How the 1% is Rewiring Brains & Future Generations
By Thom Hartmann A...
As usual, Republicans are doing everything in their power to help the 1% get even richer. Republicans on the House Ways and Means Committee, led by Paul Ryan, have voted to eliminate the estate tax entirely.
The federal estate tax is a tax on property and assets that are passed down from a deceased individual to their heirs (like how Paris Hilton gets most of her money). The estate tax has brought in crucial revenue for our government for nearly 100 years, and Republicans have been opposed to it for nearly that long too.
They like to argue that the tax is too large, and that it’s too burdensome for small businesses and family-owned farms. But, the facts say otherwise.
According to the Center for Budget and Policy Priorities, only 2 out of every 1,000 estates will owe federal estate tax in 2015. Only two. In other words, 99.8% of estates in America owe no estate tax at all.
Similarly, as the CBPP points out, “taxable estates generally pay less than one-sixth of their value in tax.” So far, this tax doesn’t seem too “burdensome” at all. And then there’s the argument Republicans make about the estate tax hurting small businesses and family-owned farms. Well, that argument is pretty bogus too.
As the CBPP notes, “Only roughly 20 small business and small farm estates nationwide owed any estate tax in 2013, according to the Tax Policy Center.” You heard that right. Only 20 out of hundreds of thousands of small businesses and family farms nationwide owed estate taxes in 2013.
Clearly the facts don’t support any argument Republicans make about the estate tax. So, that begs the question, why are Republicans doing everything in their power to eliminate it?
Well, the answer to that is pretty simple: to put more money in the pockets of the wealthy elite who own and fund the Republicans. After all, the wealthy elite HATE the estate tax.
Just look at the Walton family, heirs to the great Wal-Mart fortune. Court records and IRS documents released in 2013 showed that family has exploited just about every loophole possible to avoid paying estate tax on their hundreds of billions of dollars.
Of course, they’ve been able to do that with help from Republicans, because today’s Republican Party lives to serve the interests of the Waltons and the rest of the wealthy elite.
Republican lawmakers have the phone numbers of the top 1% on speed-dial. But, while Republicans are helping the 1% get richer and richer, everyone else is getting screwed over. And now, a new study suggests that the Republican drive to strengthen the wealthy elite is literally hurting the development of future generations.
A study published last month in the journal Nature Neuroscience looked at children raised in lower income families and children raised in more affluent environments. Researchers at Columbia University looked at 1,000 children between the ages of 3 and 20. They conducted cognitive tests, brain imaging, DNA testing and parental surveys on education levels. The researchers then focused on two specific socioeconomic factors: parental education and family income.
They looked at how both of those factors effected the development of the brain’s surface area and its cortical thickness, both of which are linked to intelligence. What they found in the end was a clear connection between socioeconomic status and brain development.
The study basically shows that higher-income families are able to provide better nutrition for children, better education for children and safer environments for children, all of which promote better brain development. Speaking about the study, Professor Kimberly Noble, one of the study’s lead authors, said that, “If evidence supports our hypotheses, then it would suggest that governments would be well served to increase the generosity of social services for the most disadvantaged families.”
Unfortunately, that’s the exact opposite of what Republicans are doing in America. Rather than strengthening the social safety net and assistance programs like food stamps, they’re trying to do away with them. Rather than increasing taxes on the wealthy elite to help everyone, they’re trying to slash them.
Republicans live under this delusion that America was founded on the idea of a landed gentry and of a wealthy elite class, but that is the complete antithesis of our nation’s founding.
When our Founders sat down to write the Constitution, they dreamed of a country that would eventually work for every single man, woman and child, not just the privileged few. It’s time we lived up to America's ideals. That starts by expanding and tightening up the estate tax, not doing away with it.
Similarly, we need to roll back the Reagan tax cuts, so that everyone is doing their fair share to support our country. And, we need to strengthen our social safety net, and provide more funding for critical assistance programs like food stamps, housing, and education.
Only then will have a country that works for everyone.
Comments
#2
Out of 78 thousand dollars of my family inheritance, I was taxed nineteen thousand dollars. That kind of bugs me, because I needed that money for dental work that I need. I feel that the estate tax should be applied to people who inherit more than a million dollars. Sucking taxes out of my small inheritance while the top one percent hardly pays any taxes seems unfair to me.
#3
So how does inheritance tax work. If it is after tax dollars in a checking account there should be no tax. If it's in a 401k where it hasn't been taxed yet, Then it should be taxed. If you inherit a company no tax should be paid until the company is sold, it would just keep running as normal to protect all the employees. I am in Scottsdale AZ and a great biker / dive bar called Greasewood flat just closed because the kids could not afford the inheritance tax. Yes the land there dad bought 50 years ago is worth millions but the family would have just kept running the bar. This is a perfect example why it shouldn't be taxed until it's sold. Damn shame it was a very cool place. Now the family will sell the land off and they will put in a Walmart and Starbucks.
#4
I heard the opposite. When I was a young student of sociology I came across a Sociobiology text that described some research by a couple of sociobiologists that indicated that Hopi children developed faster, had better eyesight and seemed to have better cognitive skills than white children.
It was hypothesized by others reading the research that the custom of Hopi mothers of carrying their newborn infants strapped to their backs was, in some way, to account for that by giving the child's brain some gentle movement or some such thing.
So then all the wine and cheese, Whole Foods liberal types started buying baby backcarriers to carry their babies strapped to their backs like the Hopi so that their children might also benefit in the same way.
It was all false though. Back carrying had nothing to do with the Hopi children's advantage. The children of African bush men, Asians, Latin Americans and, really, any group that wasn't of Western Civilization showed similar advanced development. Previous research showed some slight similar advantage for African American children compared to children of white Americans - although this was discounted because it was not what researchers were looking for, they were looking for an advantage for white children and a disadvantage for African-American children and, having found none, declared the two groups equal. Similarly, poor, American white children exhibited a slight advantage when compared to better off counterparts.
What was happening here seemed obvious. he poor, economically disadvantaged children were from populations less sheltered from the forces of natural. Where they were from the stupid do not survive.
Thus, far from the common, conservative, social darwinistic thinking, the rich and dominant weren't so because they deserved to be because of any innate, natural superiority, they were, in fact, in a very short time of only a feee genetations, quite inferior to those whom they felt entitled to hold it over.
#5
OK, off blog topic, on one topic of today's show...
As per Thom and Dr. Cohen’s discussion;
I know this sounds conspiratorial, but if one believes climate scientists like Guy McPherson, even if civilization collapsed tomorrow, climate change would still destroy the planet in the near future. I think also, if I’m not mistaken, if too many of the trees die, then the atmosphere would be destroyed as well making the Earth a ‘dead’ planet like Mars. Given the fact that greed is usually superseded by self preservation, I have long asked myself why the elites and oligarchs would push their own planet to the brink of climate and nuclear devastation. Then I remembered something my aunt, a retired nuclear physicist, told me years ago. Nuclear winter is the only way to stop climate change and save the planet once the tipping point is passed. The atmosphere would remain intact and the radiation would dissipate over time. If we’ve passed the tipping point, the oligarchs know it, they’re not stupid. They wouldn’t want to waste time retooling for green energy if they know it’s too late. I’ll bet there’s plenty of room in places like Cheyenne Mountain and on the International Space Station for those that “count”. What’s freaking out the .01% is that climate change is happening so much faster than they predicted and they aren’t ready. Are they scrambling to prepare for nuclear war?
#6
"Higher-income families are able to provide better nutrition and safer environments for their children, which in turn promotes better brain development." Given that research finding........with one out of four children living in poverty in the richest country on the planet, it would seem that standardized testing is at best a hollow way to measure teaching ability. Why don't we instead give standardized tests to all of the elected House and Senate members and then rate voters from each state on how well their elected official scores?
"Ther Republicans are doing everything in their power to help the one percent get even richer." This includes convincing the religious right that government is violating their basic rights, in other words government is just a bad idea and it needs to shrink away. The billionaires love this type of programming, it makes looting and concentrating the wealth on par with stealing candy from a baby.
I firmly believe the self-righteous force of religious beliefs on others with acts of bigotry is nothing more than a desperate attempt to validate the uncertainty of ones own mythology. How many have died violently the last 2000 years as a direct result of this type of fanaticism...... and how many more in the near future? 1692 anyone? How about some more inquisitions?......yep theocracy really works!
#7
There are always sob story exceptions to prove the rule but inheritance taxes are to prevent a return of feudalism and wealth , power, position and privilege from being inherited rather than earned. The inheritance tax is and can be so high because inheritance is considered "unearned income". If the bar owners were never taxed and continued to rake in millions for generations, privileged and entitled from birth to step on common people that wouldn't be good either. Inheritance tax keeps too many people from starting at the top.
Tax them now and if they can't afford to stay open someone or something else will take their place.
Anyway, Kend, what people do, if they have children who are serious about working the business and have been working it, demonstrating that seriousness, is to sell the business to those children for a dollar.
#8
I would do like would Marx and Engels and eliminate inheritances, tax them 100%.
#9
Every step of the way, from Reagan's deregulation mania to Bill Clinton ending actual welfare aid for the very poor, we are living with the politics and policies chosen by the middle class. They looked at the policies and programs implemented from FDR to Reagan, which took the US to its height of wealth and productivity, and decided to do the direct opposite, essentially restoring the agenda that had plunged the US into the Great Depression of the 1930s. The proverbial masses -- middle class and poor, workers and the jobless -- have been deeply divided, evidently leaving us all powerless, unable to push back against the corporate state.
#10
Our poverty crisis didn't "just happen," nor was it forces on America. It is the result of policies chosen and supported by our middle class. That said, there's a huige difference between religion, and the exploitation of religion. In the US, religion is exploited by the right wing -- and then, only those parts they choose. Consider that both our international and domestic (economic) policies are in direct contradiction to Christ's teachings, from our hyper-militarism to this generation's war on the poor.
#11
Reply to #2: Johnnie, I'm mystified. That was a modest inheritance you've described and the tax on that sounds beyond excessive. I've known people to inherit a lot more than that without being taxed on any of it.
Reply to #8: I would agree with you about a 100% tax on inheritance if (1) everyone in society had a guaranteed income, employed or not; and/or (2) there were plenty of jobs to go around, all paying a liveable wage.
#12
The fear of the citizenry has driven fiscal policies of the wealthy establishment. From Madison to Norquist; from leveling spirit to wealth distribution, the wealthy have always manufactured hysteria about the government taking away people's money and property. The sad fact is that it works on enough people to keep it alive in the national narrative and not enough information is given in the main stream to counter. These machination to undermine the publics mind to accept a wealth friendly ideology goes relatively unchallenged since most national media figures are among the established wealth interest of America.
Even when the kind of information that Thom just laid out is presented to some people, they can not bring their selves to see it. Denial and indoctrination into a capitalist fantasy built out the most flimsy of justifications, but the most well crafted of emotionally driven propaganda that is at the heart of American delusion - That capitalism with giant tax breaks and subsidies to the job creators, and a deregulated free market will send America into a Milton Friedman style utopia.
If ignorance is bliss, the people that buy into the wealthy man's propaganda must be as giddy as a monkey with two hands filled with pooh.
#13
You can find great information about federal income from estate and gift taxes at http://www.docstoc.com/docs/2221181/A-History-of-the-United-States-Estate-Tax-through-2007. The really glaring information is in figure G, "Estate and Gift Receipts as a Percentage of Total Revenuie, 1917-2007" (copied below). There is a HUGE spike in 1937 - the year that John D. Rockefeller died and 10% of the entire federal government's income came from the estate tax. This is exactly what the Koch's and the Walton heirs are trying to avoid.
#14
Oops, looks like the graph didn't copy. Still worth checking out the site referenced and finding figure G (it's on page 8).
#15
Alice I think, like I mentioned above if it is after taxed dollars in a checking account then there is no tax but if it is pre taxed say in some kind of retirement savings plan then it is taxed. I always suggest to freinds even if it is a small estate to see a estate planer. I am sure you would want your money to go to your children or a charity rather then into a military budget or something like it.
So when as mentioned above Clinton cancelled welfare was it replaced with anything? Is welfare what you mean by a guaranteed income.
#16
The problem with letting business holdings out of inheritance tax is that the very rich can create shell corporations to hide money from taxation. It's easier to set the exemption amount and the tax rate to fair levels than to find a way to keep shell corporations from existing.
I think I found Johnnie Dorman's problem: http://en.wikipedia.org/wiki/Estate_tax_in_the_United_States#Tentative_tax. I can't sort out how there's an exemption for over $5,000,000 but amounts under $100,000 are also taxed.
#17
If anyone deserves to be imprisoned it is justice Roberts for putting our America up to the highest bidder. He should be among those made an example by harsh punishment for destroying democracy. We have to fight in every way we can to get America back to what it used to be.
#18
Kend,
A successful business person with assets in the millions should have a succession plan. While it seems evident to blame the inheritance tax, the real culprit is either the deceased or his estate planner. If he did not have a lawyer or an accountant to make a plan for this eventuality, then the deceased is fully to blame. Why didn't he protect his business and his children? If he did have some sort of succession plan, then he was poorly served, and maybe the children should look into a malpractice suit against his advisors.
There are ways to protect these assets. He could have had life insurance which would cover the taxes his children would have to pay. He could have sold his assets to his children for a low price. He could have used corporate law in some fashion, depending on the state corporate laws.
My own father built a business, supposedly for us children. He never let it go. He is still alive, but is mentally incapacitated from a series of strokes. He put a couple of things in my brothers name, and cut my sister off entirely, even though she worked for him all her life. My brother now tends him, and tries to keep any medical or social workers away, knowing that if he is put in a nursing home like he probably should be, they will take everything. My dad has essentially destroyed everything he ever built. That is the way some people are. They pretend that they care about their children, but are megolmaniacs who can't let go, and they belie the adage "you can't take it with you". (FYI, I left home many years ago and did not have an interest in the business, so I don't have a personal grudge other than feeling sad for my siblings).
This man may not have been that kind of person, but either he or his advisors did not protect the business or his children. The government simply followed the law. The wealthy know this, and they protect their assets. The inheritance tax only gets a portion of what they hand down.
We want to praise individual effort in this country, and blame the government, and we are quick to blame poor people for their plight, but when people with assets aren't responsible enough to take care of them, it is always the governments fault. Sometimes it is not.
#19
sJB, thanks I agree with your comments it is up to all individuals to take care of their estate planning but Thom and his freinds what at lot more. Way beyond what is in place now. I am 53 and have lived longer than two of my brothers and my dad. All died under 50. So I have all my ducks in a row. Sorry to hear about your dad. I hope it works out for your siblings. I personally think family should never work together. It rarely works. In my company I have key poeple that are slowly buying me (or who ever is left) out. I think I have the perfect exit plan. I guess they will see.
#20
Kend, I appreciate your concern about my siblings, but in fact it will not work out for them. My sister is 55 and worked all her adult life for my father. Our home town is a former steel and textile mill town, and those jobs are gone. She will probably never work again, and on top of it her husband is disabled. At least he has his medical care covered. They are living with their youngest daughter, who is a single mother. My sister worked all her life and paid taxes, and now has nothing.
Family business do not always fail or cause problems. The Waltons seem to manage. Johnson & Johnson is working out. Rockefellers, DuPonts, Fords, even the family of the crazy and probable serial killer Robert Durst still has a functional business. Every kind of business has risks. But when you are a young adult, and your father tells you he wants to bring you into the business, and he promises a legacy, that is a hard thing for a person to resist.
Oddly enough, my story also has a betrayal, but of a different kind. I was the first one in my family to go to college. I got a BA, then a MS and finally a PhD. I went to one of the top schools in my field. I went to work for the federal government, and have been proud to be a public servant, and proud of the work I do, which includes reviews of purchases of tens of millions of dollars of products on behalf of the public. But the very same policitians who want to eliminate the inheritance tax and privatize Social Security, have waged war on federal employees. We haven't gotten raises in years, except 1 percent last year. The House is working on a bill to make us pay more for the pension part of our retirement, which could mean a reduction of up to 10 percent of my take home pay. And they want to lower the interest rate on the fund most retirees depend on for their income to very low levels.
It may be hard for people to sympathize with government employees. However, I put myself through college. I got a good education and worked hard for it. I left my family and friends to make my life better. I waited until I was established in my profession to have children. I put money in my retirement. I did everything right.
But the financial crisis did major damage to my financial situation, and the austerity that has been imposed has prevented me from improving it by much. On top of it, Paul Ryan wants to cut the Social Security benefits I have paid for all of my life. How is that fair? and for what? So Paris Hilton and her bratty little brother can keep a bigger share of a fortune they did nothing to earn? Really??? I guess that's what I get for being born a mere peasant, not worthy to sit near Young Master Hilton on a plane.
Greed knows no bounds, and each dollar greedy people earn only fuels more greed. But at least greedy people who earn their money know what hard work is. Their children do not. Why should they be allowed to have unearned riches without paying something back to the society that made their forebears rich? Better yet, why should people like me, who work for everything they have, struggle through life so that rich kids can be even richer? don't my children deserve a chance to get ahead?
And what about people like my sister, who have been screwed over, perhaps by family, perhaps by shitty bosses, perhaps by simple bad luck? Don't people who aren't rich deserve some minimal level of support from a country they have contributed to with their own hard-earned tax dollars?
I completely agree with Thom, and all that he stands for. and I am surprised that you, a person who is obviously savvy and knowledgable about the workings of business succession, would describe a situation that clearly shows some failure to properly plan for an inevitabilty, and then blame it on the government.
We have serious problems in this country. None of these problems will be solved, until we start being honest, and face some unpleasant facts. We all need to own up to this, and we need to see, and discuss issues and situations as they really are, not in some politically expediant manner.
I hope you consider what I am saying, and try to understand that we are a community. We are a nation. We are people who should care about all of our brothers and sisters, and we should appreciate that people who are unfortunate do not deserve to be destitute. Especially when others luxuriate in what they have not earned, without seeing the humanity of those in need.
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Ryan is a disgusting hypocrite. The idle rich like hilton haven't worked a day in their life. They are the ones who feel entitled. They are lazy douches. Then we have heirs like the Koch Brothers who are doing their best to destroy America and our system of government. Ryan needs to be flushed.