One of this tax cuts that Bush made was the elimination of the estate tax that will be effective in 2010. However, in 2011 the estate tax (or death tax) will then revert to rates that were in place in 2001 that are as high as 50%. The Op-Ed in today's NY Times makes the case that we need the estate tax. This person is wrong.
NY Times Op-Ed
NY Times Op-Ed
The estate tax is one that those taxes that seems so good on the surface. It takes money from people that are dead. Afterall, they do not need the money any longer. But what happens is family businesses (where most of the wealth resides) get sold off and years of hard work are divided up. These businesses can then not be passed on to family. Instead the government takes the money and redistributes this wealth to society.
When these businesses get sold off, so the family can pay 50% in taxes, there is a good chance people will lose jobs. The capital the government takes out of the business in the form of taxes is then employed in programs, not the value creation activities of business.
The estate tax is just another example of how something that sounds so good to politicians, has very negative consequences. The estate tax is bad for society and the poor are impacted even though many may receive some benefit from programs (usually welfare since they are no longer employed). Congress needs to stop the rhetoric about the estate tax and just kill it. This is not about stopping aristocratic dynasties like the Du Ponts or the Rockefellers. Killing the death tax is about making America economically stronger.
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