19 Feb John Hancock Ad Reflects What’s Wrong with Our World
A John Hancock (big life insurance company) ad ran in the Wall Street Journal yesterday depicting a hypothetical dialogue between a middle-aged sister and brother. Here is what it says:
Sarah: Saw Bob today.
Dave: Heard his father passed. So sad. Did Bob and Sue take over the house? That was the plan.
Sarah: No, they had to sell. Estate taxes.
David: Man …
Sarah: So, what would happen to Mom’s house.
The implication in this ad is that a house is a part of a family’s legacy. Part of a person’s legacy.
Think about this!
A house is a thing – not a legacy. It is not one of the important things in life. This materialistic thinking is what’s wrong with the world today.
The important things in life – i.e. a legacy, is your memories, reputation, character, love, care, hard work, industry, creativity, self expression, a close family, a heritage of community service or philanthropy, etc. Agree?
John Hancock also implies in their ad that estate taxes are an injustice. Don’t get me started. Child abuse is an injustice. Mentally ill living on the streets is an injustice. Prejudice is an injustice.
Of course nobody likes to pay taxes. Government spending is out of control and something needs to be done, lord help us all.
But the premise behind the estate tax is sound. Financial dynasties are not good for America and those that have thrived financially in our free market system can share a percentage of their spoils. Yes, if your estate is very large the dollars of tax will add up. But hey, what do you expect? The poor don’t have dollars at all. Want to trade places with them? And if you don’t like it, vote for less government spending so fewer taxes need to be raised to pay the bills.
Do you hear me?
No estate pays even a single dollar of estate taxes if the estate is under $3.5 million in value (2009 tax law). If, for example, an estate is worth $4.5 million then the total estate tax would be about $400,000. So, a net $3.1 million would pass to the heirs of the estate (2009 law, and it’s going down).
Does this sound like a family tragedy?
If Bob’s family had to sell a house to pay estate tax in 2009, the only reason would be that the estate was over $3.5 million in value and had little or no LIQUID assets available to pay the tax. If we assume that Bob’s fathers’ estate was worth $4 million, the tax bill in this case might be around $150,000.
Consider this as well – Bob’s mother and father both have an estate tax exemption available to them. So, under 2009 tax law, they together could have an estate of $7 million and PAY NO ESTATE TAX.
Call me liberal if you will, but our government pays a hell of a lot of bills – defense, roads, bridges, telecommunications, charity, social security — and it’s the “all taxes are bad” mentality that has (in addition to the lack of restraint on spending) resulted in massive deficits and national debt.
Shame on John Hancock. It’s just this kind of spin that gives like insurance agents a bad reputation