I took a pleasant drive up to Winnetka with my family yesterday afternoon, stopping by one of my favorite houses, the Harold Ickes Estate, which has been on the market for well over a year now. No open house yesterday, but still a commanding property held long ago by FDR‘s (somewhat power-mad) Secretary of the Interior.

The property is listed for $6 Million, which prompted me to think of the tax implications of high priced real estate vs. the number of Obama signs in the neighboring yards in Winnetka.

Sen. Obama has proposed thwarting some class-angst demon by re-instating the 55% tax on estates valued at $1 Million or over at the time of the owners death. He has voted for the estate tax 3 times, and campaigned against relief calling estate tax relief the “Paris Hilton Tax Break”.

$1 Million does not get you that far in Winnetka, as the median house goes for around $800,000 in town, and an empty lot is around $700,000. So most anyone who dies owning his own home in Winnetka, with $200,000 in her retirement can look forward to paying $550,000 in taxes and the derision of our Democratic candidate for President who thinks you are like Paris Hilton if you are a responsible homeowner.

Secretary Ickes estate would have a $3,300,000 tax bill due, if the owner died while holding the estate, which is not much to look forward to. It is quite conceivable that the heirs to many of the charming houses of Winnetka, even the ones with the Obama signs in front of them, will need to sell their homes to support Sen. Obama’s thirst for tax revenue.

Small businessmen have known for years that it makes little sense to improve your business as you age, given that the estate tax will swallow the majority of any gains from the improvements AND the underlying equity itself. Homeowners should study the same lesson. At the 55% tax rate Sen. Obama has supported it makes very little sense to give more than half your house to the Federal Government so that a politician can score point at your expense.

Sen McCain has proposed increasing the estate tax exemption and reducing the rate, moves that while welcome to homeowners and small businesses, misses the economic point. People are still penalized for investing in their own businesses and homes, albeit at a much more tolerable rate than Sen. Obama’s proposals.