They say two things are certain in life, death and taxes.. and then there’s death taxes.
Death tax – estate tax- exists in the US, and has been referred to as “the dumb tax“.
This tax makes a person who has inherited a property/house, pay tax over the value of the inherited estate in order to keep it.
The estate tax was first instituted in Great Britain in 1889 as part of a broad death tax program. It was first imposed in the United States in 1898 to help finance the Spanish-American War, was repealed in 1902, and was reimposed in 1916 to help finance mobilization for World War I.
A couple interesting views from the people who called it dumb:
– Death tax reached 0% in 2010, it is now 35% and is expected to be 55% by 2013 (bad year to die)Can you imagine your kinds paying half the price of your house to keep it?
– The death tax is unfair because it is a “double tax” because tax was laready payed on the estate.
– Only about 2% of income inequality can be attributed to inherited wealth. (“Inherited wealth” the bad guy)
– Death tax destroys family businesses and farms that seldom have enough liquid assets to pay the estate tax bill, forcing a liquidation of the business or sale of the family farm
– It Encourages consumption and discourages investment.
“The estate tax should be repealed or reduced because it adds to the already heavy U.S. tax burden on saving and investment and, by raising the costs of capital, impedes investment. In particular, the estate tax makes it harder for family businesses, including farms, to survive the deaths of their founders.” ACCF