Monday, December 6, 2010

I do not understand the estate tax, Sam-I-am

Libertarian-ish types often get wound up about taxes. I'm not really one of those people. Sure, I like my taxes low, but I also get that there are many essential services to pay for. Unlike my liberal friends, I would consider replacing the income tax with a value-added/sales tax on consumption. Unlike conservatives, tax policy isn't the first thing I generally rail about. I never thought the Bush tax cuts in the middle of a war were a good idea, but, now that we are clearly still in an economic downturn, I can't see repealing 'em either. But, by and large, I am somewhere in the middle on taxes.

With one exception....

I simply do not understand the principle behind the estate tax, and, so, I don't think there should be one. Ever. Liberals get bent out of shape when you call it a "death tax," but that's exactly what it is. See, the estate tax is not an "inheritance tax." It doesn't tax the people who get the money passed on to them. Rather, it taxes the dead guy's (or gal's) money before the estate is ever split up. Literally the act of dying causes the feds to swoop in and say, "Before you start distributing that, give the government its share."


I understand income taxes. You earned some money; pay your share. But how does dying constitute a taxable event? No money was earned by the dead guy (the estate) for dying. And the money was already taxed when it was earned. And, yes, I know that only estates over a certain size pay the tax (actually in 2010, no one paid, and that's how it ought to stay, but word is that the compromise currently being struck will have the feds taking 35% of every estate over $5 million), but unless your goal is federally mandated wealth redistribution (I think we can all guess how I feel about government having that sort of power), the estate tax is an abomination -- some sort of atavism to the days when the king came riding through to take his little (or not so little) bit of everything.

It's theft, plain and simple.

So, don't get sucked in by the (Sen, I-VT) Bernie Sanders-ish types of the world who include the reinstatement of the estate tax in their laundry list of Things That Have To Happen To Achieve True Justice. That's crap, complete crap. A government that can take anyone's money for the simple act of dying is a government that has way too much power.

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