Monday, January 18, 2010

Federal and Ohio Estate Taxes: Where they came from, where they are going and why

Federal and Ohio Estate Taxes: Where they came from, where they are going and why by Marc Stolarsky, M.A., J.D.
Marc L. Stolarsky Law. LLC
Tel. No. 440-655-2343
Email: MARC@MLSLaw.Net
Web Site: www.MLSLaw.Net
January 19, 2010

The estate tax has existed for thousands of years in ancient Egypt, but some still argue that it is unfair. Often the philosophical debate on estate taxes pits those who have the means to pay, but don't want to, against those who stand to benefit.
This article will examine the estate tax in the following order of subjects: (1) defining what is estate tax; (2) where it came from in world history; (3) it's origins and development in the United States; (4) the present and future condition of the U.S. federal estate tax; (5) the history of the Ohio estate tax; (6) the debate over the tax: for and against; (7) how democracy is being hurt by tremendous inequality of wealth; (8) how the estate tax can raise money, ameliorate unequal wealth and help the poor; (9) the argument against the Ohio estate tax; and (9) the future of the Ohio tax. It will conclude with my recommendation as to what should be done.
The advocates of the federal and state estate tax believe that democracy is strengthened when great wealth is redistributed to the poor while it funds important social programs and lowers the deficit. Opponents make these arguments: the estate tax is double taxation; that a capitalist economy should not be involved in redistributing wealth; it takes assets out of the economy and wastes it with dead end federal programs; it penalizes those who have had success and rewards those wh are lazy; it is an almost insignificant percentage of the taxes collected; it lowers the standard of living of the heirs of a decedent,; and the programs it funds create a dependent class.
Opponents of the Ohio estate tax repeat the same arguments as those against the federal tax and add these: that Ohio is losing residents to other states with lower estate taxes; that the loss of wealthy residents is lowering Ohio's productivity; that the lower population leads to less political clout in Congress and less dollars from federal programs.
The three questions I will analyze and answer in this paper are these: (1) Should government have a federal and an Ohio estate tax; (2) Should government redistribute personal assets of a decedent's estate to fund social programs; and (3) What should the estate tax be in the future.
I. Definition of the estate tax
Concise Encyclopedia defines estate tax this way:
[It is a l]evy on the value of property changing hands at the death of the owner, fixed mainly by reference to its total value. Estate tax is generally applied only to estates whose value exceeds a set amount, and it is applied at graduated rates. defines estate tax this way: "A tax imposed on the right to transfer property by inheritance and assessed on the net value of a decedent's estate before distribution to the heirs."
The amount of the estate tax to be paid is usually a percentage of the decedent's gross estate. However, it can also be the total assets of an estate at the time of death, which may be a different amount.
Estate tax is unique from all other taxes in the way it is assessed and how it is used. It is placed upon the estate of a deceased person as it passes to their heirs, beneficiaries, legatees, etc. It can be used to raise revenue and to redistribute wealth. It can potentially be leveled upon an estate by any branch of government, be it federal, state, or local. It is an excise tax as it is not a direct tax on property, but is levied on the transfer of the property at the time of death.
The term estate tax is sometimes used interchangeably with the terms inheritance tax and death tax among others. However, there is a distinction between them. While they all arise upon the death of an individual, an estate tax is against the personal representatives of the deceased, while an inheritance tax is against the beneficiaries of the estate. This distinction is not always understood and sometimes ignored which confuses the discussion.
The term "death tax" has been used since the 19th century and may refer to all taxes in the arena: estate, inheritance, succession, etc. It could also refer to something more specific like the term used in the Internal Revenue Code. More recently, the use of the term was popularized by Jack Faris of the National Federation of Independent Business when Newt Gingrich was Speaker of the House of Representatives. It is a neologism used by estate tax opponents as a propaganda tactic to argue for its repeal. It has extreme negative connotations that conger up thoughts of unfair taxation.
There are other taxes that are similar to estate taxes, but are slightly different in the way they are determined; who is responsible for paying; and when they are assessed. In an "inheritance tax" or "legacy tax", the tax is paid by the person receiving the asset and based on the amount that received. The "wealth tax" , sometimes used in interchangeably with the term "death tax" or "privilege tax", is a normative tax that may be set by a legislative body on what they consider to be extreme wealth. The term "death duty" may also be used interchangeably with the other terms.
Ohio estate tax is separate from federal estate tax, determined by adding up the entire gross estate, essentially everything of monetary value, to get a total amount. That includes real property, personal property or anything else of value. When it transfers to another person upon an Ohio resident's death or the death of a person who has an Ohio asset, it is taxed. States may have a "sponge tax" which allows states to collect the tax credit to the federal estate tax and it is discussed in more detail in section VII below.
II. Ancient history of estate tax
The estate tax and similar taxes have been used for thousands of years. It was first used in ancient Egypt in 700 B.C. to place a 10 percent tax any land transfers at the time of death. In Rome in the first century A.D., Augustus Caesar placed an inheritance tax on the person who was receiving the property if they were not a close relative. The Ancient Greeks also had a similar tax. In the Middle Ages the transfer tax was the cost assessed by the English King for permitting the estate of one of his deceased subjects to transfer the use of property (because the king owned all the land) to another subject. In the 19th century, European governments adopted several different types of estate taxes.
The modern estate tax was first instituted in Great Britain in 1889 as part of a broad death tax program. Most countries of the world followed suit and now have an estate tax payable at the time of the decedent's death.
III. History of the United States estate tax
Estate taxes and their like were first used in the United States as a temporary measure to defray the costs of going to war. In 1797, the United States Congress imposed a legacy tax to pay for the new navy President John Adams had petitioned for to prepare for war. This tax was on all “testamentary dispositions, descents and successions to the estates of intestates excepting those to parents, husbands, wives or lineal descendants” and included stamp duties. In 1802, it was repealed when the threats of war subsided.
In 1862, to raise money to pay for the Civil War , Congress passed an inheritance tax on personal property being transferred from the estate of the deceased to the new owner. It did not apply to any transfers of real property and person receiving the property was responsibility to pay the tax. In 1864, Congress renewed the tax, increased the amount to be taxed and added real estate to the list of items being levied. In 1870, they repealed this tax since the Civil War had ended five years earlier. While it did raise some revenue, the total amount “barely generated revenue for the federal government”.
In 1894, Congress passed an all-encompassing tax that included a tax on income, gifts and inheritances, but it was later struck down by the Supreme Court. In Pollock v. Farmers’ Loan & Trust Company, 157 U.S. 429 (1895) , the United States Supreme Court held the law as unconstitutional because it was in violation of the direct clause tax in Article I, Section 2 of the Constitution that stated, “representatives and direct taxes shall be apportioned among the several states” . It also violated Article I, in Section 9 that provides: “No capitation , or other direct, tax shall be laid, unless in proportion to the census or enumeration herein before directed to be taken.” This decision may have been more political then anything, the Court afraid to uphold the law in a time when the estate tax was being opposed.
In 1898, to pay for the Spanish-American War , Congress enacted the "The War Revenue Act of 1898" or "Modified Estate Tax , which was a death, inheritance and gift tax, but not specifically an estate tax. This was a tax on estates and inheritances to non-spouse beneficiaries that included a higher tax if the decedent's estate was of great value. Two years later it was challenged in Knowlton v. Moore, 178 U.S.41 (1900), as being a direct tax as prohibited by the U.S. Constitution. The U.S. Supreme Court affirmed Congress's right to create this tax, holding that it was not a direct tax because,
“. . . death is the generating source from which the particular taxing power takes its being and that it is the power to transmit, or the transmission from the dead to the living, on which such taxes are more immediately rested” and that it was in fact an excise tax and was constitutional as it was uniform. The Courts rationale to uphold the law was probably based on its desire to raise capital and present a united front in the war effort.
The law was also challenged for being a progressive tax that violated the Fourteenth Amendment's due process and equal protection clauses, an argument also rejected by the Court. It was repealed in 1902, after the war ended.
As a result of Pollock , the Sixteenth Amendment to the Constitution was enacted in 1913, giving Congress the authority to lay and collect taxes, including an estate tax. The Sixteenth Amendment states that: " The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration." In 1916, Congress passed "The Revenue Act of 1916" to pay for the First World War military mobilization. This law had aspects that were similar to modern laws, it was graduated and better administrated then ever before. It had an exemption of $50,000 with a graduated tax scale from one to 10 percent (for estates over $5,000,000). For the first time the estate tax was not repealed after the war ended.
In addition to the preparation for war, legislators also saw the need for the 1916 law for an additional reason: with the rapid industrialization from 1870 to 1916 suddenly there were extremes of wealth that could be redistributed. The Ways and Means Committee determined that this new tax would alleviate the burden from those who were struggling economically and take a portion of the assets of those with greater means to pay. They stated that the new estate tax would mean that " . . . a larger portion of our necessary revenues [would be]collected from the incomes and inheritances of those deriving the most benefit and protection from the Government”. From 1920 to 1940, the tax was used to redistribute wealth, at times taking up to 77 percent of the largest estates.
In New York Trust v. Eisner, 256 U.S. 345 (1921) , the U.S. Supreme Court upheld the federal estate tax rejecting the argument that the 1916 estate tax was an unconstitutional interference with state's rights to regulate descent and distribution. However, the tax had huge loopholes that enable decedent's estates to avoid the tax by giving life-time gifts to heirs and beneficiaries and passing the assets to grandchildren (also known as generation skipping).
In 1976, Congress passed the Tax Reform Act (P.L. 94-455), merging the estate tax with the gift tax and offering one graduated exemption for all taxable transfers made during a person's lifetime. They also enacted the generation skipping transfer tax to impose the tax on those passing assets to grandchildren. These measures effectively closed most of the loopholes that had been left open to avoid the tax. Before it's repeal in 2001, this tax could take as much as sixty percent of a decedent's gross estate.
In 1981, riding his conservative mandate President Ronald Reagan's pushed Congress to pass the Economic Recovery Tax Act of 1981 (P.L. 97-34). The most significant change was the unlimited marital deduction for estate and gift taxes. It also raised the gift tax exclusion to $10,000 and raised the wealth transfer exemption to $600,000. Before this change, the exemption had been at $60,000 in the 1976 Act. While this was a significant change, it came at a time when the economy was stronger making the need to raise revenues less necessary.
In 2001, the United States Congress passed the sweeping Economic Growth and Tax Relief Reconciliation Act (or EGTRRA) that changed the existing estate tax laws and is still in existence today (although that might change any day now if Congress's passes a bill to modify estate tax). Using a gradual nine-year plan, the law altered the rates of estate tax exclusions and gift tax exclusions (among other things). The table here below, shows how planners of the law gradually changes the yearly exemption and the percentage taxed:

2001 $675,000 55 Percent
2002 $1,000,000 50 Percent
2003 $1,000,000 49 Percent
2004 $1,500,000 48 Percent
2005 $1,500,000 47 Percent
2006 $2,000,000 46 Percent
2007 $2,000,000 45 Percent
2008 $2,000,000 45 Percent
2009 $3,500,000 45 Percent
2010 None None
2011 $1,000,000 45

One very significant provision of EGTRRA law is the "sunset provision" that was causes the law to automatically come to an end on January 1, 2011 This was to avoid the "Byrd Rule" that blocks any legislation that would unreasonably increase the federal deficit for more then ten years. However, if Congress failed to pass another bill before that time, the law would revert back to pre-EGTRRA laws.
IV. The present and future of the federal estate tax
President Barack Obama has been working with select Democratic congressional members to pass legislation to that would re-institute some estate tax for 2010 and thereafter. In May 2009, he had the U.S. Treasury Department publish a pamphlet called the “General Explanations of the Administration’s Fiscal Year 2010 Revenue Proposals” (or the “Green Book”). It proposed that for 2010 and after, estate taxes should be at the 2009-level, which means the exemption ceiling would be at $3.5 million and tax up to 45 percent of the gross estate. It is estimated that this would raise $3 billion for the federal government.
The House and Senate have introduced bills with mirroring the President's suggested guidelines. On November 22, 2009 Rep. Earl Pomeroy [D-ND] introduced H.R. 4154, the "Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act of 2009" into the House of Representatives. It was voted and passed on December 3, 2009.
On November 17, 2009, S.2784 was introduced by Senators Thomas R. Carper [D-DE] and George V. Voinovich [R-OH]. Because the Senate has been embroiled in the health care debate, this bill has not been voted on as yet.
In a December 2, 2009 Associated Press article, it speculated that these or a bill with similar guideline would pass making the exemption 3.5 billion and taxing at a rate of 45 percent. Married couples would have a total exemption of $7 million from the estate tax.
V. History of the Ohio Estate Tax
In 1893, the first Ohio inheritance tax was enacted during Governor McKinley's Administration , placing the burden to pay the tax on the person inheriting the asset. It wasn't until 1968, that Ohio replaced this with an estate tax and shifted the burden to the decedent's estate to pay the tax.
Effective on September 29, 2000, Ohio Revised Code Section 5731.02, "Rate of Tax - Credit" taxes on sliding scale the estates of every Ohio resident dying after July 1, 1968. This is the current law in Ohio. This table below shows the tax rates of the Ohio Estate tax without any of the tax credits:

Taxable Estate Bracket Tax Rate
Not over $40,000 2% of taxable estate
Over $40,000 but not over $100,000 $800 + 3% of excess over $40,000
Over $100,000 but not over $200,000 $2600 + 4% of excess over $100,000
Over $200,000 but not over $300,000 $6600 + 5% of excess over $200,000
Over $300,000 but not over $500,000 $11,600 + 6% of excess over $300,000
Over $500,000 $23,600 + 7% of excess over $500,000

Of all of the states, Ohio has the highest and most burdensome estate tax taxing the middle class rather then adopting the strategy of the other states that only to tax the wealthiest estates. Because of tax credits permitted for most estates, Ohio begins taxation at the amount of $338,333. The State also allows a marital deduction equal to the value of the asset passing to the surviving spouse.
The Ohio estate tax is a minor portion of in the total of all the taxes collected. In 2006, of the $27.1 billion dollars in taxes Ohio colleted, only about one percent was from the state estate taxes or $272 million. The total revenues for the general fund in Ohio was $20,248,225,935.00, but only $54,070,007.00 was from estate taxes, which works out to .2670% of total State revenue.
VI. State "Sponge Tax"
Before it was outlawed, Ohio, like many states that still collect estate taxes, exercised the "sponge tax" by taking a percentage of the federal estate tax already demanded. The decedent's estate could take a credit against the federal estate tax for estate taxes paid to the state. Pre-the passage of EGTRRA in 2001, 36 states had sponge taxes. However, EGTRRA phased out the right of the states to use the sponge after 2005. Ohio General Assembly officially repealed Ohio's sponge tax in 2005 when then Governor Bob Taft signed H.B. 66.
VII. The debate over estate taxes
The rich political history of the United States is replete with protest against what has been considered to be unfair taxation. The slogans against taxation are legendary: "No taxation without representation" ; "The power to tax is the power to destroy" ; and "Nothing is so sure as death and taxes" . One of the most significant events in this country's history was the Boston Tea Party which was a reaction of the Colonists to the unfairness of the stamp duty the tax by the British Empire in 1765. More recently we have witnessed the modern "tea parties" organized by people objecting to all taxes.
The discussion over what should be done about estate tax has been politicized, heated and sometimes illogical in many ways. Politicians have made political capital doing things like using terms like "death tax" to anger voters. Some have even stooped to having press conferences in funeral homes as a backdrop. Democrats and Republicans have used the same statistics to prove opposite points. One example is to site the amount the tax has collected to show its value or lack thereof. For several years legislators were able to tell the media that there would be no estate tax in 2010, knowing full well that they would probably pass a new estate tax bill for 2010.
There is no shortage of opponents to the estate tax and their arguments for its repeal. It is an unfair tax that infringes on the personal control of assets. The tax income, sales, etc. is an accepted evil, but a second tax added onto estates after death is unfair. The value of an estate is diminished thus lessening influence during life and after death. The taking assets from a decedent's estate lowers their heirs and beneficiaries standard of living. It is a way government bureaucrats use to punish someone who has worked hard and become wealthy. The estate tax is based in Marxist philosophy that is anathema to the capitalist ideal. The amount of tax that the federal estate tax subjects about one to two percent of Americans raising a tiny percentage of the total revenue. The estate tax as an unfair way to destroy private capital that in the end is going to hinder economic growth. . The estate tax hinders productivity when residents move to another state that has more favorable taxes. (See section X below.)
VIII. How unequal great wealth hurts democracy
Proponents of American capitalist ideal tout the concept that if government is free of burdensome regulations, everyone has ability to be rich and successful. President Ronald Reagan believed with hard work we all had the chance to be wealthy: "What I want to see above all is that this remains a country where someone can always get rich." Contrary to this, even with hard work it would take incredible luck and/or significant talent to rise above middle class standards. In fact, in the United States it is harder to move up then in most other capitalist countries.
In recent years a higher percentage of wealth has been accumulated by smaller percentage of people, leaving the majority of American's at the bottom disenfranchised. Because the top one percent in wealth controls about 40 percent , the wealthy have a disproportionately greater influence in our democracy. Wealthy individuals and businesses have tremendous influence because they have the means to hire lobbyists, purchase ads, and make huge contributions to campaigns.
In Aristotle's Politics , he says that for a democracy to be effective, there must be, (1) an avenue for all citizens to participate; and (2) they must take an active role in it. Aristotle believed that without relative social equality, including "moderate and sufficient property" for all citizens, democracy was impossible. If there were great extremes of rich and poor, the wealthy would amass tremendous power and influence and work toward their own self-interests.
Today the fabulously wealthy, by the shear weight of their tremendous assets, have power and influence that dwarf that of an average citizen. In his article entitled "Redistribute the Wealth? Yes, But Not What Obama Proposes", Paul Street sums it up this way:
[T]he privileged American Few aren’t content to own a disproportionate share of U.S. wealth. They and their imperial planners seek to control as much of the world’s treasure and resources (petroleum reserves in particular) as possible.

One example of how unequal wealth leads to unequal power, is how some financial institutions contributed big dollars to political campaigns and were rewarded. The Emergency Economic Stabilization Act of 2008 , also known as the Troubled Asset Relief Program (or TARP) passed at the urging of then-President George W. Bush, is a 2008 program of the United States government to purchase assets and equity from financial institutions to strengthen its financial sector. Most of the $700 billion in assets were to address the subprime mortgage crises.
President Obama asked the Congress for even more funds to bail out the financial industry. Of the fifteen top contributor's to President Obama's 2008 campaign, six of them (one is now gone) are financial firms:
Ranking on List Name of Institution Amount Contributed
- No. 2 Goldman Sachs $743,000
- No. 4 Citigroup $500,000
- No. 6 JP Morgan Chase $478,000
- No. 9 UBSAG $419,000
- N0 10 Lehman Brothers 392,000
(filed for bankruptcy protection

- No. 15 Morgan Stanley $344,000

Another way that the wealthy industrialists use their resources is to persuade legislators to wage wars for their own profits. In a war, the government can funnel money to the wealthy that are in control of this country's natural resources, factories, transportation, etc. In 1936, in a book by Daniel Guérin, entitled Fascism and Big Business , he first outlined, “an informal and changing coalition of groups with vested psychological, moral, and material interests in the continuous development and maintenance of high levels of weaponry, in preservation of colonial markets and in military-strategic conceptions of internal affairs.” .
In his "Farewell Address" President Eisenhower called this Guérin concept the "military-industrial complex". In a parting speech as he prepared to leave the White House warned against this possibility:
In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. [Emphasis added]

When before the First World War this country maintained a small peacetime military, now this country maintains a massive force that accounts for 47 percent of the world's total arms expenditures. Many of this countries state and local governments are dependant on military dollars. For instance, a Washington State economist in 2002 estimated that in Western Washington the military was responsible for 166,000 jobs or 15 percent of the workforce being employed, an amount of $7.06 billion. These numbers are not unusual and are consistent in other areas as well.
Says Paul Street about this:

[W]ar, militarism, arms sales, and conquest are lucrative investments in and of themselves. The Pentagon budget is a giant public subsidy — a powerful mechanism of regular public wealth transfer to the high-tech corporate sector.

Unfortunately, the mutation of democracy that Aristotle warned us about where the wealthy have disproportionate influence has come to fruition.
IX. Redistributing the wealth to retain a healthy democracy
The philosophy of Social Darwinism , has been used by the wealthy and powerful to justify their disproportionate accumulation of tremendous wealth while ignoring the poor, hungry, elderly, sick and needy. Sometimes known as "natural selection" or "survival of the fittest" , this is the theory that government should stay out of the socioeconomic arena, and allow every person to fend for themselves, sinking or swimming alone.
Similar to this, is the theory of "lezze-faire" economics espoused by political economics philosophers to claim that there should be a free flow business unencumbered by government interference. They believe that there is an "invisible hand" that will adjust to all economic issues and eventually business will prosper more efficiently without government interference, thus benefiting everyone.
Followers of these theories believe that any assistance given to the individual make them week and dependent on welfare.
Since the collapse of the economy led to the Great Depression of 1929, the country has adopted many of the principles of the welfare state and become more responsive to each citizen's individual needs. While there are still disagreements as to how much government should do, it has developed and funded myriad social programs effectively ended the cycle of poverty for some.
An estate tax can be used to redistribute the large pool of individual wealth to the people sitting at the lower part of the socioeconomic chart. Says Susan K. Hill, author of Leaping Before We Look?: Repeal of the Estate Tax Credit and the Consequences for States, Americans, and the Federal Government, estate tax is one way, " ... to reduce the wealth being amassed by powerful families, thereby avoiding the creation of a hereditary aristocracy in this country. . ."
The redistribution of wealth is not a new concept and has been supported throughout history by many Americans an non-Americans alike including but not limited to Adam Smith , Alexis de Tocqueville , Thomas Jefferson , Wilhelm von Humboldt , John Stuart Mill , , and John Dewey. (There is also a contingent of thinkers that opposes the redistribution of wealth i.e. Alexander Hamilton, George W. Bush, George H.W. Bush, Ronald Reagan, William McKinley, etc.)
One proponent of wealth redistribution was Thomas Jefferson , who said,
"I am conscious that an equal division of property is impracticable. But the consequences of this enormous inequality producing so much misery to the bulk of mankind, legislators cannot invent too many devices for subdividing property, only taking care to let their subdivisions go hand in hand with the natural affections of the human mind. Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise. Whenever there is in any country, uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right. The earth is given as a common stock for man to labor and live on."

James Madison, who had originally wanted government to “protect the minority of the opulent against the majority,” came to the realization that this country could be threatened by too much wealth and power if it was amassed by a few. In the1790's, he denounced the “daring depravity of the times [as] the rising class of business people become ‘the tools and tyrants’ of government, overwhelming it with their force and benefiting from its gifts”. Madison three ways to have a healthy democracy:
(1) By establishing a political equality among all;
(2) By withholding unnecessary opportunities from a few, to increase the inequality of property, by an immoderate, and especially an unmerited, accumulation of riches; and
(3) By the silent operation of laws, which, without violating the rights of property, reduce extreme wealth towards a state of mediocrity, and raise extreme indigence towards a state of comfort.

It was Franklin Roosevelt who as President from 1933 to 1945, who's New Deal pushed Congress to pass an avalanche of legislation authorizing the spending federal funds to end the Depression and establish the modern welfare state . It is ironic that Franklin D. Roosevelt , who's family had amassed tremendous wealth , was in favor of such a distribution. However, although Roosevelt was wealthy, was willing to share his own wealth to help the needy. He said, "The transmission from generation to generation of vast fortunes by will, inheritance, or gift is not consistent with the ideals of the American people."
Most recently, in his campaign for President last year, then Senator Barack Obama told “Joe the Plumber” the following about redistributing assets:
It’s not that I want to punish your success. I just want to make sure that everybody who is behind you, that they’ve got a chance for success too. My attitude is that if the economy’s good for folks from the bottom up, it’s gonna be good for everybody … I think when you spread the wealth around, it’s good for everybody. [Emphasis added]

Although he did make this liberal statement, as President, Obama has distanced himself a bit from this statement because of political necessity to move toward the center.
X. The argument against the Ohio estate tax
The Ohio estate taxes against the upper and middle estates has injured the State by losing: (1) residents to other states with lower estate taxes (2) residents it loses their productivity; (3) population which determines representation in the House of Representatives ; and (4) federal funding. .
One example of how it is being hurt by the migration out of Ohio can be seen the story of legendary late-U.S. Senator Howard Metzenbaum (a legendary political liberal who served Ohio in the Senate in 1974 by appointment and then 1976 - 1995). In 2002, he changed his domicile to Florida to avoid the steep Ohio estate tax. Metzenbaum, who had made millions owning parking facilities, wanted to pass along all of his fortune to his heirs. By becoming a Florida resident just before his death, Metzenbaum avoided the high Ohio taxes and Ohio lost revenue and a productive, important resident. This is not an unusual occurrence.
The Estate Planning, Trust, and Probate Law (“EPTPL”) Section of the Ohio State Bar Association, has recommended for several years that the State of Ohio lower the state's estate tax. Ohio needs to reassess its estate tax and determine if it wants to continue taxing the middle class at such a high rate and tax the large estates at the risk of losing residents and their resources.
XI. The future of Ohio estate tax
Many states are phasing out the estate tax. Of the 51 jurisdictions of the United States (including the District of Columbia), about half states, have estate taxes ( or 25 to be exact). Six of these will end their estate tax in the next few years. Should Ohio be one of these that are ending the estate tax?
In 2001, some Ohio legislators tried to end the estate tax, but were defeated due to a huge lobbying effort of municipalities. In 2006, the EPTPL recommend to the General Assembly H.B. 589, which if it had passed, would have increased the state tax exemption to be equal to the federal levels. That bill was reintroduced in 2007, but it again filed to be enacted after Governor Strickland announced he was prepared to veto any such measure.
In the Spring of 2009, H.B. 61 was introduced by sponsors Jay Hottinger and Cheryl Grossman in the Ohio General Assembly. This bill was designed,
"To reduce the estate tax by increasing the credit amount, to authorize townships and municipal corporations, or electors thereof by initiative, to exempt from the estate tax any estate property located in the township or municipal corporation, and to distribute all estate tax revenue originating in a township or municipal corporation that does not exempt property from the tax to the township or municipal corporation."

This bill would permit the local municipalities to assess estate tax that is now the right of the state government. It is likely that it would be organized much like the RITA tax, but a central body to benefit each town, city and village. It is currently in the House Ways and Means Committee and its possibility of passage it unclear.
In September 2009, the Ohio chapter of the Americans for Prosperity filed petition with 1,000 signatures asking that there be an initiative on the Ohio Ballot in November 2010 to repeal the estate tax. If this petition is approved the group will be required to collect 120,683 valid signatures to be certified by the Ohio Attorney General. The group has until the first Monday in January 2010 to turn in these signatures.
Thus far it is unclear what will happen in Ohio and if it will retain the estate tax as is, change it, or extinguish it altogether.
Both Federal and Ohio estate tax exemption should be set at $3.5 million at the rate of 45 percent to redistribute the wealth of those that have accumulated tremendous assets, fund social programs that help those in need, and give certainty to those trying to draft their estate plans.
First, the estate tax is an excellent way to keep wealth and power from being amassed in the hands of a small percentage of individuals. Without this distribution of wealth, it becomes more and more difficult for the poor and middle class to move up on the socioeconomic ladder as they have fewer avenues politically and in the businesses world. A redistribution of the huge amounts of wealth will give everyone more access to government and more of a chance to "make it" economically.
Second, while estate tax raises a small percentage or revenues, it can be significant in these difficult times. Natural and made-made disasters have caused the budgets to be strained and maximizing revenue imperative: the Bush II tax cuts , the recession of the U.S. economy , natural calamities like hurricane Katrina , the wars in Iraq and Afghanistan , the automakers collapse , Wall Street debacle , collapsing banks , and subprime mortgage crisis . At this time the deficit is at astounding amount of $12,090,547,788,483.00 , and likely to go higher so additional revenues are always a good thing.
Finally, the federal and state legislators should institutionalize the law to eliminate uncertainty about the future. Because no one knows for sure what the estate tax law will be, they cannot plan what to do with their estate assets once they die. Every time the estate tax laws change, estate planners will have to write a new estate plan making predictability impossible. At the moment however, estate planners are at the mercy of legislators that may have other motives dictating what they do with the laws.

Why Is the Estate Tax so Controversial? Jens Beckert, Published online: 12 September 2008.



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A Federal or state tax imposed on the manufacture and distribution of certain non-essential consumer goods.

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Newton Leroy "Newt" Gingrich (born Newton Leroy McPhersn; June 17, 1943) is an American politician who served as the Speaker of the United States House of Representatives from 1995 to 1999.

Homer Gets a Tax Cut: Inequality and Public Policy in the American Mind.

Federal Estate and Gift Taxation, John K. McNulty, 5th Ed, West Publishing Co., St. Paul, Minnesota, p.1. (1994).

A wealth tax is generally conceived of as a levy based on the aggregate value of all household holdings actually accumulated as purchasing power stock (rather than flow), including owner-occupied housing; cash, bank deposits, money funds, and savings in insurance and pension plans; investment in real estate and unincorporated businesses; and corporate stock, financial securities, and personal trusts. Edward N. Wolff, "Time for a Wealth Tax?", Boston Review, Feb-Mar 1996.

"The term 'excise tax' and 'privilege tax' are synonymous. The two are often used interchangeably." American Airways v. Wallace, 57 F.2d 877, 880; Jurisdictions may have an estate tax that functions similarly to the that in the U.S., but just use a different term: the term inheritance tax is used in the Untied Kingdom, Ireland, and U.S. states Iowa, Indiana, Kentucky, Maryland, Nebraska, New Jersey, Oklahoma, Pennsylvania and Tennessee; some jurisdictions use the term "death duty" like Hong Kong, Bermuda and Canada; some jurisdictions have a gift tax arising at the transfer or property at death like Austria; other terms "rights of succession" in Belgium, "taxes on beneficiaries" in the Czech Republic, "rights of succession" in France.

Death duty is tax on inherited property.;
In some jurisdictions the term used is death duty, and for historical reasons that term is used colloquially - although it is no longer correct legally - in the United Kingdom and some Commonwealth nations.

Ohio Revised Code Section 5731.01(A). 19 Ohio Prob. L.J. 26 Probate Law Journal, September/October 2008, Nuggets and Nuances: Ohio Estate Tax Issues, Audits, Tax Apportionment and a Plea for Reform, William J. McGraw, III, Esq., Dungan & LeFevre Co., L.P.A., PLJO Editorial Advisory Board.


The Rise and Decline of the Estate Tax, 11 Tax L. Rev. 223 (1946). Mary R. Wampler, Repealing The Federal Estate Tax: Death to the Death Tax, Or Will Reform Save The Day?, 25 Seton Hall Legis. J., 525, 527 (2001).

John R. Luckey, "A History of Federal Estate, Gift and Generation-skipping Taxes," Congressional Research Service, March 16, 1995, and Martha Britton Eller, "Federal Taxation of Wealth Transfers, 1992-1995," SOI Bulletin, Winter 1996-97; Barbara A. Hauser, Death Duties and Immortality: Why Civilization Needs Inheritances, 34 Real Prop. Prob. & TR. J. 363, 380 (Summer 1999).

Gaius Julius Caesar Augustus (September 23, 63 BC – August 19, AD 14) was the first emperor of the Roman Empire, which he ruled alone from 31 BC until his death in AD 14.

Barbara A. Hauser, Death Duties and Immortality: Why Civilization Needs Inheritances, 34 Real Prop. Prob. & TR. J. 363, 367 (Summer 1999).

Anton-Herman Chroust, Estate Planning in Hellenic Antiquity: Aristotle’s Last Will and Testament, 45 Notre Dame Lawyer 629 (1969).

The Middle Ages of European history is a period of international history covering roughly a millennium in the 5th century through 16th centuries.

Barbara A. Hauser, Death Duties and Immortality: Why Civilization Needs Inheritances, 34 Real Prop. Prob. & TR. J. 363, 372-76 (Summer 1999).

See footnote ii above;

John Adams (October 30, 1735 – July 4, 1826) was an American politician and the second President of the United States (1797–1801), after being the first Vice President (1789–1797) for two terms.

The Quasi-War was an undeclared war fought almost entirely at sea between the United States and France from 1798 to 1800. In the United States, the conflict was sometimes also referred to as the Franco-American War, the Undeclared War with France, the Undeclared Naval War, the Pirate Wars, or the Half-War.;; John Adams, David McCullough, Simon & Schuster , New York , New York , (2001).

Knowlton v. Moore, 178 U.S. 41 (1900).

Barbara A. Hauser, Death Duties and Immortality: Why Civilization Needs Inheritances, 34 Real Prop. Prob. & TR. J. 363, 375 (Summer 1999).

The American Civil War (1861–1865), also known as the War Between the States and several other names, was a civil war in the United States of America. Eleven Southern slave states declared their secession from the United States and formed the Confederate States of America (the Confederacy).




See footnote xlii above.

Federal Estate and Gift Taxation, John K. McNulty, 5TH Ed., West Publishing Co., St. Paul, Minnesota, p.3, (1994) .


U.S. Constitution, Article I, Section 2, Clause 3.

A capitation tax is an assessment levied by the government upon a person at a fixed rate regardless of income or worth. Since it is a tax upon the individual, and not upon merchandise, a capitation tax is frequently labeled a head tax. A poll tax is a capitation tax.

Article I, Section 9; Pollock v. Farmers’ Loan & Trust Company, 157 U.S. 429 (1895).

The Spanish–American War was a military conflict between Spain and the United States that took place between April and August 1898, over the issues of the liberation of Cuba.

The War Revenue Act of 1898 imposed another death tax in order to raise revenues to finance the Spanish-American War. The 1898 death tax was a form of estate tax, levied upon the value of all personal property included in a decedent's gross estate. Property passing to a surviving spouse was excluded from the tax, and a $10,000 specific exemption excluded small estates. The tax rates were graduated from 0.74 percent to 15 percent, taking into consideration both the size of the estate and the degree of kinship of the decedent and the beneficiaries.


Federal Estate and Gift Taxation, John K. McNulty, 5TH Ed., West Publishing Co., St. Paul, Minnesota, p.2, (1994).

The Constitution requires in Article I, Section 8 that “the duties, imposts, and excises shall be uniform throughout the United States ” and that direct taxes must be apportioned. Knowlton v. Moore, 178 U.S. 41, (1900).

The Fourteenth Amendment (Amendment XIV) to the United States Constitution, along with the Thirteenth and Fifteenth Amendments, was adopted after the Civil War as one of the Reconstruction Amendments on July 9, 1868.

Due process alternatively due process of law or the process that is due, is the principle
that the government must respect all of the legal rights that are owed to a person according to the law. Due process holds the government subservient to the law of the land, protecting individual persons from the state.

The Equal Protection Clause, part of the Fourteenth Amendment to the United States Constitution, provides that "no state shall ... deny to any person within its jurisdiction the equal protection of the laws". U.S. Constitution, Amendment 14;

The Court relied on holdings in prior cases that the right to take property by devise or descent is a creature of law, thus conditions on it may be imposed. This tax was upheld in Knowlton v. Moore, 178 U.S.41 (1900).

Pollock v. Farmers’ Loan & Trust Company, 157 U.S. 429 (1895).

The Sixteenth Amendment states: " The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."

United States Constitution, Sixteenth Amendment.

The 2 percent bracket had previously applied to income below $20,000. That amount was lowered to $2,000. The top bracket (on income above $2 million) was raised from 15 percent to 67 percent. The act was applicable to incomes for 1917;

Federal Taxation of Income, Estates and Gifts, Boris I. Bittker, Lawrence Lokken, 2nd Ed., Warren, Gorham & Lamont, Boston, Massachusetts, (1993);


The business boom opened up many opportunities for financial gain. The economic activity it generated enabled many people to establish successful businesses, expand existing ones, and profit from investments. Some business leaders and investors were able to amass huge fortunes. The number of millionaires in the United States grew from perhaps about 20 in 1850 to more than 3,000 in 1900.

Federal Taxation of Income, Estates and Gifts, Boris I. Bittker, Lawrence Lokken, 2nd Ed., Warren, Gorham & Lamont, Boston, Massachusetts, (1993).

The Committee of Ways and Means is the chief tax-writing committee of the United States House of Representatives and has jurisdiction over all taxation, tariffs and other revenue-raising measures, as well as a number of other programs.

The Committee on Ways and Means of the U.S. House of Representatives explained that “a new type of tax was needed, because the consumption taxes in effect at that time bore most heavily upon those least able to pay them”. The Rise and Decline of the Estate Tax, Louis Eisenstein, 11 Tax Law Rev. 230-231 (1956).


New York Trust v. Eisner, 256 U.S. 345 (1921)


The U.S. Generation-skipping transfer tax imposes a tax on both outright gifts and transfers in trust to or for the benefit of unrelated humans more than 37 and a half years younger than the donor or to related persons more than one generation younger than the donor, such as grandchildren; See IRS Form 709 Instructions; Federal Taxation of Income, Estates and Gifts, Boris I. Bittker, Lawrence Lokken, 2nd Ed., Vol. 5 Warren, Gorham & Lamont, Boston, Massachusetts, p. 120-2, (1993).


1976, Congress passed the Tax Reform Act (P.L. 94-455).

Id.; Internal Revenue Code Section 2601 (1990). Gift tax rates effectively began at 37 percent on cumulative taxable.

The limitation on the marital deduction was increased to the greater of $250,000 or one-half (1/2) of the decedent’s gross estate. The Act also increased the $60,000 estate tax exemption to $175,000.

Charles P. Rettig, Recent Legislation Aims to Replace the Estate Tax with a Modified Carryover-Basis Tax Regime, 24 L.A. Law. 32, 33-34 (Nov. 2001).

Ronald Wilson Reagan (February 6, 1911– June 5, 2004) was the 40th President of the United States (1981–1989) and the 33rd Governor of California (1967–1975).

The Economic Recovery Tax Act of 1981 (also known as ERTA or the Kemp-Roth Tax Cut) was "A bill to amend the Internal Revenue Code of 1954 to encourage economic growth through reductions in individual income tax rates, the expensing of depreciable property, incentives for small businesses, and incentives for savings, and for other purpose." Pub.L. 97-34, 95 Stat. 172, enacted August 13, 1981).

Federal Estate and Gift Taxation, John K. McNulty, 5th Ed., West Publishing Co., St. Paul, Minnesota, p.10, (1994).

Economic Recovery Tax Act of 1981 (P.L. 97-34).

To Praise the Estate Tax, Not to Bury It, Michael Graetz, 93 Yale L.J. 259, p. 3 (1983).

Pub.L. 107-16, 115 Stat. 38, June 7, 2001.

The Act would also repeal the generation-skipping tax in 2010 as well.

By including this sunset provision, the law avoided the Byrd Rule that would give Senators the right to block any legislation that would unreasonably increase the federal deficit for more then a ten year period of time.

The Byrd rule originated on October 24, 1985, as an amendment offered by Senator Robert C. Byrd to the Consolidated Omnibus Budget Reconciliation Act of 1985. The temporary rule was extended and modified over time and made permanent in 1990 as Section 313 of the Congressional Budget Act of 1974 (2 U.S.C. 644); Under the Byrd rule, the Senate is prohibited from considering extraneous matter as part of a reconciliation bill or resolution or conference report thereon. The definition of what constitutes "extraneous matter" is set forth in the Budget Act;




Barack Hussein Obama II; born August 4, 1961) is the 44th and current President of the United States.,



H.R. 4154.

The tally of the voting was 225 yeas (all Democrats) and 200 nays (of which all 174 Republicans voted no with 26 Democrats). Nine votes were no (six Democrats and three Republicans).

When on December 8, 2009, this writer inquired of Drey Samuelson, Senator Tim Johnson's [D-SD] Chief of Staff what Congress is likely to do about estate taxes, the response was: "... this is currently before Congress, but god knows how it will end up—it’s very uncertain." [Emphasis added]
E-mail from Dreyfus Samuelson, Chief of Staff for Sen. Tim Johnson [D-SD], December 8, 2009.


William McKinley Jr. (January 29, 1843 – September 14, 1901) was the 25th President of the United States. Before that however, he was Governor of Ohio from 1891 to 1896.;; 19 Ohio Prob. L.J. 26 Probate Law Journal, September/October 2008, Nuggets and Nuances: Ohio Estate Tax Issues, Audits, Tax Apportionment and a Plea for Reform, William J. McGraw, III, Esq., Dungan & LeFevre Co., L.P.A., PLJO Editorial Advisory Board.

The new law passed on July 1, 1968, was modeled after the federal law that required the estate to pay the estate tax. Id.; III;

17 Ohio Prob. L.J. 125.


This is from an Ohio Department of Transportation report in 2006. 19 Ohio Prob. L.J. 26 Probate Law Journal, September/October 2008, Nuggets and Nuances: Ohio Estate Tax Issues, Audits, Tax Apportionment and a Plea for Reform, William J. McGraw, III, Esq., Dungan & LeFevre Co., L.P.A., PLJO Editorial Advisory Board.

The general fund in a government account is the total amount after including all assets and liabilities that are not assigned to other purposes.

See footnote cxvi.

17 Ohio Prob. L.J. 161, Ohio Probate Law Journal, May/June 2007, Reforming the Ohio Estate Tax, Robert M. Brucken, Esq.

For example, if a decedent's estate was valued at $2,000,000 in 2001 the estate tax would have been $675,000. If the state had no estate tax then the state estate tax would be zero, but the sponge tax would be $99,600 which would go to the state making the amount that goes to the federal government $460,000 totaling $560,250.

See footnote cxix.



"No taxation without representation" began as a slogan in the period 1763–1776 that summarized a primary grievance of the British colonists in the Thirteen Colonies.

This principle was recognized by Chief Justice Marshall in the case of Providence Bank v. Billings 4 Pet. (29 US) 514 (1830), argued 11 Feb. 1830, decided 22 Mar. 1830 by vote of 7 to 0; Marshall for the Court in which he held that in the absence of express stipulation or reasonable implication to the contrary in its charter, the bank was subject to the taxing power of the State, notwithstanding that

The Boston Tea Party was a direct action by colonists in Boston, a town in the British colony of Massachusetts, against the British government. On December 16, 1773, after officials in Boston refused to return three shiploads of taxed tea to Britain, a group of colonists boarded the ships and destroyed the tea by throwing it into Boston Harbor. The incident remains an iconic event of American history, and reference is often made to it in other political protests..

A stamp duty was for the administrative costs of probating an estate and was carried out by putting a stamp on the probate documents when the property was transferred to the new party. It was not based on a percentage of the estate or the asset, but rather a pre-set cost.

The Stamp Act of 1765 (short title Duties in American Colonies Act 1765; 5 George III, c. 12) was a tax imposed by the British Parliament on the colonies of British America. The act required that many printed materials in the colonies carry a tax stamp. Morgan and Morgan pg. 96-97;

The tea parties of 2009 were a result of the Obama Administration's initiatives to spend more money to help the economy, do in debt and raise taxes.

33 Ohio N.U. L. Rev. 61, Ohio Northern University Law Review, 2007, Tax Articles, Let's Protect Our Economy and Democracy From Paris Hilton: the Case For Keeping the Estate Tax.

The Rise and Decline of the Estate Tax, 11 Tax L. Rev. 223 (1946).

See footnote cxxx.

Michale J. Graetz & Ian Shapiro, Death By a Thousand Cuts: The Fight Over Taxing Inherited Wealth 206 (Princeton University Press 2005);

See Michale J. Graetz & Ian Shapiro, Death By a Thousand Cuts: The Fight Over Taxing Inherited Wealth 206 (Princeton University Press 2005).

Id. Death By a Thousand Cuts: The Fight Over Taxing Inherited Wealth 206 (Princeton University Press 2005); 36 Wkly. Comp. Pres. Doc., at 1986 (Aug. 31, 2000); In 2000, President Bill Clinton vetoed a bill that would have repealed the estate tax, stating that such a law would only benefit about 2 percent of the taxpayers and more then half the benefits of the repeal would go to one-tenth percent of the families. ;As we will see later, the fact that this small number of taxpayers will ever be subject to the estate tax has been used by both proponents and opponents of repeal. See 36 Wkly. Comp. Pres. Doc., at 1986 (Aug. 31, 2000). According to President Clinton, the estate tax should be kept because it fell on a small segment of the population. Proponents of estate tax repeal took the opposite view and argued that it should be eliminated because the amount of taxes raised was too low.


Another estimate is that the top one percent of the population controls the same amount of wealth as the bottom 90 percent. -.


Aristotle, Politics;


Secretary of the Treasury under Presidents attacked the estate tax for just such a reason. It would have been hard for there to be democracy in Aristotle's world as the government sanctioned slavery and the disenfranchisement of women.


Paul Street (born 23 May 1958) is an American journalist, author, historian, and political commentator. He has a doctorate in U.S. History from Binghamton University.
Street served as both the Director of Research and Vice President for Research and Planning at the Chicago Urban League from 2000 to 2005. He is the author of four books: "Racial Oppression in the Global Metropolis: A Living Black Chicago History" (New York: Rowman & Littlefield 2007); "Segregated Schools: Educational Apartheid in the Post–Civil Rights Era" (New York: Routledge 2005); "Empire and Inequality: America and the World since 9/11" (Boulder: Paradigm 2004).
His latest book is "Barack Obama and the Future of American Politics" (Boulder: Paradigm Oct. 2008).


Public Law 110-343.


The Obama administration planned to extend the life of the $700 billion financial bailout fund until next October. One unnamed Administration official said it was expected to pledge to use no more than $560 billion from the fund.

Public Papers of the Presidents, Dwight D. Eisenhower, 1960, p. 1035- 1040.

Daniel Guérin, in his 1936 book, about the fascist government support to heavy industry. It can be defined as, “an informal and changing coalition of groups with vested psychological, moral, and material interests in the continuous development and maintenance of high levels of weaponry, in preservation of colonial markets and in military-strategic conceptions of internal affairs” Fascism and Big Business, Daniel Guérin,1936.

Fascism and Big Business, Daniel Guérin,1936.

"Farewell Address." In The Annals of America. Vol. 18. 1961-1968: The Burdens of World Power, 1-5. Chicago: Encyclopaedia Britannica, 1968..

Public Papers of the Presidents, Dwight D. Eisenhower, 1960, p. 1035- 1040.


"Redistribute the Wealth? Yes, But Not What Obama Proposes", Paul Street

Social Darwinism refers to various ideologies based on a concept of competition among all individuals, groups, nations, or ideas drives social evolution in human societies. Johnson, D. Paul (2008). "The Historical Background of Social Darwinism". Contemporary Sociological Theory. Berlin: Springer. pp. 492. ISBN 0387765212. "In the social realm the competitive struggle may be among individuals or among different groups within society, different societies, or different racial or ethnic populations."

Natural selection is the process by which heritable traits that make it more likely for an organism to survive and successfully reproduce become more common in a population over successive generations. It is a key mechanism of evolution.

"Survival of the fittest", a term coined by anthropologist Herbert Spencer, or "The Gospel of Wealth" theory written by Andrew Carnegie.

An Inquiry into the Nature and Causes of the Wealth of Nations (generally referred to by the short title The Wealth of Nations) is the magnum opus written by Scottish economist and moral philosopher Adam Smith and was first published in 1776. It is an account of economics at the dawn of the Industrial Revolution, as well as a rhetorical piece written for the generally educated individual of the 18th century - advocating a free market economy as more productive and more beneficial to society.

In The Wealth of Nations, Smith writes, "By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention."

The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s. Great Depression, Encyclopedia Britannica.

The "welfare state" is a model in which the state assumes primary responsibility for the welfare of its citizens.



Susan K. Hill, Leaping Before We Look?: Repeal of the Estate Tax Credit and the Consequences for States, Americans, and the Federal Government, 32 Pepp. L. Rev. 151, 157-58 (2004).

Adam Smith (June 16, 1723 – 17 July 1790) was a Scottish moral philosopher and a pioneer of political economy. One of the key figures of the Scottish Enlightenment, Smith is the author of The Wealth of Nations, is considered his magnum opus and the first modern work of economics. Adam Smith is widely cited as the father of modern economics. Hoaas, David J.; Madigan, Lauren J. (1999). "A citation analysis of economists in principles of economics textbooks". The Social Science Journal 36 (3): 525–532.

Alexis-Charles-Henri Clérel de Tocqueville (29 July 1805, Paris – 16 April 1859, Cannes) was a French political thinker and historian best known for his Democracy in America (appearing in two volumes: 1835 and 1840) and The Old Regime and the Revolution (1856).

Thomas Jefferson (April 13, 1743 – July 4, 1826) was the third President of the United States (1801–1809), the principal author of the Declaration of Independence (1776), and one of the most influential Founding Fathers for his promotion of the ideals of republicanism in the United States.

Friedrich Wilhelm Christian Karl Ferdinand Freiherr von Humboldt (June 22, 1767– April 8, 1835), government functionary, diplomat, philosopher, founder of Humboldt University in Berlin.

John Stuart Mill (May 20, 1806 – May 6, 1873), English philosopher, political theorist, political economist, civil servant and Member of Parliament, was an influential Classical liberal thinker of the 19th century whose works on liberty justified freedom of the individual in opposition to unlimited state control.

John Dewey (October 20, 1859 – June 1, 1952) was an American philosopher, psychologist, and educational reformer whose ideas have been very influential to education and social reform. Noam Chomsky, The Common Good, pp. 5-10;

Thomas Jefferson (April 13, 1743 – July 4, 1826) was the third President of the United States (1801–1809), the principal author of the Declaration of Independence (1776), and one of the most influential Founding Fathers for his promotion of the ideals of republicanism in the United States.

Thomas Jefferson to James Madison, 1785. ME 19:18, Papers 8:682.

Papers 14:197--98. See footnote cixxxvi.

Franklin Delano Roosevelt (January 30, 1882 – April 12, 1945), the 32nd President of the United States, was a central figure in world events during the mid-20th century, leading the United States during a time of worldwide economic crisis and world war.

New Deal legislation created new government agencies, such as the Works Progress Administration, the National Recovery Administration, the Social Security Act, etc.

The welfare state involves a direct transfer of funds from the public sector to welfare recipients, but indirectly, the private sector is often contributing those funds via redistributionist taxation; Encyclopedia of Political Economy. Ed. Phillip Anthony O'Hara. Routledge, 1999. p. 1245.

See footnote cixxxvi

One of the wealthiest and oldest families in New York State, the Roosevelts distinguished themselves in areas other than politics..

Samuel Joseph Wurzelbacher (born December 3, 1973), is more commonly known as "Joe the Plumber" was given that name during the 2008 U.S. presidential election after he was videotaped questioning then-Democratic candidate Barack Obama about his small business tax policy during a campaign stop in Ohio. Troy, Tom (2008-12-20). The Blade (Toledo, Ohio: Block Communications).

Redistribute the Wealth? Yes, But Not What Obama Proposes, by Paul Street / October 29th, 2008,

Those things that include income taxes, sales taxes, licensefees, and support of local churches and charities.

It is expected that the Ohio population loss will mean we will lose another seat in the U.S. House of Representatives.

Much of the federal funds given to states and municipalities are based on the population of an area as well as the number of Representatives that are seated in the Congress.

Howard Morton Metzenbaum (born June 4, 1917 – died March 12, 2008), served in the United States Senate in 1974 and then from 1976 to 1995. He was a Democrat and considered to be one of the leaders of the liberal contingent known as "Senator No" for his ability to block conservative oriented legislation.


19 Ohio Prob. L.J. 26 Probate Law Journal, September/October 2008, Nuggets and Nuances: Ohio Estate Tax Issues, Audits, Tax Apportionment and a Plea for Reform, William J. McGraw, III, Esq., Dungan & LeFevre Co., L.P.A., PLJO Editorial Advisory Board.

17 Ohio Prob. L.J. 125.

See footnote cci.


See Brucken at footnote cxix.


Id.; The Columbus Dispatch, "Estate tax under fire," September 9, 2009.

State Representative Jay Hottinger is now in his second term in the Ohio House of Representatives. He represents the 71st House District, which encompasses portions of Licking County.

State Representative Cheryl Grossman is currently serving her first term in the Ohio House of Representatives. She represents the 23rd House District, which includes Grove City, Hilliard, parts of Dublin, and other western portions of Franklin County.;

There self-appointed mission is the following: " Americans for Prosperity (AFP) and Americans for Prosperity Foundation (AFP Foundation) are committed to educating citizens about economic policy and mobilizing those citizens as advocates in the public policy process. AFP is an organization of grassroots leaders who engage citizens in the name of limited government and free markets on the local, state and federal levels. The grassroots members of AFP advocate for public policies that champion the principles of entrepreneurship and fiscal and regulatory restraint."

The Columbus Dispatch, "Estate tax under fire," September 9, 2009.


Ironically it was President Franklin D. Roosevelt who wanted to redistribute the wealth, even though he came from a family that ad accumulated great wealth, Isaac Shapiro, New IRS Data Indicate Rising Income Inequality, CBPP Says, 2005 TNT 200-18 (Oct. 18, 2005); see also Edward N. Wolff, Top Heavy: A Study of the Increasing Inequality of Wealth in America 1-2 (The Twentieth Century Fund Press 1995).

During George W. Bush's first term (2001-2004), he sought and obtained Congressional approval for tax cuts: the Economic Growth and Tax Relief Reconciliation Act of 2001, the Job Creation and Worker Assistance Act of 2002 and the Jobs and Growth Tax Relief Reconciliation Act of 2003. These acts decreased all tax rates, reduced the capital gains tax, increased the child tax credit and eliminated the so-called "marriage penalty", and are set to expire in 2011. The U.S. national debt grew significantly from 2001 to 2008, both in dollars terms and relative to the size of the economy (GDP), due to a combination of tax cuts and wars in both Afghanistan and Iraq. Budgeted spending under President Bush averaged 19.9% of GDP, similar to his predecessor President Bill Clinton, although tax receipts were lower at 17.9% versus 19.1%. FY 2009 Budget; CBO Historical Data. Ruth Carlitz & Richard Kogan, CBO Data Show Tax Cuts Have Played Much Larger Role Than Domestic Spending Increases in Fueling the Deficit (Jan. 31, 2005),; See also Edmund L. Andrews, Deficit Study Disputes Role of Economy, N.Y. Times, Mar. 16, 2004, at A18.

The Global Financial Crisis has been called by leading economists the worst financial crisis since the one related to the Great Depression of the 1930s. Reuters. Retrieved 2009-9-30, from Business Wire News. See Raymond J. Keating, Tax Cut Permanency: The Death Tax, Small Business & Entrepreneurship Council (Apr. 7, 2005),

Hurricane Katrina of the 2005 Atlantic hurricane season was the costliest hurricane, as well as one of the five deadliest, in the history of the United States. Janega, James (August 28, 2009). "Katrina victims rebuilding lives". Chicago Tribune.,0,6677067.story.

The Iraq War, also known as the Occupation of Iraq, The Second Gulf War or Operation Iraqi Freedom, is an ongoing military campaign which began on March 20, 2003, with the invasion of Iraq by a multinational force led by troops from the United States and the United Kingdom.

The War in Afghanistan is an ongoing armed conflict which began on October 7, 2001, as the US military's Operation Enduring Freedom that was launched, along with the British military, in response to the September 11 attacks.

The automotive industry crisis of 2008–2009 was a part of a global financial downturn. The automotive industry was weakened by a substantial increase in the prices of automotive fuels linked to the 2003-2008 energy crisis which discouraged purchases of sport utility vehicles (SUVs) and pickup trucks which have low fuel economy. The popularity and relatively high profit margins of these vehicles had encouraged the American "Big Three" automakers, General Motors, Ford, and Chrysler to make them their primary focus.

Doyle McManus (2008-09-24). "Americans reluctant to fund bailout, poll finds Americans reluctant to fund bailout, poll finds". Americans reluctant to fund bailout, poll finds.

Three important catalysts of the subprime crisis were the influx of moneys from the private sector, the banks entering into the mortgage bond market and the predatory lending practices of mortgage brokers, specifically the adjustable rate mortgage, 2-28 loan ; "Senator Dodd: Create, Sustain, Preserve, and Protect the American Dream of Home Ownership". DODD. 2007-02-07. Retrieved 2009-02-18. ; Bernanke-Four Questions-April 2009.

The subprime mortgage financial crisis is an ongoing real estate crisis and financial crisis triggered by a dramatic rise in mortgage delinquencies and foreclosures in the United States, with major adverse consequences for banks and financial markets around the globe. Bernanke-Four Questions-April 2009.
As of December 2009, the federal deficit is $12,090,547,788,483.00. The estimated population of the United States is 307,432,371 so each citizen's share of this debt is $39,327.50. The National Debt has continued to increase an average of
$3.84 billion per day since September 28, 2007.

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