George Steinbrenner Avoids Death Tax
As I noted over at OTB Sports and at my personal blog, Yankees owner George Steinbrenner passed away today after a massive heart attack.
Megan McArdle points out a political angle:
As a friend and fellow Yankee fan twitters, not only did Steinbrenner see to his succession planning well in advance, he’s also saved his heirs a bundle by dying in 2010:
As last act of succession planning (& for good of the team), George died in 2010 – his family won’t have to sell team to pay estate tax!
There’s actually a pretty solid body of evidence that the estate tax can affect the timing of deaths. Right before it goes up, wealthy people have a tendency to die early; right before it goes down, they live longer than expected. There’s always some dark muttering about heirs in the former case hastening the process, but you don’t really need to posit this. People do frequently live just long enough to see some important event–a beloved grandchild’s graduation or marriage, for example–than then expire quickly thereafter.
While I’m not sure that Steinbrenner planned for this to happen, it certainly is fortuitous for his family, and, potentially for Yankee fans because it’s worth noting the example of Joe Robbie, the owner of the Miami Dolphins, whose family was forced to sell the team to pay the tax on his estate. In that case, it appears that the family was the victim of very bad estate planning since Robbie could have created trusts that would have protected the family from the tax impact that forced the sale. Estate tax or not, though, I doubt Steinbrenner would have left anything to chance.
Why use that term? The tax is on his estate, not his death.
Let’s start a list of rich people we’d like to see avoid the death tax.
Oh yippee another multi millionaire has avoided paying any estate taxes. Let’s have a firework display to celebrate.
Let’s start a list of congressional screw ups and celebrate how arbitrary and inefficient government is.
It a tax applied at death so death tax works for me. How about no moral basis tax since I see no basis for taxing someone who uses no government services and isn’t around anymore.
Taxing the accumulated wealth of an expired person to support the environment that supplied the resources and infrastructure that made the accumulation of said wealth possible would appear to many to meet your “moral” qualification if such could be applied to any tax. Unless you’re one of those who defines moral as “good for me” and immoral as “bad for me.”
Which sort of shoots a hole in your entire thesis. The deceased isn’t being taxed because as you noted, he’s dead.
The folks who receive the windfall do pay a tax, just like anyone else who had $100.00 one day and $10,000,000 the next.
Years ago I did legal work for the NFL. Joe Robbie was a fine lawyer and I doubt he suffered poor estate planning advice. It was not uncommon for the heirs of a wealthy decedent to have to sell assets of the estate to pay the estate tax. You have to remember that the applicable deduction at the time was very low so the amount that could be sheltered by even the most astute estate planner was not great by todays standards, or even the standards of the day.
That person who passed already paid taxes once on that money and twice if it was a corporate dividend, why a second or third time is my point. Everyone should pay for the security and infrastructure a society provides but a tax such as this goes beyond that concept.
The deceased’s estate is being taxed, it is no burden on society. Like I said above the money the money has been subjected to taxation at least once already so why tax it again?
There’s only two assumptions that can be made based on your comments.
1. You are expecting an inheritance large enough to be impacted by the estate tax.
2. You are so immersed in Republican ideology that you will argue against your own best interests.
The money to run the country is going to come from somewhere–what doesn’t come from the estate tax might start coming out of your paycheck instead.
Those who reap the greatest benefits should put the most back in.
@ grampagravy –
Way to completely avoid addressing the substance of Steve’s argument.
Steve’s argument assumes that taxes were paid equitably and in full as our mythical fortune was accumulated. Given our tax codes and all the shelters and means available to dodge taxation, that’s not an assumption I am prepared to make. So, this makes his argument subjective in my mind and leads to “where are you coming from” in order to determine whether or not further discussion could possibly bear fruit. Also, Steve’s whole argument hinges on his perception of “moral” as he states, and “fair” as he implies, making his motives for arriving at his conclusions part of the argument.
Or, when a person uses what they believe to be true as a premise, it is fair to ask why they believe that.
Thank you for the opportunity to clarify this point.
Making assumptions is hazardous. You happen to be wrong on both counts.
My best interest is in a healthy economy and a fair system of taxation. Confiscating wealth through an estate tax on the assumption it may not have been taxed fairly when earned makes no sense at all. If less revenue comes in from no estate tax then cut spending, that doesn’t hurt me at all.
Those who reap the greatest benefit are those who need government help and cannot afford to put more back in. In Steinbrenner’s case he gave back through charitable contributions, employment of others, and the multiplier of spending his own money. His contribution to society through his success should be measured as a give back as should all businesses and businessmen.
It’s way past the time for business to no longer be vilified. Business and commerce make us what we are and provides what we have. Not just boats and cars but medicines and food, education and technology. Steinbrenner’s heirs are more likely to do good with his estate wealth rather than the government.
You’re doing it again.
“Confiscating wealth through an estate tax on the assumption it may not have been taxed fairly when earned makes no sense at all.”
Confiscating? Taxes are levied….not confiscated. I know, I know. Saying “confiscating wealth” instead of “taxing wealth” makes it sound really bad. (Which is why you have diehard libertarians crying “Taxes are theft” and diehard Marxist crying “Property is theft.” Wrong…on both accounts.)
Davebo’s right: ” The deceased isn’t being taxed because as you noted, he’s dead.
The folks who receive the windfall do pay a tax..”
As for your business complaints……..you’re thinking too narrowly here.
“It’s way past the time for business to no longer be vilified. Business and commerce make us what we are and provides what we have.”
Business. N. “a usually commercial or mercantile activity engaged in as a means of livelihood”
Commerce. N. “the exchange or buying and selling of commodities on a large scale involving transportation from place to place”
Inheritance: N. “the act of inheriting property.”
One of these things is not like the other……