The Death Tax is Back from the Dead
Posted by Brian Garst on June 28, 2010
In 2011 the “death tax” will make a roaring comeback after a year-long hiatus. Democrats never got around to plugging the “gap,” or zero percent rate, for all of 2010 as they promised they would when they took control of Congress and the White House. This has resulted in a rare year of tax fairness for estates that had grown used to the prospect of facing oppressive double taxation, as already taxed assets are raided by the government from grieving families.
That 2011 will see the death tax again reach a rate of 55% isn’t enough for some in Congress, such as Bernie Sanders, one of the few members honest enough to admit being a socialist. Along with Tom Harkin and Sheldon Whitehouse, he has introduced the Responsible Estate Tax Act. Curtis Dubay of the Heritage Foundation reports:
If Congress does nothing and the death tax does rise from the dead next year it will come back with a punitive rate of 55 percent and exemption of $1 million ($2 million for couples), enough by itself seriously to slow the recovery. This draconian tax rate and less-than-generous exemption level is not enough for Senators Sanders, Harkin and Whitehouse, however.
Their proposal would set the top rate at 65 percent for the largest estates. For smaller estates the rates would range from 45 percent to 55 percent. The first $3.5 million ($7 million for couples) would be exempt for the death tax.
If the Senators’ plan became law, Americans that work hard, live a virtuous life, create jobs for other Americans and build wealth for their families would see a large majority of what they have built confiscated by a profligate government to be redistributed as seen fit by Washington. A death tax at such levels would certainly become the nightmare of the American dream.
While the death tax does not hit a large percentage of Americans, those it targets are disproportionately responsible for the creation of jobs. Some wealthy figures, like Bill Gates and Warren Buffet, are routinely trotted out as examples of rich individuals who approve of the tax. This, we are told, means it isn’t really unfair.
If Bill Gates and Warren Buffet want their money handed to the government when they die, that’s fine. They have the right to direct their estates however they please, and nothing is stopping them from simply cutting a fat check to the federal government right now. Nothing about being wealthy, however, gives them the right to submit the money of others to the government on their behalf, especially when it is money that has already been taxed. The death tax is an example of unfair double taxation, and it should stay dead in 2011 and beyond.
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