Tag: estate tax

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general freedom national politics & policies tax policy

The Taker’s Gift

The Tax Trick

Say a mugger robs Ed instead of you. Has the mugger given you a present of your stuff by not taking it? Is his non-​taking a “giveaway”?

No. If you possess something you have honestly earned, it is yours by right, not as a special gift from each person who abstains from relieving you of it.

Why is this not just as true when the prospective stuff-​taker is a government?

Whatever case may be made for taxing you to fund a governmental goal, the state is not “giving” you whatever part of your wealth it lets you keep.

Yet this is the claim that partisans of big government repeatedly make. They apparently aim to undermine any hint of willingness to let us keep more of what belongs to us.

We see it again in the context of President Obama’s recent attacks on the plan of some Republicans to do away with estate taxes, the notorious “death taxes.” This tax relief would allegedly be a “giveaway” to those who have worked most successfully to earn something worth leaving to people they care about. It would also allegedly “deprive” non-​recipients of some government handout no longer fundable because of the tax cut.

Being taxed less is always about keeping more of your own money and being able to spend it as you wish, including on heirs.

That’s a feature of tax cuts — not a bug.

This is Common Sense. I’m Paul Jacob.

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tax policy

Re-​Kill the Death Tax

Next year, the federal death tax — otherwise known as the estate tax — will be phased out entirely. It will be gone. But it won’t stay gone.

This phase-​out was part of tax cuts Congress passed in 2001. The death of death taxes should have been permanent. After all, meeting the Grim Reaper is tough enough as it is. As you’re about to expire, do you really want to ponder how 55 percent of what should go to your heirs will be confiscated as soon as your coffin goes into the ground? It’s enough to make you want to skip dying altogether.

Unless Congress acts, come 2012 the death tax will pop back into life, as ravenous as it ever was at a full 55 percent. What will happen as the previous year draws to a close? In a Newsweek column archly entitled “Death, Republican Style,” Jacob Weisberg notes that rich elderly people will have an incentive to die by December 31, 2011. Their kids will have an incentive to “turn off respirators in time for the deadline.” Though morbid and sorta sordid, he has a point.

So what’s the solution? I mean, aside from vilifying the GOP for the political compromise leading to this end game? Weisberg is mute. But if his concern for the elderly is genuine, he could start by urging Congress’s Democratic majority to kill the death tax for good. Then we’d all want to live!

This is Common Sense. I’m Paul Jacob.