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Inheritance Taxes - Essay Example

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Inheritance Taxes

“Death tax” label came about during the debate in the first years of George W. Bush’s presidency when those who saw the inheritance tax as a tax on wealth—their wealth—wanted it repealed. Using terms such as “death tax,” and framing the inheritance tax as a “double tax,” the small minority, approximately 2% of Americans, won the repeal. It did not hurt having a president set not only to inherit but who also has heirs to a sizeable fortune, and who wanted to please his “base,” deep-pocketed conservatives. In all actuality, the inheritance tax is a wealth tax: it taxes estates willed to heirs that net worth exceeds $5 million, so only the wealthy are affected by it. Even David Joulfaian of the U.S. Department of the Treasury admits that it is a wealth tax. “The estate and gift tax is the only wealth tax levied by the federal government. The estate tax was first enacted in 1916 and applied to the wealth of decedents with estates in excess of $50,000. It has undergone numerous changes, especially in 1976, 1981, and 1997. Significant temporary changes were introduced in 2001 and are set to expire in 2011”. Yet even many poor people oppose it because they believe it will somehow affect them, and that has to do with the way those who the tax will affect marketed the idea to the masses.
Conservatives succeeded in their efforts to have the estate tax temporarily repealed mainly because of the way they presented their argument. They framed the argument against the estate tax as though it would affect everybody who would inherit any sum of money or property upon a relative’s death including the heirs of small business owners and farmers. These people fear that, should they die, their business or farmland would be worth more than the $5 million dollars where the estate tax kicks in, and then their heirs would not be able to keep the business or land, which would affect the future income of the heirs. Small business owners and farmers, who subscribe to the conservative view, fear that if they die suddenly their families would be left in poverty because the government would tax them out of their source of income. But, conservatives not only emphasize the fact that heirs would not inherit the full worth of a business or farm they include the presumption that small business owners are so concerned over the estate tax that it affects their hiring practices. The website, Nodeathtax.org, says, “The United States economy has endured a severe recession and is currently growing too slowly. Accordingly, it is imperative that policy be focused on generating the maximum possible pace of economic growth. The estate tax is an important element of pro-growth tax policy. Recent research indicates that the estate tax has significant impacts on asset accumulation (and, thus, balance sheet repair), as well as the payroll and ...Show more

Summary

In this paper, the arguments for and against inheritance taxes will be discussed. This specific tax is not assessed on money or assets that a person earns but on money that s/he inherits—the inheritance tax. The inheritance tax also goes by the name “estate tax” or the more dastardly sounding “death tax"…
Author : janicemills
Inheritance Taxes essay example
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