Norquist exposes tax avoiders

The guy's got a point.

I'm not a big fan of Grover Norquist, who will be in town April 4 and who is so against taxes that he apparently would have refused to pay his share of the cost of World War II (back when the government actually asked taxpayers to pay for wars as they were being fought, instead of pretending they were free and borrowing money that future generations will have to repay). Michael Krasny, the host of Forum, had Norquist on April 2 and didn't ask the guy if he would have cut the taxes used to fight the Axis Powers (there was even an "excess profits tax" on corporations during the war years).

But they did have some interesting back and forth about taxes, and Norquist made an interesting observation, one that I actually agree with. (Yes, trolls -- I have found myself agreeing with Grover Norquist.)

Krasny asked him about the pledge that Bill Gates and Warren Buffett made to give away half of their wealth before they did. Krasny seemed to think this was a great thing. Norquist was fine with it, too, but he put it in context:

What the great philanthropists are actually doing is avoiding the estate tax.

By giving away their money to causes they choose, Gates and Buffett will prevent the US government from collecting taxes on that money when they die -- meaning, in effect, that the very rich who go along with this plan are saying they would rather they choose the beneficiaries of their largesse than allow the elected officials who represent the public to have a hand in redistributing the wealth.

That's the thing about philanthrophy -- it's a fine, of course, but it's also a way for the very rich to decide what they want to fund -- and in many cases we're talking about museums and universities, not homeless shelters and indigent mental-health programs.

If we taxed Gates and Buffett at a reasonable level (and even Buffett says his taxes are way too low), then we might not be looking at cuts to in-home support services and other life-saving programs that the government "just can't afford" these days. (Of course, if we hadn't spent $2 trillion and counting on wars in Iraq and Afghanistan -- or if we'd raised taxes to the level needed to pay for those wars, which would have meant an end to them, we wouldn't be in such a deep fix anyway.)



Estate Tax is at 40% of the entire amount, and that is a very high figure given that that wealth has already been taxed at least once via income tax and capital gains tax.

So yes, funding a Trust or Foundation like Gates does come with a potential 40% discount. But then again, so do charitable deductions. So to be consistent, Tim, you should really argue that we remove the tax deduction for charitable gifts.

Of course, that would result only in 60% less going to charity in the first place. And we should encourage such largesse, because they could simply move the wealth offshore and make Uncle Sam whistle for it.

So, Tim, what would you rather have? 60% of the biggest fortunes on the planet? Or 100% of nothing?

Posted by Guest on Apr. 03, 2013 @ 11:12 am

We both know Uncle Sam could find that wealth if he wants to. The laws were written to help the rich evade taxes, because they were written by the rich, for the rich.

Posted by Greg on Apr. 03, 2013 @ 8:26 pm

Avoidance is legal; evasion is not.

When you take out an IRA or 401K, you do that to get the tax benefits. Yet you criticize Gates and Buffett for doing the exact same thing.

Posted by anon on Apr. 04, 2013 @ 6:56 am

They write the laws to make legal what should be criminal, because someohow these people always manage to get by with paying a pittance. No wonder Buffet's million dollar reward to any billionaire who can show that he pays a higher tax rate than his secretary, goes uncollected.

But even de jour (as opposed to merely de facto) tax evasion goes unpunished. Not long ago, a whistleblower at a Swiss bank uncovered hundred of billions in money that the federal government was owed by high profile tax evaders, and turned them in to the FBI. Some of the names on his list were reportedly well-known captains of industry and high government officials. So what did the government do? They covered up the names and gave them an amnesty. The only one ever prosecuted was the whistleblower himself.

Posted by Greg on Apr. 04, 2013 @ 7:44 am

He admits that Buffett is engaged in tax avoidance (legal) and not tax evasion (illegal).

But then claims that there is (of course) a vast right-wing conspiracy to help the wealthy evade taxes anyway.

Except this. The IRS focuses nearly all their audits on the wealthiest taxpayers. Why? Because that is where there is the most tax to be collected if evasion is detected.

But hey, Greg, feel free to not contribute to your IRA or 401K to build your tax credibility here. Or try and get laws passed to change the tax rules. But you cannot blame Buffett for feeling that he can do more good with 1005 of his wealth than the government can with 40% of it.

Posted by Guest on Apr. 04, 2013 @ 9:47 am

The SFBG is really going whacky now. So apparently the SFBG would much rather see Gates et al., not give so much away to charity and good works, but instead, pass the wealth on to the kids so that the govt. can tax the snot out of it. Int he mean time, hoarding the money to increase the amount of taxes collected. Idiocy. Thank goodness they are going forward with their charities- thanks to their work, thousands if not millions of lives are being changed.

Posted by Whackamole on Apr. 04, 2013 @ 7:20 am

giving your money away, either to charity, or to whomever you wish, while you are alive.

For that matter, spending it avoids Estate Tax, as does sending it to people or entities overseas.

What Tim fails to understand is that people do not trust the government, and do not want to see their money going to the givernment if that can be easily and legally avoided.

I trust people I know to use the money more wisely than I trust a committee of bureaucrats to do that. So if I had enough wealth for Estate Tax to be a problem, I'd give it away at a certain age, to ensure that the money i have worked hard for goes to a cause I prefer, and not to what a government official wants for it - probably to prime his pension plan.

Posted by Guest on Apr. 04, 2013 @ 7:28 am

SFBG, why don't you spend more time reporting criminal like JULIET ELLIS on SFPUC? She is taking our city tax money for her own benefits on top of her high paying salary.

Matier & Ross beat you every time.

Posted by Guest on Apr. 04, 2013 @ 7:45 am

Why do you allow guest postings as 99% of them are trolls?

Posted by steelhead on Apr. 04, 2013 @ 3:52 pm

In practice, nobody posts with their real name or identity here, so the issue is moot.

The one big advantage of using the SFBG-provided default of "Guest" is that it stops others stalking or imp'ing you. Otherwise you should be focusing on the message and not the messenger anyway.

Posted by Guest on Apr. 04, 2013 @ 4:10 pm

And not to a buncf Republicans at all?

The CC is fairly liberal.

Posted by Guest on Apr. 06, 2013 @ 8:45 am