Stupid Rule; Stupid Republicans

by Laurence M. Vance
Feb. 23, 2012

One of the stupidest, most asinine, and most evil things that Americans will encounter this tax season is the gift tax.

According to the IRS:
The gift tax is a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return. The tax applies whether the donor intends the transfer to be a gift or not.

The gift tax applies to the transfer by gift of any property. You make a gift if you give property (including money), or the use of or income from property, without expecting to receive something of at least equal value in return. If you sell something at less than its full value or if you make an interest-free or reduced-interest loan, you may be making a gift.
How bad does the IRS want to tax you for giving someone a gift? Here is your answer: "The general rule is that any gift is a taxable gift. However, there are many exceptions to this rule. Generally, the following gifts are not taxable gifts."
  • Gifts that are not more than the annual exclusion for the calendar year.
  • Tuition or medical expenses you pay for someone (the educational and medical exclusions).
  • Gifts to your spouse.
  • Gifts to a political organization for its use.
  • In addition to this, gifts to qualifying charities are deductible from the value of the gift(s) made.
And what is the annual exclusion amount? Again, according to the IRS: "All of the gifts made during the calendar year to a donee are fully excluded under the annual exclusion if they are all gifts of present interest and they total $13,000 or less."

My, how generous is the federal government! As long as you don’t give someone a gift worth over $13,000 then you don’t have to pay any gift tax.

But why do we have a gift tax in the first place? Don’t we already pay taxes on the money we earn? Why should we be taxed again just because we give away money instead of spend it? Is this not double taxation? Of course it is. But the federal government loves taxing money twice. Is there a tax deduction for Social Security and Medicare taxes paid? Of course not. Are dividends taxed after corporations already paid taxes on their profits? Of course they are.

The reason why we have a gift tax is because we have an estate tax. Without a gift tax, the rich could give away all their money before they die and thus avoid paying the estate tax. But what’s wrong with that? Haven’t they already paid taxes on not only the money they earned, but also on their capital gains and interest they received? For more on the estate tax, see my article "A Libertarian View of the Estate Tax."

The rule that you cannot give away to someone more than $13,000 in a year without paying a gift tax is a stupid rule.

Stupid rule; stupid Republicans.

Republicans? How can I possibly blame this stupid rule on Republicans? Hasn’t the gift tax been around since 1932?

First of all, let’s be clear why I am singling out the Republicans. It is Republicans that talk about cutting taxes, not Democrats. It is Republicans that talk about limiting government, not Democrats. It is Republicans that talk about smaller government, not Democrats. It is Republicans that talk about getting the government out of our lives, not Democrats. This doesn’t mean that Republicans really believe any of these things, but they are the ones talking about them, not Democrats.

The Republicans gained a majority in the House and Senate in the third year of Clinton’s first term as president. This was the first time that the Republicans had controlled the entire Congress since the 83rd Congress of 1953-1955 under President Eisenhower. The Republicans could have put a bill to repeal the gift tax on Clinton’s desk every day. When Clinton refused to sign it, they could have garnered enough public opinion in support of repealing the gift tax so that Clinton was forced to sign it. The Republicans made absolutely no attempt to do so. Instead, all we heard from them were excuses about needing a larger, veto-proof majority in Congress or a Republican in the White House to ensure the passage of Republican bills.

Well, they got their Republican president in 2000 and what happened to the gift tax? Absolutely nothing. Why wasn’t the elimination of the gift tax made part of the Bush tax cuts? The Republicans controlled the Congress and the presidency from the inauguration of George Bush on January 20, 2001, until May 24, 2001, when Republican senator Jim Jeffords switched from Republican to independent. After the 2002 election, the Republicans regained control of the Senate. The Republicans lost both the House and the Senate in the 2006 election. This means that for four years without interruption the Republicans controlled the Congress and the White House. If ever in history the gift tax could have been repealed then that was the time. But it wasn’t repealed any more than any other wealth redistribution scheme was repealed. Instead, the government grew by leaps and bounds. It is not government that Republicans want to limit, make smaller, and get out of our lives, it is only government controlled by Democrats.

The late Sam Francis (1947-2005) used to call the Republican Party the Stupid Party. Is there any doubt that he was entirely correct?
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Laurence M. Vance [send him mail] writes from Pensacola, FL. He is the author of Christianity and War and Other Essays Against the Warfare State and The Revolution that Wasn't. His newest book is Rethinking the Good War. Visit his website.

Copyright © 2012 by LewRockwell.com.













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