ELIMINATE DEATH TAX NOW

Every Saturday morning on Albuquerque's KKOB, Stuart Stein, an estate planning and probate attorney, has an hour-long program on that subject. The show is very interesting and the host is pleasant and has a good sense of humor. Today he referred to the estate tax and the uncertainty of how long the exemptions will continue (apparently Congress is doing this by the decade and watching the results). That reminded me of the death tax (which is out of our reach, for sure).

The headline here assumes the question, but let us state the proposal this way: "ELIMINATE THE ESTATE TAX NOW." We contend that the estate tax is not fair, if the deceased has paid taxes on the money and property she wants to leave to some survivor (church people, nephews, family members). Has the capital gains tax been paid on the property; and if not, then it can be paid at death without an estate tax. Has the income tax been paid on the money in the bank; and if not, then it can be paid at death without an estate tax. Beyond that, why tax the wealth again, that is, make death a taxable event?

The eighty year old multimillionaire who earns $10 million a year should be encouraged to continue earning (producing), if that is what she wants to do with her life. The more production, the more goods for the world to share; and if the production is of useful things that make life better, so much the better. The fifty year old multimillionaire who earns millions a year should be encouraged to continue producing. Why should she be discouraged by the thought that she can work all her life and build up wealth, but then she cannot leave it to people or animals of her choice? Why should she be forced to pay for planning (no disrespect meant to any attorney) to avoid this tax which will be imposed upon her death? This tax is counterproductive, as well as unfair.

Many today say we should eliminate the death tax, but they do not go further and say that the tax should be eliminated only on that part of the estate which has already been taxed. This distinction is important. Many of those who oppose the elimination of the tax point out that the deceased's estate has been sheltered from income taxes. Advocates of elimination of the death tax should insist that they are for the elimination of the tax on only that portion of the estate which has already been taxed.

We are not talking here about taxes on real and personal property based on value. If the rich woman leaves a large ranch and mansion to her nephews or widower, it will continue to be subject to ad valorem taxes.

There is nothing new or novel in this post; it is elementary. However, as President Nixon said, "Let us stop shouting so that we can hear each other." Let us drop the labels and discuss the issues.