There’s a saying that only two things are sure: “death and taxes.”
Well, there are lots of taxes while we are still alive. But is it fair to tax people again at death?
In 1916, Congress — desiring to raise more tax money (and also obviously acting through a sense of “envy”) — enacted an “estate tax.”
It didn’t bother some Americans then, or since, that some people had paid taxes all their lives and still had something left over at death that could then be taxed again.
Wouldn’t it be fair for people to pay their taxes during their lives — and then be able to leave what remained to their children or grandchildren?
The “death tax” had a confiscatory top rate of 45 per cent as of 2009. But not many people complained to Congress, because the tax hit only a small percentage of our citizens. Who worries about people who die with that much money after paying taxes all their lives?
Under the Bush tax cuts, the death tax was phased out entirely in 2010.
But now, with the tax cuts expiring, the “death tax” is coming back to “life” again in 2011.
This time, it will affect more people — as the basic exemption will be lowered to $1 million — and the top rate will be raised to 55 percent.
Since most people still won’t be affected directly, most will have a “ho-hum” attitude about it.
But the “death tax,” besides being unfair and excessive, will have a negative effect on us all. It will discourage and destroy accumulation of wealth that generally produces jobs and improves the economy.
Will imposing the death tax solve our government’s red-ink problems? No, the revenue from it will just disappear in the $1.4 trillion of annual deficit spending by irresponsible government.
“Soak the rich” long has been a cry of the envious — and “soak the dead rich” may be even more appealing to some. But the tax will just encourage the living to seek ways to avoid taxes legally. It will discourage the accumulation of the capital that is necessary to fuel all sorts of enterprises. It especially will hit small family businesses that hire people and generate payrolls.
Oh, well, few people will worry about imposing a tax on “somebody else” who has already paid taxes in life, and then will have his or her estate taxed again at death.
But it’s wrong in principle. The taxed estates will just be swallowed up in excessive, wasteful and unconstitutional federal government spending, barely being a drop in the bucket of the many trillions of dollars that Congress keeps wasting.