GOP GIVES PARIS HILTON $91M @ 2AM!
by David Grossman, Sat Jul 29, 2006 at 01:00:15 AM EDT
So the Republicans in the U.S. House stayed up until almost 2am tonight to give Paris Hilton some extra money (there's something funny about millions of dollars being showered on Paris Hilton in the dead of night, but I'll leave that joke for someone else to finish).
How much extra money? Try a cool $91,089,200.
Here's what happened a few hours ago, according to the Clerk of the House:
CURRENT HOUSE FLOOR PROCEEDINGS
LEGISLATIVE DAY OF JULY 28, 2006
109TH CONGRESS - SECOND SESSION
1:41 A.M. -
H.R. 5970: to amend the Internal Revenue Code of 1986 to increase the unified credit against the estate tax to an exclusion equivalent of $5,000,000, to repeal the sunset provision for the estate and generation-skipping taxes, and to extend expiring provisions, and for other purposes
Motion to reconsider laid on the table Agreed to without objection.
On passage Passed by recorded vote: 230 - 180, 1 Present (Roll no. 425).
Estate tax stuff sounds complicated, but it's really not that difficult to grasp. In a nutshell, estates over the exemption amount (note the five million figure referenced above) are taxed on a scale (first bunch of money taxed at X%, second bunch at Y%, and so on). Let's use our buddy Paris Hilton as an example, shall we?
According to Forbes magazine in 2005, the net worth of Barron Hilton is estimated at just over US $1 billion, of which Paris is expected to inherit a little over US $350 million.
Now, Paris has already made millions for herself through her acting, modeling and, well, being Paris, so even if her family decided to give all their money to charity, she ain't gonna be out on the streets anytime soon.
A couple things before I go into the calculations. I'm sure the exact dollar figure Paris will inherit changes daily since her family's money is most likely invested and not just sitting around in cash in a safe deposit box, so I'm going with $350 million as a figure for calculating Paris' inheritance. Also, to make things easier to explain, I'm treating Paris' inheritance as if she were the sole heir to a fortune of $350 million. In reality, both her pre- and post-legislation estates taxes would be ever-so-slightly higher due to the fact that Barron Hilton's estate is reportedly $1 billion and thus Paris would be splitting the initial exemption amount under either scheme with others.
Under the inheritance tax before 2003 or after 2010 (Bush put a temporarly partial roll-back on the estate tax into effect in 2001, but it "sunsets" after 2010), here's a breakdown of how much Paris Hilton would inherit (see tax chart here):
First $250,000 @ 41% = Tax of $102,500
Second $250,000 @ 43% = Tax of $107,500
First $500,000 @ 45% = Tax of $225,000
Second $500,000 @ 49% = Tax of $245,000
Third $500,000 @ 50% = Tax of $250,000
$7,184,000 @ 60% = Tax of $4,310,400
$338,816,000 @ 55% = Tax of $186,348,800
Total tax = $191,589,200
PARIS INHERITS $158,410,800
Under the inheritance tax scheme passed by the Republican-controlled U.S. House in the dead of night just a few hours ago, here's what she would get after the full implementation of the tax cuts, which are scheduled to be phased in and be in full effect on Jan. 1, 2015 (data from Reuters here):
First $20,000,000 @ Capital Gains Tax Rate (currently 15%) = Tax of $3,000,000
Balance of $325,000,000 @ 30% = Tax of $97,500,000
Total tax = $100,500,000
PARIS INHERITS $249,500,000
There ya have it folks. At nearly 2am, in the middle of the night, the Republicans in the U.S. House decided to give Paris Hilton a tax break worth $91,089,200. $91,089,200.
Sigh. If only Paris Hilton were an oil company, then she'd get even more.