The truth is that no intelligent American makes a major economic decision without considering the tax consequences of today’s economy. Estate taxes are just the most extreme case; the planning costs exceed even the taxes extracted from our estates by the federal and state governments. The cost to those people who are subject to the tax or “may be subject to the tax” is substantial, and has created a whole industry of lawyers, CPAs and insurance agents who work 40 hours a week just to minimize the tax obligations of their (often elderly) clients. People who don’t know whether they are going to be subject to the tax must create wills and trusts that enrich only their lawyers, not their beneficiaries. Even after they die they must continue paying trustees and incur other costs that should really be given to their surviving family members. These “consultants” – not the government – are the real beneficiaries of this system.
The result of this policy is that it rewards people who spend all their income and punishes people who save. Don’t think that it’s just lower-income types who spend all their money. I know plenty of people making high six-figure incomes who spend every dime they earn. I also know people who have had moderate incomes throughout their life, who have scrimped and saved and invested wisely, and will never be able to pass the fruit of their efforts to their children or grandchildren because of the death tax.
Professor Graetz is upfront about his rationale for this tax. He thinks – surprise! – it’s an issue of “fairness.” He doesn’t believe the “rich” pay enough taxes. No matter what flowery language he uses, it all gets down to basics – for him and his ilk, the successful should be punished unless they make generous contributions to a fine university.
The death tax is the most illogical, counterproductive form of taxation we have ever established. If someone works all of his life and saves money to pass on to whomever they wish – whether it be family, friends, co-workers or a charity – that should be their choice. They paid taxes on their earnings and they chose to skip the extra vacation or work a little harder, and we should respect and promote – not punish – that behavior. And we certainly should not force them to pay thousands of dollars to “consultants” just to minimize the death tax.
The new Congress has a chance to kill estate taxes for good. This should be one of their top priorities.
Today's the Day: Scots to Vote For Whether or Not to Secede From the United Kingdom | Christine Rousselle
Lt. Col. Oliver North: Someone Needs to Tell The Truth, Obama's ISIS Strategy is Mission Impossible | Katie Pavlich
Townhall Magazine's October Issue Preview: Obamacare's Illegal Insurance Company Bailout | Conn Carroll