There is great hysteria created by the Republican Party over the so called “Death” (Estate Tax), making it seem as if it is an onerous tax on the American people and punishes success, with such statement further from the truth than the average American could imagine.
What is this so called “Death” (Estate Tax)?
It is a tax on the transfer of assets of a deceased person’s estate.
The Estate Tax has been part of American and world history for nearly a millennium, and is not an attack on those who work hard and achieve success.
Realize that the Estate Tax does not apply to 99.86 percent of all individuals in America. A single person is entitled to a $5.43 million exemption, along with the value of homes, cars, memorabilia, jewelry and any other type of asset. And if the person is married, such couples are protected for $10.86 million.
The purpose of the Estate Tax is to prevent extremely wealthy people from transferring all of their wealth to their heirs, thereby keeping all of the wealth held by only a small percentage of the population.
Even after the $5.43 million for a single person or the $10.86 million for a couple, only 40 percent of the remaining wealth is applicable to being taken by government, with 60 percent passing to a person’s heirs tax free.
So for instance, if a single person dies and leaves a $25 million estate, after the first $5 million or so exemption, only $8 million of the remaining $20 million is taken by government, leaving about $17 million out of the original $25 million, two thirds of the original total. If a couple, and about $11 million is protected, about $5.5 million of the remaining $14 million is taken away by government, leaving about $19.5 million of the original $25 million, or about close to 80 percent, instead of about 67 percent.
No one should inherit so much that there is no ability to deal with government programs that benefit everyone, and remember many wealthy people get benefits from government too. So it is a small price to pay for the descendants, to lose 20-33 percent of the total wealth inherited, with those heirs being extremely fortunate to be part of a class of people that is only .14 percent, and already have greater opportunities in life, with a responsibility to society at large!