Reuters released an article today explaining why many states want to go over the fiscal cliff. According to the unnamed genius who wrote the article, going over the cliff would increase the estate tax and let various states share in the resulting increase in revenue.
It never fails to amaze me how much false information gets pumped out to the public as "news". The Reuters report explains in a pedantic manner that the current estate tax law which levies 35% on estates above a $5 million exemption was signed into law by president George Bush in 2001. This, of course, is completely false. The current estate tax law was passed in 2010 by the Congress which was then under total Democrat control and then it was signed into law by president Obama. And to be clear, the Democrats did not just extend an earlier Bush era tax law at that time. The estate tax passed by the Democrats in 2010 was completely different than its predecessor.
That brings us to the central thesis of the Reuters article. Supposedly, California is hoping to go over the cliff because it may get $45 million in estate tax revenue. Of course, if the cliff leads to a recession, then the tax receipts in California from other taxes will probably decline by billions of dollars. No sane government would ever hope to lose billions in order to gain a few millions. Even the California government under Jerry Brown is not that crazy.
But hey, they printed all this in Reuters, so it must be true, right?
It never fails to amaze me how much false information gets pumped out to the public as "news". The Reuters report explains in a pedantic manner that the current estate tax law which levies 35% on estates above a $5 million exemption was signed into law by president George Bush in 2001. This, of course, is completely false. The current estate tax law was passed in 2010 by the Congress which was then under total Democrat control and then it was signed into law by president Obama. And to be clear, the Democrats did not just extend an earlier Bush era tax law at that time. The estate tax passed by the Democrats in 2010 was completely different than its predecessor.
That brings us to the central thesis of the Reuters article. Supposedly, California is hoping to go over the cliff because it may get $45 million in estate tax revenue. Of course, if the cliff leads to a recession, then the tax receipts in California from other taxes will probably decline by billions of dollars. No sane government would ever hope to lose billions in order to gain a few millions. Even the California government under Jerry Brown is not that crazy.
But hey, they printed all this in Reuters, so it must be true, right?
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