have received an $800 "making work pay" tax credit.
However, although those tax credits were added to the normal
tax calculations, they were not added to the AMT calculations.
As a result, as I noted above, we're losing about $1,000 of
the tax credits we were promised and expecting.
I'm sure many other families are going to be nailed by this
just as we were.
It seems to me that the folks who work out the tax numbers in
DC either (a) didn't see this coming, in which case they're
idiots, or (b) saw this coming and did nothing about it, in
which case they're liars. Either way, I'm pretty peeved about
it, as I imagine anyone would be upon discovering that they
won't be getting $1,000 they were promised.
It's not too late for Congress to fix this. Retroactive fixes
to the tax code have been made in the past, sometimes months
into the following year. If Congress is serious about these
tax credits, then they should adjust the AMT calculations to
prevent the AMT from exactly the people these credits were
intended to help.
If you agree and are willing to help spread the word (write
to your elected officials, write an op-ed column as a
qualified tax professional, etc.) I'd surely appreciate the
help. I've written to my elected officials about it and also
to a number of news media outlets in an effort to drum up
interest in covering it as a news story, but one person can
do only so much.
I've posted the letter I sent to my elected officials on my
blog at
<http://blog.kamens.brookline.ma.us/~jik/wordpress/amt>.
Comments here or there would be appreciated.
Thanks,
Jonathan Kamens
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Arthur Kamlet
Jonathan Kamens <j...@kamens.brookline.ma.us> wrote:
>
>My family income is only slightly higher than what the
>Economic Policy Insitute says a family of five children needs
>to function where we live. We are soundly in the middle
>class, and there's nothing in our taxpayer profile which would
>make us the kind of taxpayers (i.e., rich ones :-) that the
>AMT was intended to prevent from avoiding their fair share of
>taxes.
>
>Nevertheless, when I worked out my 2009 taxes tentatively last
>week so that I could file an accurate 2010 W-4 with my
>employer, I discovered that we're going to be paying about
>$1,000 extra in taxes this year because of the AMT.
>
>How could this happen? Well, because of the Federal
>government's encouragement to make energy efficiency
>improvements this year, we spent a large amount of money
>replacing our furnace and adding insulation to our attic and
>exterior walls. Therefore, we should have been entitled to
>(and were expecting) a $1,500 tax credit. In addition, we
>should have received an $800 "making work pay" tax credit.
Seems the hybrid car manufacturers successfully lobbied that credit
out of AMT, and so did the solar energy manufacturers.
http://www.irs.gov/newsroom/article/0,,id=206871,00.html
http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=US02F
http://archives.chicagotribune.com/2009/sep/20/business/chi-tc-ym-biz-marksjarvis-0920sep20
So where were the HVAC, heating and air conditioning manufacturers?
When you look at how Congress manages to very suddenly slip those
lobbyists AMT favors, but not the HVAC manufacturers, you begin to
wonder who wasn't willing to pony up at the congressional bar?
>However, although those tax credits were added to the normal
>tax calculations, they were not added to the AMT calculations.
>As a result, as I noted above, we're losing about $1,000 of
>the tax credits we were promised and expecting.
>
>I'm sure many other families are going to be nailed by this
>just as we were.
>
>It seems to me that the folks who work out the tax numbers in
>DC either (a) didn't see this coming, in which case they're
>idiots, or (b) saw this coming and did nothing about it, in
>which case they're liars. Either way, I'm pretty peeved about
>it, as I imagine anyone would be upon discovering that they
>won't be getting $1,000 they were promised.
>
>It's not too late for Congress to fix this. Retroactive fixes
>to the tax code have been made in the past, sometimes months
>into the following year. If Congress is serious about these
>tax credits, then they should adjust the AMT calculations to
>prevent the AMT from exactly the people these credits were
>intended to help.
Again, given that the hybrid car credit and the solar energy
credits are both applicable even for AMT, but the other
nonbusiness energy credit is not, it doesn't look like an
accident.
>to your elected officials, write an op-ed column as a
>qualified tax professional, etc.) I'd surely appreciate the
>help. I've written to my elected officials about it and also
>to a number of news media outlets in an effort to drum up
>interest in covering it as a news story, but one person can
>do only so much.
>
>I've posted the letter I sent to my elected officials on my
>blog at
><http://blog.kamens.brookline.ma.us/~jik/wordpress/amt>.
>Comments here or there would be appreciated.
--
ArtKamlet at a o l dot c o m Columbus OH K2PZH
Jonathan Kamens
find any reference to how to include the hybrid vehicle or
solar energy credits when calculating AMT.
I'm not sure, but I think these may only apply when the
credits are taken by a business rather than an individual.
If I'm wrong, somebody please point me at the part of the
form / its instructions that I'm missing ;-).
Thanks.
Jonathan Kamens
Congress exempts from the AMT two tax credits which are more
likely to be taken advantage of by wealthier people, since
they involve higher expenditures, while not exempting from
the AMT tax credits which are more likely to be taken
advantage of by less wealthy people.
And the AMT was intended primarily to apply to wealthier
people.
And this makes sense how, exactly?
Alan
third paragraph that confuses me as energy efficient improvements
don't cause AMT nor do they cause a tax liability. So I will
assume, your reference to how this could happen is referring to a
tax liability that surprised you given that you thought certain
tax credits (both nonrefundable and refundable) would generate a
larger tax benefit than your numbers portray.
So.. something similar to what is below must have happened:
1. Either you were not subject to the AMT in 2008 and are now
shocked to discover that you are subject to the AMT in 2009 and
that the amount of aggregate credits is limited by the special
rule of Sec. 26(a)(2) as amended by ARRA. In other words, you
don't get the full benefit of all tax credits.
Or...
2. You were subject to AMT in 2008, anticipated AMT in 2009 but
overlooked the fact that many credits are limited by the special
rule and that ARRA did not make any exception in the AMT special
rule for the Make Work Pay and Energy Efficient tax credits.
If you were subject to AMT in 2008 you and or your tax preparer
should have been aware of the special rule that limits tax
credits. If you were not subject to AMT in 2008 and you are in
2009, then obviously something changed to trigger the AMT and you
are now discovering the special rule that limits credits.
As to the folks in D.C., the ones involved in drafting the tax
legislation were certainly aware of the AMT implications as AMT
has had to be patched every year. ARRA contains two patches for
tax year 2009. (Extending special rule to 2009 and increasing the
exemption.) They are also aware of the special rule as they
continually draft legislation making certain tax credits exempt
from the rule as Art Kamlet pointed out in his reply to your post.
I certainly understand your disgust with losing out on certain
tax benefits that will probably cost you a $1000. The history of
tax benefits in new tax legislation has always been blown out of
proportion by the media and the Congressional sponsors. They are
all aware of the AMT and how it impacts and limits certain tax
benefits to certain taxpayers. The lesson here is to always crawl
through the numbers and literature to see who does not benefit.
E.g., the information on the Make Work Pay credit always said it
lowers taxes for 95% of working Americans. No one ever asks: Who
are the other 5%?
Just think what your tax bill would have been if ARRA hadn't
extended the special rule to 2009 and increased the exemption amount.
Mark Bole
> Hmm. I searched Form 6251 and its instructions, and I can't
> find any reference to how to include the hybrid vehicle or
> solar energy credits when calculating AMT.
The interaction between credits and AMT is usually found not on the AMT
form, but rather on the individual credit forms, for example Line 16 of
2008 Form 8910.
-Mark Bole
Don Priebe
>> should have received an $800 "making work pay" tax credit.
The "making work pay" credit is a totally refundible credit for both regular
taxes and for the AMT. So it is not affected by the AMT at all. It is
however phased out for higher income taxpayers (over $150K AGI),
disappearing entirely for AGIs over $190K MFJ. See your Schedule M.
--
Don EA in Upstate NY
Jonathan Kamens
>I'm kind of lost by your reasoning...
As was I, it turns out.
It appears I was mistaken when I concluded that it was new tax
credits -- making work pay and energy efficiency -- that
prompted me to be subject to the AMT.
Spurred by your posting, I went back to my return and, as a
test case, removed the energy efficiency and making work pay
credits ($1,500 + $800) by zeroing out Form 5695 and Schedule
M. My total tax immediately jumped by $2,300. So,
apparently, these two tax credits *are* allowable under the
AMT. If they weren't, then my tax due would have jumped by
only $1,300 ($2,300 less the $1,000 in AMT I had owed).
I had concluded otherwise through carelessness. I had assumed
that if the relevant tax credits offset the AMT, they would
show up on Form 6251. I suspect this was an artifact of my
memory of previous years' 1040 forms, where the AMT was pretty
much the last thing on the form. Apparently, the "special
rule" to which you referred prompted the IRS to reorder Form
1040 so that certain tax credits were applied after the AMT
was calculated. Either that, or things were always that way
and I was confused.
It would seem that my complaint is not with Congress's
handling of these two credits in particular, but rather with
the AMT in general. Even with this year's "patch," I am still
being impacted by the AMT, even though I am not in an income
bracket that the AMT was intended to impact (at least, not in
my opinion; perhaps the Federal government disagrees!).
That's highly suboptimal.
Seth
Jonathan Kamens <j...@kamens.brookline.ma.us> wrote:
>So let me see if I've got this straight...
>
>Congress exempts from the AMT two tax credits which are more
>likely to be taken advantage of by wealthier people, since
>they involve higher expenditures, while not exempting from
>the AMT tax credits which are more likely to be taken
>advantage of by less wealthy people.
>
>And the AMT was intended primarily to apply to wealthier
>people.
>
>And this makes sense how, exactly?
Congress gives better benefits to people who (are more likely to)
bribe it.
Seth
Mark Bole
> My family income is only slightly higher than what the
> Economic Policy Insitute says a family of five children needs
> to function where we live. We are soundly in the middle
> class, and there's nothing in our taxpayer profile which would
> make us the kind of taxpayers (i.e., rich ones :-) that the
> AMT was intended to prevent from avoiding their fair share of
> taxes.
I presume your family has two adults also? (see next comment)
> Spurred by your posting, I went back to my return and, as a
> test case, removed the energy efficiency and making work pay
> credits ($1,500 + $800) by zeroing out Form 5695 and Schedule
> M. My total tax immediately jumped by $2,300.
Now, as another test case, try removing 4 of your children. Did that
make the AMT go away? Probably, although your total tax liability also
probably went up.
> It would seem that my complaint is not with Congress's
> handling of these two credits in particular, but rather with
> the AMT in general. Even with this year's "patch," I am still
> being impacted by the AMT, even though I am not in an income
> bracket that the AMT was intended to impact (at least, not in
> my opinion; perhaps the Federal government disagrees!).
Despite popular misconception about being "hit" by the AMT (a phrase
that bugs me; as if it's somehow different from being hit by regular
tax), it's not based on your income level. It's possible to be at a
very high income level and still not owe any tax due to AMT. The actual
AMT marginal tax rates are quite a bit below the top regular tax rates.
Rather, it is based on not allowing certain deductions and exemptions.
In your case, assuming (from your email address) that you pay a
non-trivial state income tax (MA), probably a hefty property tax that's
been steadily increasing according to news reports, and have five kids,
it's those things primarily that are driving AMT liability.
None of which make anyone feel any better about it, of course.
The unfairness of it all can work in the other direction, too. I have a
client, also with 5 kids and what I would consider solidly middle-class
income and wealth, who quit his salaried job a few years ago to start a
business late in the year. Not surprisingly, the business had a modest
loss that first year, but still nowhere near enough to offset his salary
from the first part of the year. However, a previously unallowed
passive loss carryover from rental property brought his income down low
enough so that not only didn't he owe any tax, but he actually got over
$4K from the government as a welfare payment (additional child tax credit).
-Mark Bole
Salmon Egg
Problems with AMT and other inane aspects of the Federal tax code would
be greatly diminished if Congress people had to fill out their own tax
returns without professional help. While I do not see Congress doing
their own tax preparation soon, I would sure like to know which members
of Congress do indeed fill out their own returns.
If push came to shove, I would be more likely to vote for one who does,
presuming he/she is not a CPA or the like.
Is there any way of finding out such information?
Bill
--
An old man would be better off never having been born.
Jonathan Kamens
>Rather, it is based on not allowing certain deductions and exemptions.
>In your case, assuming (from your email address) that you pay a
>non-trivial state income tax (MA), probably a hefty property tax that's
>been steadily increasing according to news reports, and have five kids,
>it's those things primarily that are driving AMT liability.
(Point of information: I live in Brighton, not tony Brookline,
despite the holdover email address. My property taxes, while
not as low as they could be, aren't nearly as high as you
might have thought.)
Those, and the fact that I made the "mistake" of giving a few
thousand dollars to charity (under 2% of my gross income,
which alas is all I could afford) this year. While the
charitable donation deduction is a fringe benefit and not my
primary reason for giving, the point of the deduction is to
encourage people to give, and I'm not exactly encouraged by
the knowledge that if I had given $0 to charity in 2009, my
tax liability would be exactly the same.
If the purpose of the AMT is to collect taxes from people who
are using tax dodges to avoid paying their fair share, then
why is it structured in such a way that someone with a
middle-class income, who pays a corresponding amount of state
income tax and a relatively low property tax (we are NOT
living in a mansion, believe me), gives little to charity, and
takes only the number of dependent exemptions to which he is
entitled, still ends up paying AMT?
Does anybody think this is the way things are supposed to
work? If not, then why hasn't Congress fixed it for real?
Barry Margolin
j...@kamens.brookline.ma.us (Jonathan Kamens) wrote:
> If the purpose of the AMT is to collect taxes from people who
> are using tax dodges to avoid paying their fair share, then
> why is it structured in such a way that someone with a
> middle-class income, who pays a corresponding amount of state
> income tax and a relatively low property tax (we are NOT
> living in a mansion, believe me), gives little to charity, and
> takes only the number of dependent exemptions to which he is
> entitled, still ends up paying AMT?
>
> Does anybody think this is the way things are supposed to
> work? If not, then why hasn't Congress fixed it for real?
Isn't a big part of the problem that AMT hasn't been indexed to
inflation? So while AMT originally was intended to hit wealthy
taxpayers, the middle class has slowly creeped into that income level.
There's a similar problem with the estate tax. It was targeted at
millionaires, but middle class families that invest wisely can easily
fall into it. But I think Congress has recently bumped up the size of
the estate that it applies to.
--
Barry Margolin, bar...@alum.mit.edu
Arlington, MA
*** PLEASE don't copy me on replies, I'll read them in the group ***
John Levine
>millionaires, but middle class families that invest wisely can easily
>fall into it. But I think Congress has recently bumped up the size
>of the estate that it applies to.
The current estate tax, aka the "throw momma from the train" tax, has
a one year rate of zero in 2010. Unless Congress does something, in
2011 the exemption returns to $1M per person, or $2M for a married
couple who do some tax planning, with a rate of 45% above that.
There's a variety of bills in Congress, most likely one returning the
exclusion to the 2009 amounts of $3.5M per person or $7M per couple,
and 45% of estates above that, or if the Republicans get their way
$5M/$10M and 35%. I dunno about you, but I think anyone with $7M in
assets is pretty rich and $10M is quite rich. Remember that there is
a basis step-up, so that for assets passed to heirs and later sold,
they only pay capital gains tax on gains above the value at the time
of death.
The 2010 repeal also repeals the step-up, so estates are treated as
gifts to the heirs, who might end up owing more in taxes due to gift
tax or capital gains on appreciated assets.
There are some fairly screwed up taxes in this country, but assuming
the Congress does what seems likely, the estate tax is not one of
them.
R's,
John
PS: If someone proposes to trot out the selling the family farm
argument, I'd be interested to hear of any verified cases of a family
farm that was actually sold to pay estate taxes, as opposed to sold
because the heirs didn't want to be farmers.
Seth
Mark Bole <ma...@pacbell.net> wrote:
> The actual
>AMT marginal tax rates are quite a bit below the top regular tax rates.
The actual AMT marginal tax rate reaches 35%, not that much below the
top regular tax rate for a taxpayer in a high-income-tax state.
Seth
Mark Bole
> In article <hhbbav$25n$1...@news.eternal-september.org>,
> Mark Bole <ma...@pacbell.net> wrote:
>
>> The actual
>> AMT marginal tax rates are quite a bit below the top regular tax rates.
>
> The actual AMT marginal tax rate reaches 35%, not that much below the
> top regular tax rate for a taxpayer in a high-income-tax state.
As I suspect you know, it's all in one's definitions. Many believe in
using a so-called "phantom" tax rate which is not only the actual tax
rate but takes into account various limitations on deductions, lost
credits, inclusions of otherwise untaxed income, etc.
In fact, the AMT itself is an example of such a "phantom" tax.
So yes, there is the matter of the AMT exemption phase-out over a
certain income range. Really, it's not an apples-to-apples comparison,
since for regular tax, taxable income is determined *after* applying
deductions and exemptions, while AMTI is determined *before* applying
the exemption.
Perhaps we agree that by incorporating a lot of "slop" into the lower
end of the tax system (gross income vs. taxable income), lawmakers can
easily adjust total taxes paid without technically changing the
statutory rate.
-Mark Bole
Mark Bole
>
> Those, and the fact that I made the "mistake" of giving a few
> thousand dollars to charity (under 2% of my gross income,
> which alas is all I could afford) this year. While the
> charitable donation deduction is a fringe benefit and not my
> primary reason for giving, the point of the deduction is to
> encourage people to give, and I'm not exactly encouraged by
> the knowledge that if I had given $0 to charity in 2009, my
> tax liability would be exactly the same.
Charitable deductions in cash from Schedule A are fully allowed for AMT,
some donated property may have a different basis, however.
-Mark Bole
D. Stussy
news:hhbrdv$86r$1...@gal.iecc.com...
> >There's a similar problem with the estate tax. It was targeted at
> >millionaires, but middle class families that invest wisely can easily
> >fall into it. But I think Congress has recently bumped up the size
> >of the estate that it applies to.
>
> The current estate tax, aka the "throw momma from the train" tax, has
> a one year rate of zero in 2010. Unless Congress does something, in
> 2011 the exemption returns to $1M per person, or $2M for a married
> couple who do some tax planning, with a rate of 45% above that.
> There's a variety of bills in Congress, most likely one returning the
> exclusion to the 2009 amounts of $3.5M per person or $7M per couple,
> and 45% of estates above that, or if the Republicans get their way
> $5M/$10M and 35%. I dunno about you, but I think anyone with $7M in
> assets is pretty rich and $10M is quite rich. Remember that there is
> a basis step-up, so that for assets passed to heirs and later sold,
> they only pay capital gains tax on gains above the value at the time
> of death.
You obviously do not live nor own real estate in California. At the height
of real estate prices in 2006, residental properties were easily
$1,000.00/sq. ft., which means that a modest 2,000 sq. ft. house was $2M.
With the 2011 reset, a couple's home by itself would consume their entire
combined exemptions. 2,000 sq.ft. is below the median for houses out here.
Many new homes are on the order of 5,000 sq.ft. for just the ground floor.
> The 2010 repeal also repeals the step-up, so estates are treated as
> gifts to the heirs, who might end up owing more in taxes due to gift
> tax or capital gains on appreciated assets.
>
> There are some fairly screwed up taxes in this country, but assuming
> the Congress does what seems likely, the estate tax is not one of
> them.
--
Bill Brown
>
> PS: If someone proposes to trot out the selling the family farm
> argument, I'd be interested to hear of any verified cases of a family
> farm that was actually sold to pay estate taxes, as opposed to sold
> because the heirs didn't want to be farmers.
>
There are not any. Some anti-"death taxers" tried to find just such an
example a few years ago and admitted defeat. They could not fine even
one.
Seth
Mark Bole <ma...@pacbell.net> wrote:
>Seth wrote:
>> The actual AMT marginal tax rate reaches 35%, not that much below the
>> top regular tax rate for a taxpayer in a high-income-tax state.
>
>As I suspect you know, it's all in one's definitions. Many believe in
>using a so-called "phantom" tax rate which is not only the actual tax
>rate but takes into account various limitations on deductions, lost
>credits, inclusions of otherwise untaxed income, etc.
That "phantom" rate is also defined as: if you earn another $100, how
much does your tax go up? So in that sense, it's the only real tax.
>In fact, the AMT itself is an example of such a "phantom" tax.
A tax that's 10% of "adjusted income" where "adjusted income" is
defined as "4 times actual income" is a 40% tax. It's the supposed
10% that's phantom.
>So yes, there is the matter of the AMT exemption phase-out over a
>certain income range. Really, it's not an apples-to-apples comparison,
>since for regular tax, taxable income is determined *after* applying
>deductions and exemptions, while AMTI is determined *before* applying
>the exemption.
It's the marginal rate we're looking at, so "taxable income" doesn't
matter.
>Perhaps we agree that by incorporating a lot of "slop" into the lower
>end of the tax system (gross income vs. taxable income), lawmakers can
>easily adjust total taxes paid without technically changing the
>statutory rate.
They do that a lot, with varying effects.
Seth
John Levine
>You obviously do not live nor own real estate in California. At the
>height of real estate prices in 2006, residental properties were
>easily $1,000.00/sq. ft., which means that a modest 2,000
>sq. ft. house was $2M. With the 2011 reset, a couple's home by
>itself would consume their entire combined exemptions. 2,000
>sq.ft. is below the median for houses out here. Many new homes are
>on the order of 5,000 sq.ft. for just the ground floor.
According to http://www.housingtracker.net/, the median asking price
this week for houses in the S.F. area is $460K, in San Jose $479K, in
L.A. $439K, and in San Diego $386K. I do not doubt there are some
houses that would still fetch $2M, but that price was never the norm
even during the bubble and it's even farther from the norm now. See
this page which shows that even at the peak, the median price in
S.F. never exceeded $700K and the 75th percentile price was and is
always under $1M.
http://www.housingtracker.net/asking-prices/san-francisco-california/
Seven million bucks is still a lot of money, even in California.
Personally, I'm delighted that I don't own property in California. At
this point, we're trying to decide whether it would be a good idea to
pay off the remaining $49K balance on our 15 year 5.875% fixed rate
mortgage. In this economy, 5 7/8% risk free is pretty darned good.
R's,
John
PS: In case it's not obvious, the value for estate tax is the current
value, not what one might have paid three years ago when taking out an
underwater interest-only no-doc ARM mortgage.
Wallace
"Bill Brown" <bro...@longwood.edu> wrote in message
news:69583c42-c163-45dc...@v7g2000vbd.googlegroups.com...
> On Dec 28, 11:48 pm, John Levine <jo...@iecc.com> wrote:
>
>>
>> PS: If someone proposes to trot out the selling the family farm
>> argument, I'd be interested to hear of any verified cases of a family
>> farm that was actually sold to pay estate taxes, as opposed to sold
>> because the heirs didn't want to be farmers.
>>
> There are not any. Some anti-"death taxers" tried to find just such an
> example a few years ago and admitted defeat. They could not fine even
> one.
why limit this to farms? Why not any business? How many people did not
want to be farmers (or continue the other family business) burdened with the
debt needed to be taken on to pay the death tax?
Stuart A. Bronstein
> "Bill Brown" <bro...@longwood.edu> wrote
>>>
>>> PS: If someone proposes to trot out the selling the family
>>> farm argument, I'd be interested to hear of any verified cases
>>> of a family farm that was actually sold to pay estate taxes,
>>> as opposed to sold because the heirs didn't want to be
>>> farmers.
>>>
>> There are not any. Some anti-"death taxers" tried to find just
>> such an example a few years ago and admitted defeat. They could
>> not fine even one.
>
> why limit this to farms? Why not any business? How many people
> did not want to be farmers (or continue the other family
> business) burdened with the debt needed to be taken on to pay
> the death tax?
There are already laws that make estate taxes easier on both family
farms and other family businesses. See IRC �2057 (family businesses)
and 2032A (family farms).
--
Stu
http://downtoearthlawyer.com
dpb
> "Bill Brown" <bro...@longwood.edu> wrote in message
> news:69583c42-c163-45dc...@v7g2000vbd.googlegroups.com...
>> On Dec 28, 11:48 pm, John Levine <jo...@iecc.com> wrote:
>>
>>> PS: If someone proposes to trot out the selling the family farm
>>> argument, I'd be interested to hear of any verified cases of a family
>>> farm that was actually sold to pay estate taxes, as opposed to sold
>>> because the heirs didn't want to be farmers.
>>>
>> There are not any. Some anti-"death taxers" tried to find just such an
>> example a few years ago and admitted defeat. They could not fine even
>> one.
>
>
> why limit this to farms? Why not any business? How many people did not
> want to be farmers (or continue the other family business) burdened with the
> debt needed to be taken on to pay the death tax?
And, as a practical matter, how would one know/discover the underlying
reason(s) for a sale? It isn't part of disclosure.
I (as a farmer) certainly know of ones around here that either were sold
or were seriously hampered in operation owing to (primarily)
unexpected/early death that made it necessary to make serious
modifications in the family operation in order to retain a portion.
We're now small potatoes and have barely sufficient ground to make
farming alone a paying venture and it will still be difficult to keep
the land together in an entity. The loss of even one quarter would be
then end of it as a farming entity, undoubtedly.
--
D. Stussy
> >> I dunno about you, but I think anyone with $7M in assets is pretty
> >> rich and $10M is quite rich. ...
>
> >You obviously do not live nor own real estate in California. At the
> >height of real estate prices in 2006, residental properties were
> >easily $1,000.00/sq. ft., which means that a modest 2,000
> >sq. ft. house was $2M. With the 2011 reset, a couple's home by
> >itself would consume their entire combined exemptions. 2,000
> >sq.ft. is below the median for houses out here. Many new homes are
> >on the order of 5,000 sq.ft. for just the ground floor.
>
> According to http://www.housingtracker.net/, the median asking price
> this week for houses in the S.F. area is $460K, in San Jose $479K, in
> L.A. $439K, and in San Diego $386K. I do not doubt there are some
> houses that would still fetch $2M, but that price was never the norm
> even during the bubble and it's even farther from the norm now. See
> this page which shows that even at the peak, the median price in
> S.F. never exceeded $700K and the 75th percentile price was and is
> always under $1M.
>
> http://www.housingtracker.net/asking-prices/san-francisco-california/
>
> Seven million bucks is still a lot of money, even in California.
>
> Personally, I'm delighted that I don't own property in California. At
> this point, we're trying to decide whether it would be a good idea to
> pay off the remaining $49K balance on our 15 year 5.875% fixed rate
> mortgage. In this economy, 5 7/8% risk free is pretty darned good.
The problem is that those surveys include houses "in the 'hoods" which are
vacant, torched, rentals, and/or gang/illegal-alien-invested; places that
no on really wants to live. Meanwhile, what I quoted is for places where
people do want to live. In my neighborhood, about 50% of the current
owners bought in the 1950's, back before relative house values were much
different from the Los Angeles citywide average. I'm not talking about
affluent or rich neighborhoods, but middle-class. Lastly, those are
current surveys - which are 15-60% lower than 2006 prices depending on the
region. (I have seen some regions fall only 15% while others have more
than halved.)
Meanwhile, the same size place in the middle of Missouri (e.g.) would be
only $100k or less; the only difference being location.
My point: What may be reasonable for some regions of the country are not
reasonable for other regions, and California has 10%+ of our country's
population, so it's a significant region.
Mortgages in my area are about 4%. You should refinance if possible.
removep...@yahoo.com
wrote:
> "Wallace" <pleasenos...@microsoft.com> wrote:>
> > "Bill Brown" <brow...@longwood.edu> wrote
> >> John Levine <jo...@iecc.com> wrote:
> >>> PS: If someone proposes to trot out the selling the family
> >>> farm argument, I'd be interested to hear of any verified cases
> >>> of a family farm that was actually sold to payestatetaxes,
> >>> as opposed to sold because the heirs didn't want to be
> >>> farmers.
>
> >> There are not any. Some anti-"death taxers" tried to find just
> >> such an example a few years ago and admitted defeat. They could
> >> not fine even one.
>
> > why limit this to farms? �Why not any business? �How many people
> > did not want to be farmers (or continue the other family
> > business) burdened with the debt needed to be taken on to pay
> > the deathtax?
>
> There are already laws that makeestatetaxes easier on both family
> farms and other family businesses. �See IRC �2057 (family businesses)
> and 2032A (family farms).
IRC 2057 seems to increase the estate exemption by an additional 625k,
but only if over half the estate is a family business. Is that about
right?
IRC 2032A seems to allow you to value your estate at less than FMV
using a complicated formula.
Is this about right?
John Levine
>vacant, torched, rentals, and/or gang/illegal-alien-invested; places that
>no on really wants to live. Meanwhile, what I quoted is for places where
>people do want to live.
Um, not to put too fine a point on it, I've offered statistics that at
least 75% of houses offered for sale in major metro areas in
California have been priced under $900K, even at the height of the
bubble, and you seem to be saying that your neighbors thought their
houses were worth $2M at the bubble's peak. Somehow that doesn't seem
like a compelling basis on which to make tax policy.
>Mortgages in my area are about 4%. You should refinance if possible.
Around here (where we didn't have a price bubble because the banks
have a quaint policy that they only offer mortgages to people who are
likely to be able to pay them off) the APR is 4.66% for 15 year fixed.
You can only get 4% on a three year ARM which doesn't strike me as a
great plan. And anyway, for only $49K, the transaction fees would eat
up any possible interest savings.
R's,
John
removep...@yahoo.com
wrote:
> "John Levine" <jo...@iecc.com> wrote in message
> > The current state tax, aka the "throw momma from the train"tax, has
> > a one year rate of zero in 2010. �Unless Congress does something, in
> > 2011 the exemption returns to $1M per person, or $2M for a married
> > couple who do some tax planning, with a rate of 45% above that.
> > There's a variety of bills in Congress, most likely one returning the
> > exclusion to the 2009 amounts of $3.5M per person or $7M per couple,
> > and 45% of estates above that, or if the Republicans get their way
> > $5M/$10M and 35%. �I dunno about you, but I think anyone with $7M in
> > assets is pretty rich and $10M is quite rich. �Remember that there is
> > a basis step-up, so that for assets passed to heirs and later sold,
> > they only pay capital gains tax on gains above the value at the time
> > of death.
>
> You obviously do not live nor own real estate in California. �At the height
> of real estate prices in 2006, residential properties were easily
> $1,000.00/sq. ft., which means that a modest 2,000 sq. ft. house was $2M.
> With the 2011 reset, a couple's home by itself would consume their entire
> combined exemptions. �2,000 sq.ft. is below the median for houses out here.
> Many new homes are on the order of 5,000 sq.ft. for just the ground floor.
Are you suggesting that each region should have a different federal
exemption? It does make sense, but may not be good policy in the long
run. In any case, I think that owning a 2000 square foot home in a
fancy area of an expensive city of CA is like owning a stock that has
gone up in value. If it's value uses up the estate exemption, so be
it.
Bill Brown
> why limit this to farms? �Why not any business? �How many people did not
> want to be farmers (or continue the other family business) burdened with the
> debt needed to be taken on to pay the death tax?
>
Actually, the break applies to all family owned businesses, not just
farms.
The estate tax law in effect from 2009 results in about 5,500 estates
actually paying estate tax.
Wallace
> On Dec 30, 12:37 am, "Wallace" <pleasenos...@microsoft.com> wrote:
>
>> why limit this to farms? Why not any business? How many people did not
>> want to be farmers (or continue the other family business) burdened with
>> the
>> debt needed to be taken on to pay the death tax?
>>
> Actually, the break applies to all family owned businesses, not just
> farms.
>
> The estate tax law in effect from 2009 results in about 5,500 estates
> actually paying estate tax.
and billions of dollars being spent on estate tax planning, and maintaining
the additional entities created for such estate tax planning.
very few people paying estate taxes does not equate to very few people being
affected by estate tax laws.
And, such a narrow based tax is considered by many to be extremely unfair
and counterproductive.
Seth
dpb <no...@non.net> wrote:
>> "Bill Brown" <bro...@longwood.edu> wrote in message
>> news:69583c42-c163-45dc...@v7g2000vbd.googlegroups.com...
>>> On Dec 28, 11:48 pm, John Levine <jo...@iecc.com> wrote:
>>>
>>>> PS: If someone proposes to trot out the selling the family farm
>>>> argument, I'd be interested to hear of any verified cases of a family
>>>> farm that was actually sold to pay estate taxes, as opposed to sold
>>>> because the heirs didn't want to be farmers.
>>>>
>>> There are not any. Some anti-"death taxers" tried to find just such an
>>> example a few years ago and admitted defeat. They could not fine even
>>> one.
>And, as a practical matter, how would one know/discover the underlying
>reason(s) for a sale? It isn't part of disclosure.
Presumably, somebody it happened to would complain, and the people
searching hard for such cases would hear about it. Bayes Theorem says
that the likelihood of it having happened is therefore quite low.
>I (as a farmer) certainly know of ones around here that either were sold
>or were seriously hampered in operation owing to (primarily)
>unexpected/early death that made it necessary to make serious
>modifications in the family operation in order to retain a portion.
What does that mean? What sort of "modifications"? If the children
(heirs) didn't want to be full-time farmers but had other jobs, and
that's what kept them from farming, that was their choice, not a
forced sale to pay inheritance taxes.
Seth
dpb
So it has to be they had to sell the whole da-d thing for it to be a
problem in your mind?
Or couldn't purchase equipment or find sufficient other operating
capital w/o constricting the operation?
There's more complication to it than simply selling the whole bloody
operation.
--
Stuart A. Bronstein
> I (as a farmer) certainly know of ones around here that either
> were sold or were seriously hampered in operation owing to
> (primarily) unexpected/early death that made it necessary to
> make serious modifications in the family operation in order to
> retain a portion.
Chances are that was unrelated to estate taxes, because the law is
written to reduce the effect on small farms and other family owned
businesses.
--
Stu
http://downtoearthlawyer.com
Stuart A. Bronstein
>> The estate tax law in effect from 2009 results in about 5,500
>> estates actually paying estate tax.
Out of about 2,500,000 people who die in the US every year. That's
about 0.2%.
> and billions of dollars being spent on estate tax planning, and
> maintaining the additional entities created for such estate tax
> planning.
That's not only for estate tax planning. Only the people who can or
may need it do that. Avoiding the costs and inconvenience of probate
is a much larger issue, and applies to a much larger pool of people.
> And, such a narrow based tax is considered by many to be
> extremely unfair and counterproductive.
Yeah, a tax that only charges people who can well afford it is really
unfair.
--
Stu
http://downtoearthlawyer.com
dpb
> dpb <no...@non.net> wrote:
>
>> I (as a farmer) certainly know of ones around here that either
>> were sold or were seriously hampered in operation owing to
>> (primarily) unexpected/early death that made it necessary to
>> make serious modifications in the family operation in order to
>> retain a portion.
>
> Chances are that was unrelated to estate taxes, because the law is
> written to reduce the effect on small farms and other family owned
> businesses.
How would you know from there???? :(
(As compared to being a neighbor and discussing the situation w/ the
families involved, that is... ?)
Again, it isn't as clearcut as you would like to make it appear as to
what constitutes a serious effect on the business operation. Even as
"small" a perturbation as using up working capital for estate settlement
purposes and the resulting effects on operations can be major hurdles.
In one case it ended up in forced sale some years later; in the otherof
which I'm thinking the jury is still out but it's a struggle still after
five years.
--
Seth
dpb <no...@non.net> wrote:
>Again, it isn't as clearcut as you would like to make it appear as to
>what constitutes a serious effect on the business operation. Even as
>"small" a perturbation as using up working capital for estate settlement
>purposes and the resulting effects on operations can be major hurdles.
>In one case it ended up in forced sale some years later; in the otherof
>which I'm thinking the jury is still out but it's a struggle still after
>five years.
"estate settlement purposes" means what? Paying legal fees? Proving
cash inheritance for those who didn't get the farm? Those aren't
inheritance tax issues.
Seth
Seth
dpb <no...@non.net> wrote:
>Seth wrote:
>> In article <hhfpu6$62k$1...@news.eternal-september.org>,
>> dpb <no...@non.net> wrote:
>>> I (as a farmer) certainly know of ones around here that either were sold
>>> or were seriously hampered in operation owing to (primarily)
>>> unexpected/early death that made it necessary to make serious
>>> modifications in the family operation in order to retain a portion.
>>
>> What does that mean? What sort of "modifications"? If the children
>> (heirs) didn't want to be full-time farmers but had other jobs, and
>> that's what kept them from farming, that was their choice, not a
>> forced sale to pay inheritance taxes.
>
>So it has to be they had to sell the whole da-d thing for it to be a
>problem in your mind?
For it to stop being a farm because the person who farmed it full-time
died and his children didn't want to isn't an inheritance tax issue.
Seth
dpb
> In article <hhpdls$8rn$1...@news.eternal-september.org>,
> dpb <no...@non.net> wrote:
>> Seth wrote:
>>> In article <hhfpu6$62k$1...@news.eternal-september.org>,
>>> dpb <no...@non.net> wrote:
>
>>>> I (as a farmer) certainly know of ones around here that either were sold
>>>> or were seriously hampered in operation owing to (primarily)
>>>> unexpected/early death that made it necessary to make serious
>>>> modifications in the family operation in order to retain a portion.
>>> What does that mean? What sort of "modifications"? If the children
>>> (heirs) didn't want to be full-time farmers but had other jobs, and
>>> that's what kept them from farming, that was their choice, not a
>>> forced sale to pay inheritance taxes.
>> So it has to be they had to sell the whole da-d thing for it to be a
>> problem in your mind?
>
> For it to stop being a farm because the person who farmed it full-time
> died and his children didn't want to isn't an inheritance tax issue.
That's not what happened in either of the two cases I personally know
and mentioned; that's your supposed scenario (to rebut the actuality,
apparently).
--
Seth
dpb <no...@non.net> wrote:
>Seth wrote:
>> In article <hhpdls$8rn$1...@news.eternal-september.org>,
>> dpb <no...@non.net> wrote:
>>> Seth wrote:
>>>> In article <hhfpu6$62k$1...@news.eternal-september.org>,
>>>> dpb <no...@non.net> wrote:
>>
>>>>> I (as a farmer) certainly know of ones around here that either were sold
>>>>> or were seriously hampered in operation owing to (primarily)
>>>>> unexpected/early death that made it necessary to make serious
>>>>> modifications in the family operation in order to retain a portion.
>>>> What does that mean? What sort of "modifications"? If the children
>>>> (heirs) didn't want to be full-time farmers but had other jobs, and
>>>> that's what kept them from farming, that was their choice, not a
>>>> forced sale to pay inheritance taxes.
>>> So it has to be they had to sell the whole da-d thing for it to be a
>>> problem in your mind?
>> For it to stop being a farm because the person who farmed it full-time
>> died and his children didn't want to isn't an inheritance tax issue.
>
>That's not what happened in either of the two cases I personally know
>and mentioned; that's your supposed scenario (to rebut the actuality,
>apparently).
In neither case did you say specifically that it was inheritance taxes
that forced the sale, with details (such as the value of the farm and
amount of those taxes).
Seth
dpb
I said in these two examples the tax burden was sufficient to cause
extreme operational difficulties; one case which ended up in the forced
sale relatively short time later and the other with a greatly different
(and smaller) operation afterwards owing to forced restructuring.
The point is there's far more to the problems raised than your
simplistic argument that the entire place is sold immediately. That
they weren't still doesn't make the estate tax problem go away.
--
Stuart A. Bronstein
>> In neither case did you say specifically that it was
>> inheritance taxes that forced the sale, with details (such as
>> the value of the farm and amount of those taxes).
>
> I said in these two examples the tax burden was sufficient to
> cause extreme operational difficulties; one case which ended up
> in the forced sale relatively short time later and the other
> with a greatly different (and smaller) operation afterwards
> owing to forced restructuring.
>
> The point is there's far more to the problems raised than your
> simplistic argument that the entire place is sold immediately.
> That they weren't still doesn't make the estate tax problem go
> away.
I'll agree that it's not perfect. But Congress has done things to
make it easier on the family of people with family farms. First
they allow assessment of farms for tax purposes to be done for the
price the land would sell as a farm, not its "highest and best
use" as required of everyone else. Then they allow payment of
estate taxes to be done over a long period of time with low
interest.
What is a typical value of a family farm? What sort of an
exemption should farmers get?
--
Stu
http://downtoearthlawyer.com
dpb
...
> I'll agree that it's not perfect. But Congress has done things to
> make it easier on the family of people with family farms. First
> they allow assessment of farms for tax purposes to be done for the
> price the land would sell as a farm, not its "highest and best
> use" as required of everyone else. Then they allow payment of
> estate taxes to be done over a long period of time with low
> interest.
>
> What is a typical value of a family farm? What sort of an
> exemption should farmers get?
A) All depends on the size of the operation and land values and the
magnitude of improvements. Out here, land values alone could be $5M or
more for a reasonably-large-sized operation of irrigated land. That
value would include nothing for improvements, equipment, inventories,
etc., etc., ... Where land prices have really increased even though
they may not have the total acreages I'd have no problems believing it
could easily be multiples of that.
B) I don't know either, specifically. My personal opinion is the
estate tax in general is wrong as a concept despite the Jefferson(?)
argument for it. (In that regard I note that even some of the extremely
wealthy proponents for it have made certain _their_ estates aren't going
to be affected significantly which seems more than just a little
disingenuous).
My point is it ain't as easy as the proponents claim to either avoid the
implications nor for them to assert that it doesn't have any effect
because they couldn't find the "forced sale" because it doesn't really
happen that way directly.
What's happening, of course, is that folks are using what other
organizational forms they can within state laws on "corporate farms"
which vary widely but that also comes w/ issues. The changes in the
economics have forced the sizes of farming operations to increase
drastically over the last 30 years or so.
--
Seth
>>>>>>> I (as a farmer) certainly know of ones around here that either were sold
>>>>>>> or were seriously hampered in operation owing to (primarily)
>>>>>>> unexpected/early death that made it necessary to make serious
>>>>>>> modifications in the family operation in order to retain a portion.
>> In neither case did you say specifically that it was inheritance taxes
>> that forced the sale, with details (such as the value of the farm and
>> amount of those taxes).
>
>I said in these two examples the tax burden
That's the first time you actually say "tax burden".
> was sufficient to cause
>extreme operational difficulties; one case which ended up in the forced
>sale relatively short time later and the other with a greatly different
>(and smaller) operation afterwards owing to forced restructuring.
Why hasn't someone given the details of those cases to the
anti-inheritance-tax groups? The story might have been worth enough
money to save their farms.
>The point is there's far more to the problems raised than your
>simplistic argument that the entire place is sold immediately. That
>they weren't still doesn't make the estate tax problem go away.
And I'm still not seeing numbers.
Seth
dpb
> In article <hi4rvv$it4$1...@news.eternal-september.org>,
> dpb <no...@non.net> wrote:
>> Seth wrote:
>
>>>>>>>> I (as a farmer) certainly know of ones around here that either were sold
>>>>>>>> or were seriously hampered in operation owing to (primarily)
>>>>>>>> unexpected/early death that made it necessary to make serious
>>>>>>>> modifications in the family operation in order to retain a portion.
>
>>> In neither case did you say specifically that it was inheritance taxes
>>> that forced the sale, with details (such as the value of the farm and
>>> amount of those taxes).
>> I said in these two examples the tax burden
>
> That's the first time you actually say "tax burden".
>
>> was sufficient to cause
>> extreme operational difficulties; one case which ended up in the forced
>> sale relatively short time later and the other with a greatly different
>> (and smaller) operation afterwards owing to forced restructuring.
>
> Why hasn't someone given the details of those cases to the
> anti-inheritance-tax groups? The story might have been worth enough
> money to save their farms.
>
>> The point is there's far more to the problems raised than your
>> simplistic argument that the entire place is sold immediately. That
>> they weren't still doesn't make the estate tax problem go away.
>
> And I'm still not seeing numbers.
Primarily afaict because the naysayers have the same mindset you seem to
have that unless the entire operation is liquidated immediately upon
death it doesn't count.
--
Stuart A. Bronstein
> Stuart A. Bronstein wrote:
>>
>> What is a typical value of a family farm? What sort of an
>> exemption should farmers get?
>
> A) All depends on the size of the operation and land values and
> the magnitude of improvements. Out here, land values alone
> could be $5M or more for a reasonably-large-sized operation of
> irrigated land. That value would include nothing for
> improvements, equipment, inventories, etc., etc., ... Where
> land prices have really increased even though they may not have
> the total acreages I'd have no problems believing it could
> easily be multiples of that.
Ok, that makes sense. Then the change that's contemplated would
help a lot: retain the exemption at $3.5 million per person,
allowing a couple that plans properly to pass $7 million without
estate tax.
Remember that a family farm will be valued based on what someone
would pay to use it as a farm. That would be a lot less than what
might be paid to use it for development or something else.
> B) I don't know either, specifically. My personal opinion is
> the estate tax in general is wrong as a concept despite the
> Jefferson(?) argument for it. (In that regard I note that even
> some of the extremely wealthy proponents for it have made
> certain _their_ estates aren't going to be affected
> significantly which seems more than just a little disingenuous).
The Gallo family (i.e. Gallo winery) got legislation passed that
allowed them (and everyone else with their assets and who noticed)
to avoid the generation skipping transfer tax. But for the most
part I'm not aware of wealthy families avoiding the estate tax. I
suppose if there's enough money they can get insurance to pay the
tax, but that imposes another cost.
> My point is it ain't as easy as the proponents claim to either
> avoid the implications nor for them to assert that it doesn't
> have any effect because they couldn't find the "forced sale"
> because it doesn't really happen that way directly.
I understand that. And I am, as well, not thrilled at what has
happened to the family farm in recent years. I imagine that one
option might be to eliminate the estate tax completely for small
(whatever that means) farms, but not allow a stepped up basis. So
as long as the farm stays in the family there is no tax. But as
soon as it gets sold, the tax will kick in on a good part of the
sale price.
> What's happening, of course, is that folks are using what other
> organizational forms they can within state laws on "corporate
> farms" which vary widely but that also comes w/ issues. The
> changes in the economics have forced the sizes of farming
> operations to increase drastically over the last 30 years or so.
And that has caused farms to produce things that are not
necessarily in the best interests of the country, but allow for the
greatest profit. Things like subsidies for some crops and not for
others also play a large part in this.
But it seems to me that there is a growing movement toward better
and more local foods (even if at a higher cost), and those are
often grown on smaller farms. So there is hope.
--
Stu
http://downtoearthlawyer.com
dpb
> dpb <no...@non.net> wrote:
>> Stuart A. Bronstein wrote:
>>> What is a typical value of a family farm? What sort of an
>>> exemption should farmers get?
>> A) All depends on the size of the operation and land values and
>> the magnitude of improvements. Out here, land values alone
>> could be $5M or more for a reasonably-large-sized operation of
>> irrigated land. That value would include nothing for
>> improvements, equipment, inventories, etc., etc., ... Where
>> land prices have really increased even though they may not have
>> the total acreages I'd have no problems believing it could
>> easily be multiples of that.
>
> Ok, that makes sense. Then the change that's contemplated would
> help a lot: retain the exemption at $3.5 million per person,
> allowing a couple that plans properly to pass $7 million without
> estate tax.
>
> Remember that a family farm will be valued based on what someone
> would pay to use it as a farm. That would be a lot less than what
> might be paid to use it for development or something else.
The above values _WERE_ based on current farmland values (based on
prices paid recently in this county at auction). Also, you apparently
are in a fairly metropolitan area where there is some likelihood of land
being developed commercially. Out in the "real" farm country, there
really are no other uses for sizable acreages as there are no
encroaching cities industry or so on (thank goodness and city folks
should be glad assuming they continue to want to eat).
The $3.5M individual would be better than the alternatives of reverting
to $1M obviously but still leaves problems w/ the early-widowed which
was the instigating even in both of the cases I've alluded to above.
Then the other half is gone.
Also, just as a consideration, do you have any idea what the capital
investment in equipment and improvements looks like these days? Have
you priced combines/tractors/planters required recently? Do you know
what a center-pivot circle and well cost to install? The fact I pointed
out that the land values don't include anything at all for the
capitalized items and improvements is significant.
>> B) I don't know either, specifically. My personal opinion is
>> the estate tax in general is wrong as a concept despite the
>> Jefferson(?) argument for it. (In that regard I note that even
>> some of the extremely wealthy proponents for it have made
>> certain _their_ estates aren't going to be affected
>> significantly which seems more than just a little disingenuous).
>
> The Gallo family (i.e. Gallo winery) got legislation passed that
> allowed them (and everyone else with their assets and who noticed)
> to avoid the generation skipping transfer tax. But for the most
> part I'm not aware of wealthy families avoiding the estate tax. I
> suppose if there's enough money they can get insurance to pay the
> tax, but that imposes another cost.
Indeed. Shows what having "real" money instead of being in the low-end
of the affected bracket can do. :(
I was thinking specifically in this case of the Buffet/Gates fiasco of
testifying for the continuation and "benefits" and then going the trust
route. Not that I particularly blame them for doing what they can; only
it's not exactly playing straight up w/ their words before Congress imo.
>> My point is it ain't as easy as the proponents claim to either
>> avoid the implications nor for them to assert that it doesn't
>> have any effect because they couldn't find the "forced sale"
>> because it doesn't really happen that way directly.
>
> I understand that. And I am, as well, not thrilled at what has
> happened to the family farm in recent years. I imagine that one
> option might be to eliminate the estate tax completely for small
> (whatever that means) farms, but not allow a stepped up basis. So
> as long as the farm stays in the family there is no tax. But as
> soon as it gets sold, the tax will kick in on a good part of the
> sale price.
>
>> What's happening, of course, is that folks are using what other
>> organizational forms they can within state laws on "corporate
>> farms" which vary widely but that also comes w/ issues. The
>> changes in the economics have forced the sizes of farming
>> operations to increase drastically over the last 30 years or so.
>
> And that has caused farms to produce things that are not
> necessarily in the best interests of the country, but allow for the
> greatest profit. Things like subsidies for some crops and not for
> others also play a large part in this.
Well, that's not all that simple, either. :) It's taken some 70 years
to build the farm programs that began w/ FDR/New Deal in response to the
Depression. We're now to the point of also complying (or at least
trying to get agreement on) w/ WTO pacts and still compete w/ the EU and
rest of world that are subsidizing certain of their production
agriculture folks at least as much if not far more than we are. Add to
that that folks like Monsanto sell same technologies outside the US for
far less than they charge producers in the US and that adds even more
bias against the US producer. So, one has to dig far deeper than the
typical coverage to have any hope at all of seeing the real picture overall.
Meanwhile, despite all that, US agriculture remains one of the few
bright spots in the balance of trade yet it seems to be always an area
under attack for more regulation and restrictions. As one last little
note on that score something over 2/3-rds of the Ag budget goes to inner
city and other aid programs rather than production agriculture.
> But it seems to me that there is a growing movement toward better
> and more local foods (even if at a higher cost), and those are
> often grown on smaller farms. So there is hope.
Over 70% of the calories consumed in the US come from the midwest farm
belt. There's some market and ability to have such localized production
on the coasts but it certainly will never be able to produce anywhere
close to the amounts of foodstuffs needed for the entire population in
the US, what more provide for the rest of the world's needs. Not to
mention that it is, of course, a very elitist "solution" as only the
affluent can afford the luxury.
--
D.F. Manno
dpb <no...@non.net> wrote:
> My point is it ain't as easy as the proponents claim to either avoid the
> implications nor for them to assert that it doesn't have any effect
> because they couldn't find the "forced sale" because it doesn't really
> happen that way directly.
>From FactCheck.org:
"The Tax Policy Center projects that roughly 440 taxable estates were
primarily�made up of farm and business assets in 2004. And even
considering estates for which farming or business was a sideline,�the
Center�found only 7,090 taxable estates for 2004 that included any farm
or business income. That's still just�38 percent of all taxable estates."
"Of the 440 taxable family�farm and business estates in 2004, two out of
five�paid an average rate of only 1.6 percent. These were taxable
estates valued at less than�$2 million."
"Worth noting is that family-owned farms and closely held businesses
already receive�special treatment under current law.�Heirs who�agree to
keep the farm or business assets within the family for 10 years after
death can reduce the taxable amount�of the estate by 40 percent to 70
percent. And if�the farm or business is at least 35 percent of the gross
value of the estate, payments can be spread out�over�14 years."
http://www.factcheck.org/article328.html
--
D.F. Manno | dfm...@mail.com
And if there were a God, I think it very unlikely that He would
have such an uneasy vanity as to be offended by those who doubt His
existence. (Bertrand Russell)
dpb
...
>>From FactCheck.org:
>
> "The Tax Policy Center projects that roughly 440 taxable estates were
> primarily made up of farm and business assets in 2004. ...
Like anything else, it only matters if it matters.
IOW, as long as you're not one of the 440 then you think it's ok?
--
Wallace
"D.F. Manno" <dfm...@mail.com> wrote in message
news:dfmanno-294D8D...@news.albasani.net...
> In article <hi502b$esf$1...@news.eternal-september.org>,
> dpb <no...@non.net> wrote:
>
>> My point is it ain't as easy as the proponents claim to either avoid the
>> implications nor for them to assert that it doesn't have any effect
>> because they couldn't find the "forced sale" because it doesn't really
>> happen that way directly.
>
>>From FactCheck.org:
>
> "The Tax Policy Center projects that roughly 440 taxable estates were
> primarily made up of farm and business assets in 2004. And even
> considering estates for which farming or business was a sideline, the
> Center found only 7,090 taxable estates for 2004 that included any farm
> or business income. That's still just 38 percent of all taxable estates."
>
> "Of the 440 taxable family farm and business estates in 2004, two out of
> five paid an average rate of only 1.6 percent. These were taxable
> estates valued at less than $2 million."
>
> "Worth noting is that family-owned farms and closely held businesses
> already receive special treatment under current law. Heirs who agree to
> keep the farm or business assets within the family for 10 years after
> death can reduce the taxable amount of the estate by 40 percent to 70
> percent. And if the farm or business is at least 35 percent of the gross
> value of the estate, payments can be spread out over 14 years."
>
> http://www.factcheck.org/article328.html
But how much effort, and how many millions of dollars were spent in estate
planning to achieve this result?
D.F. Manno
dpb <no...@non.net> wrote:
> D.F. Manno wrote:
>
> >>From FactCheck.org:
> >
> > "The Tax Policy Center projects that roughly 440 taxable estates were
> > primarily made up of farm and business assets in 2004. ...
>
> Like anything else, it only matters if it matters.
>
> IOW, as long as you're not one of the 440 then you think it's ok?
Does anybody think any tax is "ok"? They're a necessity, but nobody
likes paying them.
Besides, you're moving the goal posts. Your initial argument was that
the estate tax forced too many family farms/businesses to be sold. If
only 440 such estates were subject to the tax, there can't have been
that many forced to sell because of the tax.
--
D.F. Manno
domm...@aim.com
D.F. Manno
"Wallace" <please...@microsoft.com> wrote:
> D.F. Manno <dfm...@mail.com> wrote:
>
> >>From FactCheck.org:
> >
> > "The Tax Policy Center projects that roughly 440 taxable estates were
> > primarily made up of farm and business assets in 2004. And even
> > considering estates for which farming or business was a sideline, the
> > Center found only 7,090 taxable estates for 2004 that included any farm
> > or business income. That's still just 38 percent of all taxable estates."
> >
> > "Of the 440 taxable family farm and business estates in 2004, two out of
> > five paid an average rate of only 1.6 percent. These were taxable
> > estates valued at less than $2 million."
> >
> > "Worth noting is that family-owned farms and closely held businesses
> > already receive special treatment under current law. Heirs who agree to
> > keep the farm or business assets within the family for 10 years after
> > death can reduce the taxable amount of the estate by 40 percent to 70
> > percent. And if the farm or business is at least 35 percent of the gross
> > value of the estate, payments can be spread out over 14 years."
> >
> > http://www.factcheck.org/article328.html
>
> But how much effort, and how many millions of dollars were spent in estate
> planning to achieve this result?
How much effort and how many millions of dollars were spent in tax
planning to avoid income tax?
--
D.F. Manno
domm...@aim.com
dpb
> In article <hi7tf0$636$1...@news.eternal-september.org>,
> dpb <no...@non.net> wrote:
>
>> D.F. Manno wrote:
>>
>>> >From FactCheck.org:
>>>
>>> "The Tax Policy Center projects that roughly 440 taxable estates were
>>> primarily made up of farm and business assets in 2004. ...
>> Like anything else, it only matters if it matters.
>>
>> IOW, as long as you're not one of the 440 then you think it's ok?
>
> Does anybody think any tax is "ok"? They're a necessity, but nobody
> likes paying them.
>
> Besides, you're moving the goal posts. Your initial argument was that
> the estate tax forced too many family farms/businesses to be sold. If
> only 440 such estates were subject to the tax, there can't have been
> that many forced to sell because of the tax.
I made no claim on numbers overall; only that there are two instances in
this and a neighboring county I am aware of in which it drastically
altered the operation. From the fact that the total population in the
two counties combined is well under 50k and well over half that is in
the one sizable county seat I would presume the numbers nationwide would
be sizable in that regards.
And again, my contention is that it isn't necessarily a direct sale of
the entire operation immediately on/after death that's the entire risk
but that the effects on operations of having to deal w/ the financial
burdens on top of everything else during and after the transition is an
unfair burden. And, I'll agree it isn't only farm family businesses
that are affected; I think it's a problem for essentially all.
As others noted I also agree there are untold consequences of extra
effort and costs undertaken solely for the intent to try to avoid the
problem that have costs associated with them as well.
As for "necessity" I'll grant there's a need for revenue; however, I
don't think there's anything that makes the estate tax absolutely
mandatory--one could always substitute another form in lieu of.
How much actual revenue does it generate overall annually and what
fraction of total federal revenues is that?
As you can undoubtedly tell and I stated before, I think it is an
unethical tax on its face and if retained the limits should be so hight
as to make anything other than the $10s or $100s of millions essentially
exempt and it should be indexed w/ inflation automagically.
I referred to the Jefferson stance earlier and nobody corrected my
memory that it was he so I'll throw out my last dart using it as an
illustration. Would he have considered Monticello and its environs
along w/ Poplar Forest and the rest of his holdings egregiously large?
What would those holdings at their peak be worth in today's money if
still intact?
--
John Levine
> likes paying them.
"Taxes are the price we pay for civilization."
-- Oliver Wendell Holmes, Jr.
Unless you think that freeloading is a virtue, or that Money Faeries
will pave the roads and teach our children, of course taxes are OK.
We can have reasonable arguments about the fairest and most efficient
way to assess and collect them, but not about whether they should
exist in the first place.
R's,
John
Arthur Kamlet
>> Does anybody think any tax is "ok"? They're a necessity, but nobody
>> likes paying them.
>
> "Taxes are the price we pay for civilization."
> -- Oliver Wendell Holmes, Jr.
>
>Unless you think that freeloading is a virtue, or that Money Faeries
>will pave the roads and teach our children, of course taxes are OK.
>
>We can have reasonable arguments about the fairest and most efficient
>way to assess and collect them, but not about whether they should
>exist in the first place.
Some year ago we hosted a high-school exchange student at our home,
and as it happened, while he was here, there was an election.
One of the things on the ballot was a local county mental health
facilities tax, something that the county seems to do pretty well
at, and just about always is approved by the voters.
So we explained to this student what was on the ballot and when we to
to the proposed mental health facilities tax, he said that's dumb,
no one back home would ever vote to increase their taxes. And he was
not just dead serious, he came away thinking Americans were plain
crazy because they voted to increase their taxes.
--
ArtKamlet at a o l dot c o m Columbus OH K2PZH
John Levine
>fraction of total federal revenues is that?
With the rates bouncing up and down any estimate is a guess, but I've
seen credible numbers in the $70 to $100 billion range. It's not the
income tax, but it's not peanuts either. Apparently, increasing the
exemption from $2M/couple to $7M doesn't affect the revenue very much
and greatly decreases the number of estates affected. I wouldn't have
any problem with restoring the exemption to the $7M it was last year.
>As you can undoubtedly tell and I stated before, I think it is an
>unethical tax on its face
Huh? Because it only affects rich people? Because it makes it less
likely that we'll have a hereditary rentier plutocracy?
>I referred to the Jefferson stance earlier and nobody corrected my
>memory that it was he so I'll throw out my last dart using it as an
>illustration. Would he have considered Monticello and its environs
>along w/ Poplar Forest and the rest of his holdings egregiously
>large?
I dunno. Would that be with or without the slaves?
R's,
John
Seth
dpb <no...@non.net> wrote:
>Seth wrote:
>> In article <hi4rvv$it4$1...@news.eternal-september.org>,
>> dpb <no...@non.net> wrote:
>> Why hasn't someone given the details of those cases to the
>> anti-inheritance-tax groups? The story might have been worth enough
>> money to save their farms.
>>
>>> The point is there's far more to the problems raised than your
>>> simplistic argument that the entire place is sold immediately. That
>>> they weren't still doesn't make the estate tax problem go away.
>>
>> And I'm still not seeing numbers.
>
>Primarily afaict because the naysayers have the same mindset you seem to
>have that unless the entire operation is liquidated immediately upon
>death it doesn't count.
That doesn't explain why nobody is _providing_ numbers. "You wouldn't
believe me if I proved it" is an excuse, not a proof. Nobody will
believe it based on the fact that you claim to have an excuse for not
providing actual information.
Seth
dpb
> In article <hi5upo$m18$1...@news.eternal-september.org>,
> dpb <no...@non.net> wrote:
>> Seth wrote:
>>> In article <hi4rvv$it4$1...@news.eternal-september.org>,
>>> dpb <no...@non.net> wrote:
>
>>> Why hasn't someone given the details of those cases to the
>>> anti-inheritance-tax groups? The story might have been worth enough
>>> money to save their farms.
>>>
>>>> The point is there's far more to the problems raised than your
>>>> simplistic argument that the entire place is sold immediately. That
>>>> they weren't still doesn't make the estate tax problem go away.
>>> And I'm still not seeing numbers.
>> Primarily afaict because the naysayers have the same mindset you seem to
>> have that unless the entire operation is liquidated immediately upon
>> death it doesn't count.
>
> That doesn't explain why nobody is _providing_ numbers. "You wouldn't
> believe me if I proved it" is an excuse, not a proof. Nobody will
> believe it based on the fact that you claim to have an excuse for not
> providing actual information.
The only way to provide numbers for these operations would be to have
the ledgers for the several years operation preceding and after the
incidents. That's clearly beyond the realm of what can be done over
usenet even if one were inclined to publish same. Again, I repeat it
wasn't that they had to sell the entire operation immediately so simply
the value and the tax by itself aren't sufficient. Since neither
(fortunately) were our operation I don't have any right to bandy their
numbers about anyway.
I can't talk of others; I don't know the circumstances. As noted
elsewhere, given this is a pretty low population area and I'm aware of
two in this area I can't imagine that it isn't an issue elsewhere as well.
The following is again my opinion but I still think the primary problem
is that there isn't sufficient interest in the real problem and that the
proponents of keeping it set the ground rules of "evidence" they would
consider to cull out anything that doesn't fit the instantaneous and
total liquidation as not being "causal enough". If it takes three
years, say, or the operation is down-sized by half, it's like proving
working in the shipyard was the cause of the malignancy--maybe, but the
claim will be denied more times than not because of no way to prove
causation from correlation.
Disagree if you want; I'm sure you will. No response necessary but how
many of your clients are sizable family farms so you have the inside
information on how it might be going to affect their operations or would
if the operator(s) were in an accident tomorrow?
But, you've hit on an important point and I'll bring it up at the next
Farm Bureau meeting--perhaps the tactic has been wrong entirely in
trying to find those "smoking gun" cases but it is these in-depth cases
and projections of impact that would be more useful.
--
Seth
>> That doesn't explain why nobody is _providing_ numbers. "You wouldn't
>> believe me if I proved it" is an excuse, not a proof. Nobody will
>> believe it based on the fact that you claim to have an excuse for not
>> providing actual information.
>
>The only way to provide numbers for these operations would be to have
>the ledgers for the several years operation preceding and after the
>incidents.
How about just "The estate was worth $X, including $Y for the farm.
Estate taxes were $Z; bequests to those not getting the farm were $W,
and estate taxes had to be paid according to $SCHEDULE."
Those are the key numbers. If the entire estate was the farm, and it
was left to the decedent's child, and taxes were significant, that's
one thing. If the farm was half the estate, and others got cash
bequests leaving not enough in the estate to pay taxes (from the
residual which included the farm), that's another.
>The following is again my opinion but I still think the primary problem
>is that there isn't sufficient interest in the real problem and that the
>proponents of keeping it set the ground rules of "evidence" they would
>consider to cull out anything that doesn't fit the instantaneous and
>total liquidation as not being "causal enough".
If you publish the facts, whether or not some interest group accepts
them isn't very important; the public can see for themselves.
> If it takes three years, say, or the operation is down-sized by
>half, it's like proving working in the shipyard was the cause of the
>malignancy--maybe, but the claim will be denied more times than not
>because of no way to prove causation from correlation.
The amount of taxes paid vs. the amount raised by selling (half) the
farm over the next three years is indicative. If taxes were $100,000
and the farm was sold for $20,000,000, then I don't think taxes were
the cause. If taxes were $1,000,000 and the farm was sold for
$3,000,000 then they were.
>But, you've hit on an important point and I'll bring it up at the next
>Farm Bureau meeting--perhaps the tactic has been wrong entirely in
>trying to find those "smoking gun" cases but it is these in-depth cases
>and projections of impact that would be more useful.
Information is useful. If somebody claims "that never happened" and
then examples start forcing him to backtrack "Well, they never had to
sell the entire farm within 15 minutes." he isn't going to win many
arguments.
Seth
dpb
...
> ... If the farm was half the estate, and others got cash
> bequests leaving not enough in the estate to pay taxes (from the
> residual which included the farm), that's another.
I don't think "that's another" at all in reality and that's part of the
problem of analyzing it in that manner. While technically true as far
as specific tax alone goes sure but it's that tax burden that creates
the issue of there not being sufficient assets to make for an orderly
transition w/o disrupting the operation that I see as the reason there's
a problem in the tax.
...
> If you publish the facts, whether or not some interest group accepts
> them isn't very important; the public can see for themselves.
Problem is, "the public" isn't making the legislation, it's a group of
self-serving politicians that don't give a hoot about public afaict.
...
I'll see what we can do about preparing more in depth analyses and data,
though. I'm just not convinced anybody really pays any attention to
anything other than 30-sec sound bites in DC unfortunately.
--
Seth
dpb <no...@non.net> wrote:
>Seth wrote:
>...
>> ... If the farm was half the estate, and others got cash
>> bequests leaving not enough in the estate to pay taxes (from the
>> residual which included the farm), that's another.
>
>I don't think "that's another" at all in reality and that's part of the
>problem of analyzing it in that manner. While technically true as far
>as specific tax alone goes sure but it's that tax burden that creates
>the issue of there not being sufficient assets to make for an orderly
>transition w/o disrupting the operation that I see as the reason there's
>a problem in the tax.
If the farmer makes the decision to divide his estate in such a way
that the recipient of the farm can't afford to continue farming, and
he had the option to divide his estate in a different way which would
have allowed the recipient to continue farming, then I see it as the
farmer's decision that caused farming to be unsupportable.
Suppose the farmer's will says "I leave $1,000,000 to Child A, and the
rest (including the farm) to Child B" and the estate has $100,000 cash
plus the farm (worth $3,000,000). There's no estate tax, but the
administrator has to borrow $900,000 against the farm in order to give
Child A his bequest. Now Child B can't afford to continue farming,
because the farm doesn't produce enough income to pay off the loan and
for him to live on. That clearly isn't an estate tax issue, because
there is no estate tax. Now change that example so there's, say,
$1,000 in estate tax. I say the problem is still the way the farmer
divided his property in his will, not the estate tax.
>> If you publish the facts, whether or not some interest group accepts
>> them isn't very important; the public can see for themselves.
>
>Problem is, "the public" isn't making the legislation, it's a group of
>self-serving politicians that don't give a hoot about public afaict.
They do want re-election at some point, so they at least pretend to
pay attention to what the public wants.
>I'll see what we can do about preparing more in depth analyses and data,
>though. I'm just not convinced anybody really pays any attention to
>anything other than 30-sec sound bites in DC unfortunately.
So come up with some that have facts behind them and support your
position.
Seth
dpb
...
> Suppose the farmer's will says "I leave $1,000,000 to Child A, and the
> rest (including the farm) to Child B" and the estate has $100,000 cash
> plus the farm (worth $3,000,000). There's no estate tax, but the
> administrator has to borrow $900,000 against the farm in order to give
> Child A his bequest. Now Child B can't afford to continue farming,
> because the farm doesn't produce enough income to pay off the loan and
> for him to live on. That clearly isn't an estate tax issue, because
> there is no estate tax. Now change that example so there's, say,
> $1,000 in estate tax. I say the problem is still the way the farmer
> divided his property in his will, not the estate tax.
That's true and unfortunately it's part of the problem w/ farm
businesses that they are extremely capital-intensive.
My viewpoint is why compounding the problem even further is seen as good
policy by so many (and I don't restrict this only to farm operations but
family businesses in general).
--
Mark Bole
> That's true and unfortunately it's part of the problem w/ farm
> businesses that they are extremely capital-intensive.
> My viewpoint is why compounding the problem even further is seen as good
> policy by so many (and I don't restrict this only to farm operations but
> family businesses in general).
Doesn't/couldn't someone who wanted to preserve the farm operation "in
the family" start setting aside funds in the later years of the owner's
expected life to meet the cash flow necessary to pay the estate tax?
This applies to both the owner and the prospective heirs.
In a sense, it (estate tax) is really a cost of doing a family business
that should be recognized all along, even if it is paid all at once upon
death. After all, the accumulation of wealth that triggers the tax
didn't happen all at once. Taxing that accumulation once every
generation doesn't sound too frequent to me.
-Mark Bole
D.F. Manno
dpb <no...@non.net> wrote:
> D.F. Manno wrote:
> > dpb wrote:
> >> D.F. Manno wrote:
> >>
> >>> >From FactCheck.org:
> >>>
> >>> "The Tax Policy Center projects that roughly 440 taxable estates were
> >>> primarily made up of farm and business assets in 2004. ...
> >>
> >> Like anything else, it only matters if it matters.
> >>
> >> IOW, as long as you're not one of the 440 then you think it's ok?
> >
> > Does anybody think any tax is "ok"? They're a necessity, but nobody
> > likes paying them.
> >
> > Besides, you're moving the goal posts. Your initial argument was that
> > the estate tax forced too many family farms/businesses to be sold. If
> > only 440 such estates were subject to the tax, there can't have been
> > that many forced to sell because of the tax.
>
> I made no claim on numbers overall; only that there are two instances in
> this and a neighboring county I am aware of in which it drastically
> altered the operation. From the fact that the total population in the
> two counties combined is well under 50k and well over half that is in
> the one sizable county seat I would presume the numbers nationwide would
> be sizable in that regards.
You're offering anecdotes, I offered data.
> And again, my contention is that it isn't necessarily a direct sale of
> the entire operation immediately on/after death that's the entire risk
> but that the effects on operations of having to deal w/ the financial
> burdens on top of everything else during and after the transition is an
> unfair burden. And, I'll agree it isn't only farm family businesses
> that are affected; I think it's a problem for essentially all.
Then produce some evidence to back up your contentions.
--
D.F. Manno
domm...@aim.com
dpb
> dpb wrote:
>
>> That's true and unfortunately it's part of the problem w/ farm
>> businesses that they are extremely capital-intensive.
>
>> My viewpoint is why compounding the problem even further is seen as
>> good policy by so many (and I don't restrict this only to farm
>> operations but family businesses in general).
>
> Doesn't/couldn't someone who wanted to preserve the farm operation "in
> the family" start setting aside funds in the later years of the owner's
> expected life to meet the cash flow necessary to pay the estate tax?
> This applies to both the owner and the prospective heirs.
>
> In a sense, it (estate tax) is really a cost of doing a family business
> that should be recognized all along, even if it is paid all at once upon
> death. After all, the accumulation of wealth that triggers the tax
> didn't happen all at once. Taxing that accumulation once every
> generation doesn't sound too frequent to me.
Ideally, yes, that would be the way to do so. Unfortunately, in real
life things rarely (if ever) are so neat and easy.
Generally even large operations these days have very poor (by investment
criteria) ROIs which makes the accumulation of cash often a very
difficult issue even if there is a quite large capital investment.
As for the accumulation of wealth argument, again a very large fraction
of that is in land values that are simply appreciation and while in
theory "wealth", they're not at all liquid and so aren't of much benefit
when the time comes.
Also, both cases to which I have previously alluded came w/ deaths at
early actuarial ages which made that time frame much shorter than one
would have reasonably expected.
I don't know best solution; on a more personal note I had thought we had
things reasonably well arranged but circumstances have now unexpectedly
changed such that it doesn't appear that the expected scenario might be
possible despite having thought we had a plan. 'Tis a quandary and
we're not large at all as a operation; no clue how would try to handle
it if were.
And, that's in a case where owing to having been independently employed
and reasonably successful off the farm before returning after dad's
passing that had opportunity to build some other outside equity w/ which
to have some flexibility in balancing assets for at least a modicum of
fairness; if had only had the farm operation w/ which to have tried to
have done that it wouldn't be so.
Again, I just don't see much rationale for the penalties other than
punitive for anything under a much larger cap than anybody has spoken of
to date.
--
dpb
...
> You're offering anecdotes, I offered data.
Since I know the individuals I mentioned personally, that's sufficient
data for them for me... :)
...
> Then produce some evidence to back up your contentions.
I have no authority to provide those individuals' information and wasn't
really attempting to do anything here except voice objection/opinion...
But, as noted upthread, a couple of ideas were engendered that I will
follow up on w/ local/state FB for their consideration and input to
national organization in how to better present the argument.
--