from the bigdumbHoosier Archive - 06.20.2002
the Life tax break
The Gift and Estate Tax is imposed on transfers not for compensation. Mainly, it's a tax imposed on transfers due to the death of the transferor. In common parlance, that means money and assets that are inherited rather than earned. In recent years, the bulk of these taxes have been paid out of estates from people who died with a net worth exceeding about $700,000. Realistically, most estate tax revenue that the government brings in comes from estates larger than $1m.
In my law practice, I sometimes handle the payment of estate taxes. Not all that often, unfortunately most people where I live aren't lucky enough to die with an estate in excess of $1m. In my opinion, payment of the taxes in these larger estates isn't usually any great catastrophe for the heirs or legatees. They didn't work for the money, after all. It's a windfall.
The government needs money to build highways, fight 'evil-doers', keep folks from starving on the streets, treat sewage, subsidize peanut farmers, etc. This money comes from taxes.
Let's say you're lucky enough to have $1m. America has been good to you, right? So when would you rather pay something back to good 'ole Uncle Sam? Want to pay now, or would you rather wait until you're dead? I'd prefer to wait, please.
Rich folks - really rich folks - who oppose this tax because it undermines the class system have figured out how to manipulate the general public into being against it too. They call it a death tax. That makes it seem so cruel, so unfair. Death seems pretty cruel I'll admit, if the government takes some of your money when you're dead, it won't hurt you a bit.
What the Estate Tax needs is some spin-doctoring. Here's my suggestion: let's quit calling it a 'death tax' and start calling it a 'life tax break'. It's a 'life tax break' because the revenue that the estate tax raises is money we don't have to pony up while we're alive. Money we can enjoy, spend as we wish, even waste if we choose to. After all, your estate doesn't pay tax on money you spent while you were alive. Feel better about it now?
