From the NY Times comes this tale of a recently-deceased billionaire, Dan L. Duncan, whose estate will be the first ever billion-dollar estate in the U.S. to pass to his heirs 100% tax-free.
This situation is the bastard child of the Bush-era tax “reform” in which the estate tax was characterized as a “death tax” and repealed. The repeal was rolled back, but it won’t take effect until next year, which means that estates of anyone who kicks off in 2010 will go to the heirs tax-free.
Well played, rich kids!
This is the kind of issue that drives Democrats crazy. Conservatives put forth these policies which are obviously intended to help big businesses and people in top income brackets, label it “freedom” or whatever, and then Democratic leaders don’t have the stones to counter it rhetorically.
There’s certainly nothing unfair about a tax on dead multi-millionaires, which is what the “death tax” actually is. The estate tax has been part of U.S. tax policy for a hundred years, it only affects a tiny percentage of estates, and it has a clear social objective — to help prevent dynastic concentrations of wealth.
The main argument of conservatives against the estate tax is that it’s “double taxation” (taxing someone on money that’s already been subject to an income tax) and that double taxation is somehow wrong. But this argument, like many principles of “fiscal conservatism,” is based on a deceit. You’re already subjected to “double taxation” on every dollar you earn and every dollar you spend (money that’s subject to income tax is also subject to sales tax, excise taxes, cell phone luxury taxes, etc.). So why is the tax on someone who’s already dead a particular problem? The answer undoubtedly lies in the fact that the estate tax only affects multi-millionaires, and in the conservative cosmology, those are the ones who need to be protected most.