During our daily lives we pay a variety of taxes. There is income tax, property tax, sales tax, gas tax and the list goes on and on. The final insult is the estate tax, also known as the “death tax.” This tax has been phasing out since 2001, but the Obama administration reenacted this program as of January 2011. It is complicated, confusing and serves no purpose.
The “death tax” requires heirs to pay the federal government up to 40 percent of transferable assets. One should not have to visit the undertaker and the tax collector at the same time. Proponents argue that repealing the tax would increase the deficit. But a system where heirs pay capital gains on the assets they acquire from an estate is already in place: the inheritance tax. Why get taxed twice on the same assets? This makes no sense.
When Congress passed the “death tax” in 1916, it was originally intended to serve two purposes: raise revenue for the federal government and World War 1 and prevent the build-up of wealth in a concentrated number of families. The tax serves neither of these purposes today. Research has shown that it slows economic growth, stifles private investments and suppresses wages because it is a tax on capital and entrepreneurship.
It is time to kill this tax once and for all. We all get taxed while living. We should not get taxed when dying.