The New York Times published an editorial about the estate tax yesterday, garnering the usual rants about "death tax" and double taxation yada yada.
Some facts: 70-90% of the money that estate taxes tax has never been taxed. Not once. And for even the small proportion that has been taxed, estate taxes don't tax the dead. That's pretty tough to do unless you have a pretty exotic theology.
Estate taxes are an income tax on the recipients, who have never before been taxed for this income.
And it only applies to .3% of estates. That's right--one in 370, or three tenths of one percent. And of that tiny group, an even tinier group comprise people trying to pass on their hard-earned wealth. It's money made by Paris Hilton's great-grandfather and George Bush's grandfather. It's money a bunch of coupon-clippers want to pass on to their coupon-clipping progeny. Or to their pet dog. Or to the very attentive young lady from the escort service.
If you want a detailed rundown on this scam, and who's behind it, look here.
3 comments:
28.
ming
Ann Arbor MI
December 28th, 2009
8:09 am
The death tax is double taxation, a tax on funds already taxed, it is immoral marxist wealth redistribution.
It should be deleted
Ming Bucibei
Recommended Recommended by 46 Readers
Calling the estate tax double taxation is an innumerate sophistry.
Money is normally taxed every time it changes hands.
If the government taxes you twice when you've only made or received it once, that's double taxation. Examples:
If the government taxes you when you contribute to Social Security and then taxes you when it gives you the money back, you've been taxed twice on your income.
If the government taxes you when you earn the money to buy a house and then taxes you on the nominal appreciation due to inflation, that is arguably double taxation. More precisely, the government is taxing you on inflation when you earned no additional real income.
If the government taxes a corporation when it makes a profit and then taxes the same profit when it is distributed to its shareholders, that is double taxation.
But the inheritance tax is not double taxation.
If a rich man pays his attorney to draft a will, the attorney must pay taxes for the money he earned from doing the work.
So why should we say that the heir who benefits from the will, but did no work for the income, is double taxed? They pay income only once. Presumable everyone who pays or gives you money has paid taxes on it.
If you earn money and pay taxes on it and then pay a gardner to mow your lawn and the gardner pays taxes, the gardner is NOT being double taxed. Neither is the heir!
Kevin Rica's comment is spot on--and powerfully succinct. Congratulations.
And it shows how this isn't an authentic Republican issue--it's an extremely wealthy (think Wal-Mart) family issue that has been foisted on Republican rank and file, none of whom benefit from it, either materially or philosophically.
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