The ‘death tax’ punishes success
Like most Americans, we are aware that there are two certainties in life: death and taxes. But what many family-owned businesses and farms don’t realize is that when you die, the federal government swoops in and confiscates another 40% of the money that you and your family spent a lifetime building — and already paid taxes on.
The “death tax” is an immoral tax and an attack on the American dream. Too often, it forces families to sell the farm, ranch or business they’ve spent a generation or more building — just to satisfy the IRS.
These aren’t, as opponents claim, the Paris Hiltons of the world. Those most hurt are the ranchers, farmers or entrepreneurs whose family assets are tied up in buildings, machines and property.
It’s their spouses and children who have to sell the family business to cover the tax bill. It’s not unusual for a family to be forced back to the bank for a third loan to pay the death tax, just to keep the land they’ve worked for generations.
Why is America punishing success?
One reason Rep. Sanford Bishop, D- Ga., is helping lead Democrats against the death tax is because the tax is especially destructive to businesses owned by women and minorities. Harry Alford, president and CEO of the National Black Chamber of Commerce, calls this tax a “black tax” because of its destructive effects.
Since its creation as a temporary tax in 1916 to help fund World War I, the death tax has robbed $1.1 trillion in capital from the U.S. economy. The Tax Foundation estimates that eliminating the death tax will create 139,000 new jobs and increase paychecks by 0.7%. The death tax generates so little in taxes — a mere two days of federal spending each year. Because it encourages tax shelters rather than investment and saving, many say more federal revenue would be generated by killing it than keeping it.
That’s why for decades, polls show 60% to 70% of American voters oppose the death tax.
The death tax is the wrong tax at the wrong time and hurts the wrong people. It’s time to end it once and for all.