Stupid Rule; Stupid Republicans
by Laurence M. Vance: Pay
Up or Die
One of the
stupidest, most asinine, and most evil things that Americans will
encounter this tax season is the gift tax.
tax is a tax on the transfer of property by one individual to
another while receiving nothing, or less than full value, in return.
The tax applies whether the donor intends the transfer to be a
gift or not.
tax applies to the transfer by gift of any property. You make
a gift if you give property (including money), or the use of or
income from property, without expecting to receive something of
at least equal value in return. If you sell something at less
than its full value or if you make an interest-free or reduced-interest
loan, you may be making a gift.
How bad does
the IRS want to tax you for giving someone a gift? Here is your
"The general rule is that any gift is a taxable gift. However,
there are many exceptions to this rule. Generally, the following
gifts are not taxable gifts."
- Gifts that
are not more than the annual exclusion for the calendar year.
or medical expenses you pay for someone (the educational and medical
- Gifts to
- Gifts to
a political organization for its use.
- In addition
to this, gifts to qualifying charities are deductible from the
value of the gift(s) made.
And what is
the annual exclusion amount? Again, according to the IRS:
"All of the gifts made during the calendar year to a donee
are fully excluded under the annual exclusion if they are all gifts
of present interest and they total $13,000 or less."
My, how generous
is the federal government! As long as you donít give someone a gift
worth over $13,000 then you donít have to pay any gift tax.
But why do
we have a gift tax in the first place? Donít we already pay taxes
on the money we earn? Why should we be taxed again just because
we give away money instead of spend it? Is this not double taxation?
Of course it is. But the federal government loves taxing money twice.
Is there a tax deduction for Social Security and Medicare taxes
paid? Of course not. Are dividends taxed after corporations already
paid taxes on their profits? Of course they are.
why we have a gift tax is because we have an estate tax. Without
a gift tax, the rich could give away all their money before they
die and thus avoid paying the estate tax. But whatís wrong with
that? Havenít they already paid taxes on not only the money they
earned, but also on their capital gains and interest they received?
For more on the estate tax, see my article "A
Libertarian View of the Estate Tax."
The rule that
you cannot give away to someone more than $13,000 in a year without
paying a gift tax is a stupid rule.
How can I possibly blame this stupid rule on Republicans? Hasnít
the gift tax been around since 1932?
First of all,
letís be clear why I am singling out the Republicans. It is Republicans
that talk about cutting taxes, not Democrats. It is Republicans
that talk about limiting government, not Democrats. It is Republicans
that talk about smaller government, not Democrats. It is Republicans
that talk about getting the government out of our lives, not Democrats.
This doesnít mean that Republicans really believe any of these things,
but they are the ones talking about them, not Democrats.
gained a majority in the House and Senate in the third year of Clintonís
first term as president. This was the first time that the Republicans
had controlled the entire Congress since the 83rd Congress
of 1953-1955 under President Eisenhower. The Republicans could have
put a bill to repeal the gift tax on Clintonís desk every day. When
Clinton refused to sign it, they could have garnered enough public
opinion in support of repealing the gift tax so that Clinton was
forced to sign it. The Republicans made absolutely no attempt to
do so. Instead, all we heard from them were excuses about needing
a larger, veto-proof majority in Congress or a Republican in the
White House to ensure the passage of Republican bills.
got their Republican president in 2000 and what happened to the
gift tax? Absolutely nothing. Why wasnít the elimination of the
gift tax made part of the Bush tax cuts? The Republicans controlled
the Congress and the presidency from the inauguration of George
Bush on January 20, 2001, until May 24, 2001, when Republican senator
Jim Jeffords switched from Republican to independent. After the
2002 election, the Republicans regained control of the Senate. The
Republicans lost both the House and the Senate in the 2006 election.
This means that for four years without interruption the Republicans
controlled the Congress and the White House. If ever in history
the gift tax could have been repealed then that was the time. But
it wasnít repealed any more than any other wealth redistribution
scheme was repealed. Instead, the government grew by leaps and bounds.
It is not government that Republicans want to limit, make smaller,
and get out of our lives, it is only government controlled by Democrats.
The late Sam
Francis (1947-2005) used to call the Republican Party the Stupid
Party. Is there any doubt that he was entirely correct?
M. Vance [send him mail]
writes from central Florida. He is the author of Christianity
and War and Other Essays Against the Warfare State, The
Revolution that Wasn't, and Rethinking
the Good War. His latest book is The
Quatercentenary of the King James Bible. Visit his
© 2012 by LewRockwell.com. Permission to reprint in whole or in
part is gladly granted, provided full credit is given.
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