I find it difficult to understand how people can believe that the Republican “tax reform” plan actually intends to help common people when one of the chief selling points is elimination of the Estate Tax (“Death Tax”).
The Estate Tax applies only to people who inherit more than $5.49 million. Further, only the amount OVER $5.49 million is taxed at the higher rate. These are the top .2 percent wealthiest Americans.
In most cases, the money they are inheriting has accumulated through appreciation of stocks and other assets from their parents, guardians, or other benefactors. The people inheriting it could theoretically have sat around doing nothing their whole lives, just waiting for their inheritance.
The amount of money that will not be collected by the government when this tax ends is more than the government spends on all of the following together: The F.D.A. (Food and Drug Admin.), the Centers for Disease Control and Prevention and the Environmental Protection Agency. Losing this revenue will cost $269 billion over a decade. (see here)
Who will make up for this lost revenue if it is true that the middle class and the businesses are all going to be paying less in taxes? If everyone is paying less, who is left to make up the difference??
Anyone in power who is using the elimination of the Estate Tax as an example of making life better for regular people can’t be serious, and has to be counting on people’s unquestioning trust. Well, they don’t have mine!
Cynthia Stancioff
Chesterville
You hit the nail on the head! And one of the BIGGEST lies is that (in general) farms and small businesses suffer under the Estate Tax.
Let’s give an accurate representation of what we are talking about here. To be clear, the chances are very small that this will ever apply to my estate, but I believe that the estate tax is completely immoral.
Hypothetically, let’s say I work extremely hard and create a business that becomes very popular and at the time of my death my entire estate is worth $25mm. I decide to leave that estate to my children (who, as you say, have sat around doing nothing). Your argument is that the government has a right to come in and take around $8,000,000 of my hard earned estate (($25mm-$5.5mm exception) x 40% tax).
I get that this only applies to the wealthy, but just because the person is wealthy does not mean that the government has a right to take the money away from their family. As a reminder, I have paid taxes on my income the entire time I have been earning that $25mm as well. The $25mm is what is left over after I paid my income/cap gains tax.
I understand that this will cause a hole in our budget, but it’s a hole that never should have been dug in the first place, and it is immoral for us to expect wealthy people to give up a huge percentage of their estate, after having to have paid a huge percentage of their income, to make up for our poor decisions. We all want to offer a helping hand to those who need it, if we are resorting to tactics like this, we have gone way too far.
Estate tax is just plain Wrong. Regardless of who’s lot in life it benefits. This is money that has been taxed, taxed and again taxed. I will never see a large inheritance but don’t begrudge those who will. It is about time it was eliminated.
KD and 2 cents, I second your motions. A wealth tax is hideously immoral in all cases, but especially so when it causes families to have to disrupt their dreams of carrying on a productive and profitable family business.
Try working hard and accumulating some wealth for your family business then let us know how you feel.
Estate taxes usually only hit the “I’m gonna live forever” types who didn’t bother to plan ahead. It’s nicknamed the last voluntary tax since there’s a ton of loopholes to get around it.
There are extremely few small businesses affected by estate taxes. It’s estimated at 50 small businesses for the entire USA in 2017 with each paying less than 6% in estate taxes. Those 50 businesses aren’t struggling mom & pop places. They’ve got the assets and lawyers to plan for it and move onto making more money.
https://www.cbpp.org/blog/the-myth-that-the-estate-tax-threatens-small-farms
“Myth: The estate tax constitutes “double taxation” because it applies to assets that already have been taxed once as income.
Reality: Large estates consist to a large degree of “unrealized” capital gains that have never been taxed; the estate tax is the only means of taxing this income.
Myth: Eliminating the estate tax would encourage people to save and thereby make more capital available for investment.
Reality: Eliminating the estate tax would not substantially affect private saving, and it would greatly increase government dissaving (i.e., deficits); as a result, it would more likely reduce the capital available for investment than increase it.
Myth: The estate tax unfairly punishes success.
Reality: The estate tax affects only those most able to pay, and the funds it raises help support a range of programs that benefit the nation.”
https://www.cbpp.org/blog/10-myths-about-the-estate-tax
The original justification for the estate tax was twofold. First, to pay for an expensive war (WWI). Second, to prevent wealth from accumulating in a small number of families (aristocracy). We have the same justifications today as we did 100 years ago. We are not taking about small businesses and farms. This tax effects the very wealthy. Promoting the accumulation of obscene wealth is immoral, not taxing it for the benefit of society.
Money that is left in the private sector continues to benefit the private sector… Take 50+ % of a family’s wealth and give it to the government’s big black hole and it’s gone FOREVER.. I’ve worked for wealthy family’s my whole life. If the government stole all their money they couldn’t have paid me for my services…
It’s obscene that parasites feel entitled to other people’s money.. DemocRats can’t make they need to steal from those who can …………
President Theodore Roosevelt was a leader of the Republican party and he was born into a very wealthy family. His work to initiate an income tax was defiantly an impressive vision. It take a bold leader to recognized the need to serve all, not just the few on top. If you cut off the top then the burden will be distributed down to the mid to lower and income Americans. Personally, I’m tired of more than half my taxes going to fund wars and corporate tax incentives. If you think that not getting your country club membership or new yacht from mom and dad is bad then think about the Millions of truly struggling Americans who’s taxes will go up. I think the majority of folks who stand to inherit family wealth are smart and have planned accordingly. Sorry. Not much sympathy here.
People keep forgetting that their money really belongs to the government. They never seem to grasp the fact that their estates, savings, wages, salaries etc are tax expenditures. What we call “take-home pay” should be called an allowance.