Oh No! Rich Texan 'Allowed' to Give His Money to His Children Instead of IRS
Times reporter David Kocieniewski learned that a man in Texas will be "allowed to pass his fortune" i.e., his own money, "to his children and grandchildren for free" instead of the IRS in his Wednesday A1 story, "Legacy for One Billionaire: Death, but No Taxes." It's another example of the Times revealing its disapproval of the push to repeal the estate tax, known among conservatives as the "death tax."
A Texas pipeline tycoon who died two months ago may become the first American billionaire allowed to pass his fortune to his children and grandchildren tax-free.
Dan L. Duncan, a soft-spoken farm boy who started with $10,000 and two propane trucks, and built a network of natural gas processing plants and pipelines that made him the richest person in Houston, died in late March of a brain hemorrhage at 77.
Had his life ended three months earlier, Mr. Duncan's riches - Forbes magazine estimated his worth at $9 billion, ranking him as the 74th wealthiest in the world - would have been subject to a federal tax of at least 45 percent. If he had lived past Jan. 1, 2011, the rate would be even higher - 55 percent.
Instead, because Congress allowed the tax to lapse for one year and gave all estates a free pass in 2010, Mr. Duncan's four children and four grandchildren stand to collect billions that in any other year would have gone to the Treasury.
The Times tried to stir some class envy among those affected by the estate tax.
The bonanza in tax savings for Mr. Duncan's descendants is sure to be unsettling to those who have paid estate taxes on more modest wealth - until Jan. 1 of this year, it applied to any estate valued at more than $3.5 million, taxing only the money exceeding that threshold, or $7 million for a couple's estate.
Hmm - Times reporter Carl Hulse assured us that the death tax "hits merely a sliver of wealthy American families" in an April 2009 article. Now we find out there were some people of "more modest wealth" occupying that "sliver" as well.
Advocates of the tax say it is unconscionable that Congressional leaders have allowed the richest Americans to reap a new tax break at a time when deficits are soaring and the income gap between wealthy and poor citizens remains near historic levels.
"The ultrawealthy in this country will still be able to pass on enormous wealth to the next generation," said Chuck Collins, who studies income inequality and has worked with billionaires like Warren E. Buffett and Bill Gates to promote an estate tax. Mr. Collins argues that the tax is a "recycling program for economic opportunity."
But opponents, who label it a death tax, say it is unfair because it taxes the same income twice - once when it is earned and again when it is passed on to heirs.