On the "Death Tax"
The actual name is "Estate Tax", but that is of little importance.
The official source on whether or not this tax is helpful.
The very short: the tax is imposed only on the estates of rich people when they die. Congress decided to change it a few years back, and now Congress wants to change (or repeal) it again.
The slightly longer: the tax is imposed on estates at the time of the holder's death. If the estate is worth less than $1.5 million, then it is free of tax. If it is worth more, a tax is imposed on its value over $1.5 million. The $1.5 million deductible will increase annually until 2009, at which point it will be at $3.5 million. In the year 2010, the deductible will be change to 'infinite', which means that there will be no estate tax. In 2011, the deductible will drop to $1 million – its value before Congress decided to contort it.
The right wing has realized that this is a good time to get rid of the tax, and the left has realized this is a good time to complain about the rich getting richer while government sinks deeper into debt. This tax is a bit complicated, is a media topic, and has an emotional nickname. So, naturally, the facts are ignored in favor of slogans and irrationality.
The intentions of the tax are good: to limit the inheritance of the obscenely wealthy in order to enrich the government, ensure that a few families cannot collect ungodly wealth over several generations, and thin out the population of bratty rich kids who feel entitled and try to ruin life for the rest of us.
Unfortunately, the tax does not work. It collects more than 20 billion per year, but most of that would be paid in the form of income tax anyway. Additionally, the tax discourages long-term investment in favor of unnecessary consumption because the estate is valued based on market price (investments increase value over time, consumables decrease value over time). Also, the cost of implementing the tax drains most of the money it collects.
So, this tax should be repelled. Its intentions were good, but it is incapable of fulfilling those intentions.
(this blog was brought out of retirement for this post, and I honestly do not know if I will return to regular posting or permanently end this blog. I believe I have found a new reason to care about politics, but I do not know if that reason is enough to justify the time required).
The official source on whether or not this tax is helpful.
The very short: the tax is imposed only on the estates of rich people when they die. Congress decided to change it a few years back, and now Congress wants to change (or repeal) it again.
The slightly longer: the tax is imposed on estates at the time of the holder's death. If the estate is worth less than $1.5 million, then it is free of tax. If it is worth more, a tax is imposed on its value over $1.5 million. The $1.5 million deductible will increase annually until 2009, at which point it will be at $3.5 million. In the year 2010, the deductible will be change to 'infinite', which means that there will be no estate tax. In 2011, the deductible will drop to $1 million – its value before Congress decided to contort it.
The right wing has realized that this is a good time to get rid of the tax, and the left has realized this is a good time to complain about the rich getting richer while government sinks deeper into debt. This tax is a bit complicated, is a media topic, and has an emotional nickname. So, naturally, the facts are ignored in favor of slogans and irrationality.
The intentions of the tax are good: to limit the inheritance of the obscenely wealthy in order to enrich the government, ensure that a few families cannot collect ungodly wealth over several generations, and thin out the population of bratty rich kids who feel entitled and try to ruin life for the rest of us.
Unfortunately, the tax does not work. It collects more than 20 billion per year, but most of that would be paid in the form of income tax anyway. Additionally, the tax discourages long-term investment in favor of unnecessary consumption because the estate is valued based on market price (investments increase value over time, consumables decrease value over time). Also, the cost of implementing the tax drains most of the money it collects.
So, this tax should be repelled. Its intentions were good, but it is incapable of fulfilling those intentions.
(this blog was brought out of retirement for this post, and I honestly do not know if I will return to regular posting or permanently end this blog. I believe I have found a new reason to care about politics, but I do not know if that reason is enough to justify the time required).
posted by Chris Edwards at
8:40 PM
|
0 comments
links to this post
