You can count on only two things in life – death and taxes. Actually, more like two and a half things, because there is also taxes upon death. The estate tax raises revenue by taxing the wealth people leave behind when they die.
That’s a good thing. If we could, I would suggest only taxing dead people. Dead people can’t complain about all the taxes they have to pay. The people who complain about the estate tax are the people who inherit less because of it.
The Tax Foundation has a recent blog post in which they again try to attack the estate tax. They link to a “provocative new study,” in their words, that
“undermines a central argument made by proponents of the estate tax: that it helps reduce the concentration of wealth in the economy.”
Seems to me that if estate taxation fails to reduce the concentration of wealth, that would be a reason for opponents of the tax to pipe down, not up.
The study: “It is commonly assumed that inheritances are a major source of wealth inequality and that the offspring of wealthy families tend to be as rich as their parents due to bequests.” Dude, I don’t need to assume that – I see it every day. That’s not an assumption, it’s a plainly undeniable fact.
“For most estates larger than $5 million, the effective tax burden is only 13.5 percent to 17 percent of estates; in fact, the burden tends to fall primarily on smaller estates.”
Well, heck, if the small-fries are getting hit the hardest, why are the big guys so up in arms? If the rate is so darn low, what’s the problem?
As far as I’m concerned, as long as we’re still primarily raising revenue by taxing income, capital and property value (all very flawed methods), we might as well keep taxing dead people.