by Bobby Watson

Created on: December 02, 2008   Last Updated: December 12, 2008

The estate tax in the United States is a tax enforced on the transfer of the "taxable estate" of a deceased person, usually by a will, or according to the state laws of intestacy. This tax is one part of the Unified Gift and Estate tax system in the United States. For over a decade many people have referred to it as the "death tax". The estate tax is protected by the gift tax, which prevents avoidance of the estate tax should someone want to give away his/her estate just before dying. If an asset is left to a spouse or charity organization, the tax usually does not apply.

Your "Gross Estate" may consist of cash and securities, real estate, insurance, trusts, annuities, business interests and other assets. Presently, the estate tax only impacts the wealthiest 2 percent of all Americans. In addition to the federal government, quite a few states also enforce an estate tax, with the state version called either an estate tax or an inheritance tax. Since 1976, the federal transfer tax system has included an estate tax and gift tax. The basis of these tax laws can be tracked to as early as 1789 to 1915. Development of the modern estate and gift taxes took place from 1916 through 1975.

The estate tax in 2008 and 2009 is now 45% and desinated for repeal in 2010. Unfortunately, when it is repealed it has always eventually be reenacted. Today's economy has been in recession for over a year and is getting worse, perhaps we should take another look at this tax system. Pressident-elect Obamahas already shown opposition to repealing the estate tax. The support for any changes or extended repeal of this tax system in U.S. government

The estate tax is a great way to make certain that those in the aristocracy, and that end up ruling over us, deserve to rule over us. There is always going to be an aristocracy, but I want it to be those who really are better than us, not necessarily those who's parents were better than ours. In 2009, the exclusion amount of an "Gross Estate" will go from 2,000,000 to 3,500,000. If there are states that were considering of enacting their own inheritance taxes, I think it's safe to say that our economy must stabilize before any states even think about taking this action.

In spite of the fact that this tax system affects such a small number of Americans, the term "death tax", usually used by the opposition, has increased ten fold. Most Americans see a tax on things that have already been purchased, (homes, property, valuable assets), as unfair and in some way, a form of double taxation. With all the billions being spent on stimulus packages of every shape and size, I think that any surplus revenue our government collects should be used to pay off the budget deficit and take us out of recession. There are other ways that will prove to do this more effectively. In an environment where public opinion is more important than ever, this topic doesn't get a lot of attention. Americans have a new and different set of priorities.

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