During a discussion of Republican Presidential candidates on ABC’s “The View”, Whoopi Goldberg said, “I’d like somebody to get rid of the death tax. That’s what I want. I don’t want to get taxed just because I died.” The studio audience started applauding, but she wasn’t done. “I just don’t think its right,” she continued, “If I give something to my kid, I already paid the tax. Why should I have to pay it again because I died?”
Excuse me? Whoopi happens to be one of Hollywood’s most consistent liberal voices. She certainly does a lot of charitable work, having hosted made for TV benefits that raise millions of dollars for the needy. I haven’t heard whether Whoopi has endorsed any particular candidate running for President, as has Barbara Streisand and Oprah, but my guess is that Mitt Romney, Mike Huckabee and Rudy Giuliani aren’t at the top of her list.
It’s obvious that Whoopi has recently visited her estate planning attorney, who presumably broke the bad news that Whoopi needs a wallop of elaborate estate planning to minimize the tax. Like most of us, upon discovering that Uncle Sam is in line to take upwards of 45% or more of her estate that is beyond the current $2 million exemption at the time of her death without her taking proactive measures, Whoopi called it “unfair”.
When co-host Joy Behar responded to Whoopi’s remarks by saying “Only people with a lot of money say that,” Ms. Goldberg shot back, “No, I don’t’ think so… It’s doesn’t matter if you have or don’t have money. Once you paid your taxes, it should be a done deal. You shouldn’t have to pay twice.”
Was Whoopi’s rant her Marie Antoinette (let them eat cake) moment? I don’t think so. It truly says something when a liberal Hollywood icon believes that a tax is not evenhanded. But there exist many examples of unfair taxes in our Internal Revenue Code. I’ve pointed out quite a few in the eight years that I have been writing this column.
Several years ago, for example, I invested in a tax preparation franchise. I can tell you that I received quite the education about our tax code. In my estate planning practice I deal mostly with high net worth families. The tax franchise’s customer base, in contrast, consisted of low income people (taxpayers are not the correct word since most of these folks pay no taxes) who filed early in order to cash in on “tax refund loans”. It never occurred to me that millions of our citizens who pay nothing in income taxes receive gifts of several thousand dollars every tax filing season through various credits and other tax programs, such as the child tax credit, dependent care credit, hope and lifetime learning credits and other giveaways.
While I believe that certain individuals need assistance and that there ought to be government programs to help those truly in need, in my observation these tax credits are nothing more than disguised government welfare programs that lack the oversight to ensure that those who really need the help are getting the help. Fraud evidently runs rampant in these refund giveaways. I heard stories of divorced customers who would run to file their taxes first to claim their child’s social security number as a dependent. I found all of this rather unsightly, and this was but one reason that I sold my interest in the franchise back to the company.
But poor people who choose to have lots of kids aren’t the only ones receiving tax subsidies and giveaways. The Wall Street Journal reported in an editorial December 11th that 562 residents of Manhattan (that would be in New York City, not Manhattan, Kansas) received farm subsidies last year. These nonresident farmers own the land, but lease it to giant corporations that farm it. Of course there are many other abuses. These tax giveaways are inherently unfair to those of us who pay income taxes, self employment taxes, FICA taxes, Medicare taxes and capital gains taxes. We pay into the system only to see it flood out the back end every year.
While I applaud Whoopi for bringing an unfair tax into the light of scrutiny, it also strikes me that Whoopi doesn’t shout about other tax giveaways that aren’t fair to working folks, just the one that might apply to her estate one day.