Now, for something completely different
Ahh.. the estate tax. I knew that at some point I would have to visit this issue. And, please, let us dispense with calling it the death tax. Whatever one's opinions on the rightness of the estate tax, using loaded terms like the death tax do nothing to further the debate or help us reach truth or good public policy. Such spin is merely a short cut to actually thinking!
Let is start with the FACTS about the federal estate tax. In its current incarnation, roughly two percent of individuals who die this year will have their estate's taxed at all. The first $675,000 of estate valuation is not taxed at all. And that amount is scheduled to increase to $1,000,000 in 2006. Another FACT is that the tax rate varies from 37% to 55%. The higher number applies to estates valued at over $3,000,000. Another FACT is that much of this income has NOT already been taxed as it has been sheltered from generation to generation and has never been subjected to income or capital gains taxes.
Beyond the actual facts, though, is the philosophy about estate taxation. Let us not forget that it was the rabid Communist Theodore Roosevelt who gave us the estate tax, supported by economic theory from the noted Socialist Adam Smith. (tongue firmly in cheek) The US is based on a belief in individual thrift and enterprise and that those attributes will drive its economy. Those who inherit a large estate have no economic incentive to work or be economically productive. As Andrew Carnegie said, "The parent who leaves a son enormous wealth generally deadens the talents and energies of the son and tempts him to lead a less useful and less worthy life than he otherwise would."
But I would make a further point and that maybe ties in with my more libertarian roots. I think that we should have a slightly higher exemption on the estate tax to reflect the current value of money. I do not know what the magic number is, and there has been a lot of talk about $3,000,000, which does not sound unreasonable to my ears. But, for estates greater than that amount, I would suggest the tax rate be nearer 75% than the current 55%. And that is to give an overwhelming incentive for charitable giving. In my mind, society would be better served if the money collected by the US Treasury in estate taxes went to the non-profit sector instead. I simply trust charities and foundations to address social problems more than I do the federal government.
Ahh.. the estate tax. I knew that at some point I would have to visit this issue. And, please, let us dispense with calling it the death tax. Whatever one's opinions on the rightness of the estate tax, using loaded terms like the death tax do nothing to further the debate or help us reach truth or good public policy. Such spin is merely a short cut to actually thinking!
Let is start with the FACTS about the federal estate tax. In its current incarnation, roughly two percent of individuals who die this year will have their estate's taxed at all. The first $675,000 of estate valuation is not taxed at all. And that amount is scheduled to increase to $1,000,000 in 2006. Another FACT is that the tax rate varies from 37% to 55%. The higher number applies to estates valued at over $3,000,000. Another FACT is that much of this income has NOT already been taxed as it has been sheltered from generation to generation and has never been subjected to income or capital gains taxes.
Beyond the actual facts, though, is the philosophy about estate taxation. Let us not forget that it was the rabid Communist Theodore Roosevelt who gave us the estate tax, supported by economic theory from the noted Socialist Adam Smith. (tongue firmly in cheek) The US is based on a belief in individual thrift and enterprise and that those attributes will drive its economy. Those who inherit a large estate have no economic incentive to work or be economically productive. As Andrew Carnegie said, "The parent who leaves a son enormous wealth generally deadens the talents and energies of the son and tempts him to lead a less useful and less worthy life than he otherwise would."
But I would make a further point and that maybe ties in with my more libertarian roots. I think that we should have a slightly higher exemption on the estate tax to reflect the current value of money. I do not know what the magic number is, and there has been a lot of talk about $3,000,000, which does not sound unreasonable to my ears. But, for estates greater than that amount, I would suggest the tax rate be nearer 75% than the current 55%. And that is to give an overwhelming incentive for charitable giving. In my mind, society would be better served if the money collected by the US Treasury in estate taxes went to the non-profit sector instead. I simply trust charities and foundations to address social problems more than I do the federal government.
posted by Anonymous at 1:00 PM
0 Comments:
Post a Comment
<< Home