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Add to FavoritesOpposition to the estate tax (or death tax, to its opponents) is mystifying to me. Currently, the estate tax applies when an individual leaves an estate worth over $2 million and this will increase to $3.5 million in 2009. According to the IRS, less than 1% of estates pay any estate tax at all. Considering the outcry over how President Bush's tax cuts were "mostly for the rich," I'm amazed that that repealing a tax that impacts ONLY the rich has any support at all!
Because it applies only to a small number of wealthy people, opponents of the estate tax have had to appeal to emotion and distortion to stir up popular opposition to the tax. Calling it the "Death Tax" makes it seem as universal as death, as opposed to the more accurate description "Tax on Really Rich People."
Opponents of the tax also raise the specter of families being forced to sell small businesses or farms in order to pay taxes on them. However, no opponent of the estate tax has been able to find a single example of a family that had to sell a farm due to the estate tax. Most farms are just not that big, and the same is true of small businesses. Of those farms and businesses that are worth more than the $2 million, most of the owners have sufficient liquid assets to cover the taxes. And before you mention the "land poor" farmer who happens to own over $2-$3.5 million in land but doesn't have money in the bank (a rare creature indeed), the exemption rises to $4.1 million if the heirs agree to work the farm for 10 years.
Under current tax law, the estate tax will go away in 2010 and return in 2011. In the year without the estate tax, the IRS estimates that $56 billion in revenue will be lost. This money needs to be accounted for, and that can only be done by increased borrowing, increased taxes, or reductions in spending. Personally, I favor a reduction in government spending whether the tax is repealed or not. However, anyone who has seen how our government operates will know that the odds of a spending cut are pretty much zero.
So if the estate tax is repealed permanently, the government will replace the billions in lost tax revenue either by borrowing more money (bad), or increasing taxes on millions of people, rich and not (worse). Or, the estate tax can remain, continuing to impact only the estates of the wealthiest and most able to pay.
The choice seems clear.
Learn more about this author, David Janke.
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Yes
The death tax is also called the estate tax. And what exactly is this death tax?
Well, as the name implies, it is a tax levied on the estate of a deported soul.
In simple English, what this means is this: a man dies and the government takes some of the money he has left to those that survive him.
Now, I ask you this simple question should the death tax be abolished? The answer is an emphatic Yes! And the reasons are clearly articulated below.
1. It is double taxation:
We have a very efficient tax system in the United States of America. So it is assumed that as long as we are alive and employed we all pay our taxes. Now, if a man has spent a life time paying his taxes, I don't see why his corpse should pay any more tax after his death. This, in my view, amounts to a double taxation.
2. It is unfair:
The death tax is clearly unfair. A man dies and his children are mourning. The government simply compounds their misery by demanding and taking the very unpopular death tax. This shows extreme lack of sympathy and is in very bad taste too.
3. It is very unpopular:
Okay, let's be honest here. Most people would prefer not to pay their taxes if they have a choice. But the truth is that after a while, it becomes clear to us that taxation is not such a bad idea generally. The government uses the money in the interest of society. However, the death tax is about the most unpopular form of taxation for most people. It is simply unacceptable as compared to value added tax (VAT) or income tax which makes sense to most people.
4. It discourages enterprise:
Let's face it, American society is noted for the twin concepts of democracy and capitalism. It therefore follows that in this land of opportunities, you are encouraged to make as much money as you can. Legally, of course. Now, the government decides to punish you when you die by taking away some of that money. This, in my opinion, will discourage the spirit of enterprise and capitalism for which we are known.
5. It is unnecessary:
The death tax is clearly unnecessary. The government already has a number of other taxes that bring in huge revenues on a regular basis. Therefore, there really isn't any reason to tax the dead. The way I understand it, you tax a guy who is working or running a business. There is no money making in the grave anyway so don't tax the dead.
Abolish the death tax. Now!
Learn more about this author, Emmanuel Osondu.
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